Natural Resources Fund Act No. 12 of 2019

THE OFFICIAL GAZETTE 23RD JANUARY, 2019 LEGAL SUPPLEMENT — A G YA A ACT NO. 12 OF 2019 NAT lU.L RESO RCE F ND ACT 2019 ARRA GEME T OF SECTIO S SECTION PART! PR ELIMI ARY I. hort title and cornmenccment. 2. Interpretat ion. PART II NATURAL RESOU RCE FUND 3. Establ ishment of atura l Resource Fu nd . 4. Transparency. 1 I assent. David Granger, President. ~l'fD/·Z!5 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 68 PART Ill PUBLIC OVERS IGHT OF THE FUND 5. Public Accountab ili ty and Oversight Committee. 6. Functions of Public Accountabi lity and Oversight Committee. 7. Membership of Public Accountab il ity and Oversight Committee. 8. Remuneration of members of Public Accou ntability and Oversight Comm ittee. 9. Budget of Public Accountab ility and Oversight Committee. I 0. Repo rting of Pub lic Accou ntabi lity and Oversigh t Commi ttee. PART IV MA1 AGEMENTOFTHEFUND 11 . Mi nister responsible for overall management of Fund. 12. Bank responsib le for operationa l management of Fund. 13. In vestment Com mittee. 14. Funct ions of Investment Com mi ttee. 15 . Senior Investment Adv iser and Analyst. 16. Funct io ns of Senior In vestment Adviser and Analyst. 17. Investment Advisory Services Company. 18. Private managers . 19. C ustodians. 20. Macroeconomic Committee. PARTY DEPOSITS A D WITHDRAWALS 21. Deposi ts in to Fund. 22. Withdrawal s from Fund. 23. Direct charges on Fund. PART VI DETERM INATION OF WITHDRAWAL AMOUNTS 24 . Economically and Fiscally Sustainable Am ount. 25 . Economically Sustainable Amoun t. 26. fiscally Sustai nab le Amount. 27. Emergency Financing. PART VII PARLIAMENTARY APPROVAL FOR WITHDRAWALS 28 . Approval o f w ithdrawals from Fund. 29. Contents of annual budget proposal. 30. Contents of supp lementary Appropriation Bill fo r emergency financ ing. 2 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 69 PART VIII ELIGIBLE INV ESTM ENTS 3 1. Eligible asset classes. 32 . Minimum investment in very safe investments . 33 . Investment fo r long-term savings. 34 . Fund to rema in unencumbered . 35. Pass ive investment management. 36. Investment Mandate . PA RT IX ACCO UNTING, REPORTING AND AUDITING 37. Accounting. 38. Reports and Financial Statements. 39. Internal audit. 40. External audit. 4 1. Annua l report. 42 . Pub I ication of reports. PART X CONFID ENTIALITY 43. Con fidenti a I ity. PART XI PENAL TI ES AND OFFE CES 44 . Vli sleading information . 45 . Fai lure to pub lish information. 46 . Hindering exercise of powers o f exte rna l auditor. 47. Di sc los ing confidentia l informatio n. 48. Liability of lega l entities. 49. Scope of this Part . PART XII MISC EL LAN EO US 50 . Codes of conduc t. 5 I. Secretariats to Committees. 52. Delegation of funct ions. 53. Regu lations . 54 . Act preva ils where incons istencies with it exist. 55. Consequentia l Amendment. FIRST SCHEDULE SECOND SCHEDULE 3 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 70 AN ACT to establish the at ural Resource Fund to manage the natural resource wealth of Guyana for the present and future benefit of the people and for the s ustaina ble development of the country, and for connected matters . J\ .D. 20 19 Short title and commencement. Interpretation. Cap. 73:02 Cap. 1:0 1 Cap. 85:02 First Schedule Enacted by the Par! iament o f Guyana: PART l PRELIMINARY I . This Act may be cited as the Natural Resource Fund Act 20 19 and shall come into operati on on a date the Minister may by order appoint. 2. In this Ac t " annual budget" has th e same meaning as assigned to it 111 the Fiscal Management and Accountability Act: "annual budget proposa l" has the same meaning as assigned to it in the Fiscal Man ageme nt and Accountability Act; "asset c lass" means a group o f in vestments that have s imil ar characteristics and behave s imilar ly in the market place; " Auditor General" means the Auditor General appointed pursuant to article 223( I) of the Constituti on ; ·'Barclays Global Treasury Index" refers to the Bloomberg Ba rc lays Global Treasu ry Index th at tracks fixed-rate local curre ncy government debt of investment grade countries, including both deve loped a nd emerging markets; ' ' Ba rc lays Global Aggregate Corporate Index" refers to the Bloomberg Barclays Gl oba l Aggregate Corporate Index that tracks g lobal investment grade, fi xed-rate co rporate debt from both deve loped and e merging markets within the industrial. uti I ity and fin ancial sectors: " Bank' ' means the Bank of Guyana established under sect ion J of the Bank of Guyana Act: " Benchma rk Petroleum Revenues" mea ns the Benchmark Petro leum Reven ues specified in the First Schedule; " Benchma rk Price fo r C rude Oi l'' means the Benchmark Price for Crude Oil specified in the First Schedule ; 4 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 71 "corporate bonds" means debt issued by a corporation which is repaid over one or more yea rs; '·custodian" means a tinancia l institutio n that ho lds customers investmen ts for safekeeping. appointed under sec ti on 19; "custodian agreement" means the custodian agreement prov ided for under section 19(3); ' 'Economically and Fiscally Sustai nable Amount" mea ns the amount speci fied in section 24; " Economically Sustainable Amo unt" means the amount spec ified in section 25 ; "eligible asset class" means an (i) eligible bank deposi t; (ii) e ligible commodity; (iii) eligible corporate bond; (iv) eligible equity; (v) e li gib le derivative; (vi) e ligibl e treasury bill ; and (vii) eligible sovereign bond, as defined in section 31 . " emergency financing" means the amount needed for ameliorating maj or natural di sasters as spec ified in sect ion 27; "equity" means a stock or any other security representin g a n ownership of inte rest in a company; "external auditor ' s report" means the report o f the external auditor for the Fund required under section 40; " fiscal year" has the same meaning as assigned to it in the Fiscal Management and Accountability Act ; "Fisca ll y Sustainable Amount" means the amount specified in section 26; "Fi tch" refers to Fitch Rating Inc, a credit rating agency; " Fund" mean s the Natural Resource Fund established under sec ti on 3; 5 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 72 Cap. 97:03 " inclusive gree n economy'· means an economy that improves human ,.ve ll-be ing and builds social equity while reducing environmenta l risks and scarcities; " Institute of C hartered Accountants o f Guyana'' has the same meaning as assigned to it in the Insti tute of Chartered Accountants of Guyana Act; " Internationa l Financial Re porting Standards" means the international financia l reporting standards set by the IFRS Foundation and the Inte rnatio nal Accounting Standards Board: " major natural d isaster'· includes an earthquake. flood or hurricane or other disaster caused by the natural processes o f the earth that has such a severe impact on the environment and the I iving conditions of the population or part of the population that. in the opinion of the Minister, additional public spend ing in excess of the amount that can be financed by the Economically and Fiscally Sustainable Amount and non-petroleum revenues is requi red to ameliorate the impac t on the population and the environmen t; " Minister" means the Minister respo ns ible for finance: "MSC I World ESG Leaders Index" means the MSCI World ESG Leaders Index pub I ished by Mo rgan Stanley Capital International World Index; " MSCI World Ex Fossi l Fuels Index .. means the MSCI World Ex Fossi l Fuels Index published by Morgan Stanley Capital International World Index; "MSC! World Index" means the MSCI World Index publ ished by Morgan Stan ley Capital International Wor ld Index : " Moody ' s" refers to Moody's Investor Service, a credit rating agency; ·' non-petroleum revenues" means all Government re ven ues excluding petroleum revenues and the total return o f the Fund: '"petroleum licence' · means a pet ro leum prospecting li cence or a petroleum production licence issued under the Petroleum (Exploration and Production) Act: " petroleum revenues" means a ll Government reven ues specified in section 21 ; " private manager' ' means an asset management company or other financial institution, that manages assets on behalf of in vestors 6 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 73 Cap. 65:04 Establishment of N atura l Rcsou rcc Fund. appo inted unde r sect ion 18 ; ' ·production operat io ns" has the same meani ng ass igned to it in the Petro leum ( Exploration and Produc ti on} Act; " Publi c Accounts Committee" means the Pub lic Accounts Committee establi shed by O rder 82 o f the Sta nding O rders of the Nationa l Assembly ; "Santiago Princ ipl es' ' means the gene rall y accepted princ ip les and practices fo r Sovere ign Wea lth Funds vo luntarily e ndorsed by the Internati ona l Forum of Sovere ign Wea lth Funds members; "sove re ign bonds'' means de bt issued by a sovere ign o r sup ra nationa l o rgani sation whi c h is repa id over one or more yea rs; " Spec ia l Dra wing Ri ghts" means the inte rnational rese rve asset c reated by the Internat io nal Mone tary Fund; " Sta nda rd a nd Poor's" means Standard a nd Poor's (S& P) investme nt ratings services; "strategic asset a llocat ion" means the esta bli shme nt of target a ll ocat ions o f the Fund between d ifferent e lig ible asset classes w ith period ic reba la nci ng of the po rtfol io to bring it back in line w ith the targe t a llocat ions due to deviations in the total returns of di ffe rent e lig ible asset classes; " tac ti ca l asset a llocation" means acti vely mak ing changes in the a llocation o f the Fund between a nd w ithin d iffe rent e ligi b le asset c lasses to take advantage of pe rce ived tempora ry ma rket a nomal ies in the prici ng of e ligi ble asset c lasses; " tota l return" means the return of a n in vestment o r a poo l of investments over a g iven e va luation period, inc lud ing inte rest. capita l ga ins, div ide nd s a nd d istr ibuti ons rea li sed over a g iven period of time net of a ll fees; and " treas ury bill s'' means de bt issued by a sovere ign or supranati ona l o rgani sa tion whic h is repaid w ithin o ne year or less . PART II NATURAL RESOURCE FUND 3. ( I) There 1s establ ished a fun d to be known as the Natural Resource Fund . (2) T he pu rpose of the Fund is to ma nage the natu ra l resource wea lth o f G uyana fo r the prese nt and future bene fi t of the people in an effecti ve and effic ie nt manner by 7 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 74 Transparency. Public /\ccoun rnbi I ity mid O\·crsight Committee. function~ or Public Accountabi l ity and Oversight Committee. (a) ensuri ng that vo latility in natural resource revenues do not lead to volatile publi c spending; (b) ensur ing that natural resou rce revenues do not lead to a loss o r economic competitiveness; (c) fair ly transferring natural resource wealth across generations to ensure that future generations benefit from natural resource weal th ; and (d) using natural resource wea lth to finance national development priorities including any init iative a imed at realising an inclu sive green economy. (3) The Fund shall be a public fund and sha ll be held in the name o f the Bank on behal f of the Government and people of Guyana. (4) All investments made pursuant to this Act, including those managed by private managers, sha ll be held in the name of the Bank on behalf of the G overnment and people of Guyana. (5) The Fund shal l be managed separately from the reserves of the Ba nk . 4. The Fund sha ll be managed according to the principles o f good go vernance inc luding tran sparency and accountabi lity, and international best practices including the Santiago Principles. PART Ill PUBLIC OVERSlGHT OF THE FUND 5. There is establ ished a committee to be known as the Public Accountabi lity and Oversight Committee . 6. The Public Accountabi lity and Oversight Comm ittee sha ll be responsible for (I) monitoring and eval uating the compl iance o f the Government and other relevant persons with the provi sions of this Act ; (2) mo nito ring and evalua ting w hether the Fund has been managed in accordance with the principles of transparency, good governance and international best practices including the Santiago Principles; (3) providing independent assessment of the management of the Fund and utili sation of withdrawa ls from the Fund: and 8 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 75 Mem bersh ip of Public Accoun labi I ity and 01'ersigh1 Committee . (4) faci I itating pub I ic consultations on the management o l' the Fund and utili sation of withdrawal s from the Fund. 7. (I) The Public Accountability and Oversight Committee shall consist of twenty-two members nominated in accordance with th is section and appointed by the President as follows (a) a representative nominated by a consortium o f civil-society organisations and community-based organisations; (b) a nominee to represent women nominated by a consortium of civil-society organi sations and community-based organi sations which represent women; (c) a nomi nee to represent youth nominated by a consortium of civil-society organisations and community-based organisatio ns which represent youth; (d) a nominee o f the Bar Associations of Guyana; (e) a nominee o f the G uyana Consumers Association; (1) a nominee o f the Guyana Extracti ve Industries Transparency Initiati ve; (g) a nominee o f the Transparency Institute of Guyana Inc; (h) a nominee of the Guyana Press Association ; (i) a nominee o f the most representative associations of trade unions; U) a nominee of the Institute of C hartered Accountan ts of Guyana ; (k) a nominee of the Private Sector Commission ; (I) one nominee from each of the ten Regional Democra ti c Councils; and (m) a nominee from academ ia nominated by the governin g council of the Un ivers ity of Guyana . (2) A person shall not be eligible for appointment as a member, or continue as a member, of the Public Accountability and Overs ight Committee, if that person (a) is a member of the Parliament; (b) is an employee of the Ministry; 9 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 76 (c) is an emp loyee or owner o f an organisat ion engaged by the Minister or Governor o f the Bank to ass ist wi th the management of the Fund ; (d) is a member of the Investment Comm ittee estab li shed unde r section 13 or the Macroeconomic Committee estab li shed under sect ion 20; ( e) is in so l vent or is. or has been. dec la red bankrupt: (I) is of unsound mind or otherw ise medically unfit for office; or (g) has been conv icted of any offence not m inor in nature . (3) The Pres ide nt may, afte r consultation w ith the re levant nominating entity, terminate the appoi ntmen t of any member of the Publi c Accountabi li ty and Oversight Committee (a) who contravenes or fai ls to comp ly with the prov isions of this Act; (b) where inform at ion relating to the conduct of the member. which could have precluded that member's appoin tm e nt if it had bee n made ava il able to the Pres ident, is brought to the attenti o n of the Pres id ent; (c) fo r incompetence; ( d) for 111 isbchaviour or m isconduct; (e) for inabil ity to perform as a member arising from in fi rm ity of body o r mind ; or (f) fo r bankruptcy o r insolvency. ( 4) Where it appears to the Presi de nt that the re is cause to termi nate th e a ppointment o f a member unde r subsect io n (3) (a) the Pres ident sha ll noti fy . in w ri ti ng. the relevant no minating o rganisation and the member of the cause and shal I give the member an o pportunity to sub mi t an explanat ion or respo nse, w hich shal l be duly considered by the President before dec idin g whether to te rminate the ap poi ntme nt o f that member; a nd (b) the relevant replacement termi nated . nominating organisation for the mcm ber whose 10 sha ll nominate a appointment was THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 77 Remunerati on of members o f Public Accountability and Oversight Committee. Budget o f Public Accou ntabi lity anti Oversight CommilltT. (5) A member of the Public Accountability and Oversight Committee may at any time by notice in writing to the President, resign from membership of the Public Accountability and Oversight Committee and the resulting vacancy shall be filled by another no minee of the relevant nominating authority under subsection (I). (6)A member of the Public Accountabi lity and Oversight C ommittee nominated by a Regional Democratic Council shall be appointed for a term of two years and may be reappointed for a further one term and in the case of a member nominated by any organisation other than a Regiona l Democratic Counci I, for a single term of three years . (7)The Public Accountability and Oversight Committee shall elect a chairperson and a deputy chairperson from among its members at thei r first meeting. (8)A decision of the Public Accountability and Oversight Committee shal l only be binding if it is taken by a majori ty vote with a quorum consisting of at least thirteen members, with at least five members of the quorum being members who were nominated by Regional Democratic Councils. (9) All other procedures of the Public Accountability and Oversight Committee shall be determined by its members. (10) The names of the members of the Public Accountability and Oversight Committee as first constituted and every change in the membership, whether by death , termination, res ignation or eftl u:xion o f time or for any other reason, shall be published in the Gazelle and in !\VO daily newspapers circulating in Guyana. 8. The members of the Public Accountability and Oversight Committee shall be paid remuneration approved under sec ti on 9. 9. (l)The Public Accountability and Oversight Committee shall prepare, in accordance with existing budget preparation gu idelines, and submit to the Public Accounts Committee a budget for the Public Accountability and Oversight Committee, including remuneration, work plans and programmes, for the next ensuing fi sca l year. (2) The Public Accounts Committee shall review the budget submission made under subsection (I), approve the budget, either in full or in part, and publish the approved budget on the ,vebsite of Parliament and else.,,vhere as the Public Accounts Committee considers necessary. (3)The approved budget of the Publ ic Accountability and Oversight Committee shall be financed by a direct charge o n the fund and shall be 11 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 78 Cap. 73:05 Repo rt ing of Pub lic Accountab ility and O versight Co1111nittcc. M in iste r respon sible for o vcrnll management of Fund . IJank res ponsible for operat io nal managc111en1 o f Fund . paid into an account at the Bank held in the name of the Public Accountability and Oversight Committee. (4)AII expenditures made by the Public Accountability and Oversight Committee shall be in keep ing with the accounting and repo11ing procedures o f Government and the Procure1nent Act. I 0. The Publ ic Accountability a nd Overs igh t Committee sha ll (a)publi sh bi-annual reports of its activities on its websi te o r the website of Parliament; (b) organise annual public consu ltatio ns to repo rt on the di scharge of its functions under this Act: and ( c) submit copies of its bi-annual reports to the Pres ident and to the National Assembly within s ixty days after the end of the firs t half o f each fiscal year as well as within sixty days after the end o f the second half of each fi sca l year. PARTIV MA AGEMENT OF THE FUND 11 . The Minister sha ll be responsible for the overall m a nagement of the Fund and shall (a) be responsible fo r preparing the Investment Mandate and incl ude the items specified in sectio n 36: (b) when preparing or amending the Investment Mandate, seek the advice of the Investment Committee establ ished under section 13 : (c) be assisted by the Senior Investment Adviser and Analyst; and (d) ente r into an operatio nal agreement with the Bank for the o perational management of the Fund . 12. (I) The Bank sha l I be respons ible for the o perat iona l management of the Fund and sha ll ma nage the Fund in accordance with the In vestment Mandate and the operatio nal agreement. (2) The operational agreement shall state (a) the fee charged by the Bank for the operati ona l ma nageme nt of the r:und ; (b) the liabi lity for paying d amages to the Government for losses that occur due to neg) igence o r intent o n the part of the Bank o r private manage rs in managing the Fund: and 12 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 79 Investment Committee. (c) all other matters required for the effective operationa l management of the Fund . (3) The Bank shall establish risk management arrangements and all necessary internal management systems for the operational management of the Fund. 13. (I) There is established a committee to be known as the Investment Comm ittee which shall consist of the following six members appointed by the Minister (a) a nominee of the Minister who shall be the Chairperson of the Committee ; (b) a nominee of the minister responsible for the administration of the petroleum sector; (c) a nominee of the Leader of the Opposition; (d) a nominee of the Guyana Assoc iation of Bankers: and (e) two ex c1{ficio non-voting members as follows (i) the Senior Investment Adv iser and Analyst; (ii) a nominee of the Governor of the Bank. (2) The members of the Investment Comm ittee shall be persons with (a) at least ten years' experience and expertise in financial investments and financial portfolio management ; and (b) a minimum of a master's degree from a reputable university in the discipline of finance or economics, o r an equivalent professiona l qualification. (3) The Minister shall be responsible for paying the remuneration of any member of the In vestment Committee that, in the Minister' s estimation, is entit led to remuneration. (4) A person shall not be e ligible for appointment as a member, or continue as a member, of the In vestment Committee, where that person (a) is a member of Parliament; (b) is a Minister; ( c) is, or has been, declared bankrupt; (d) is medically unfit for office; 13 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 80 (e) has been convicted of a ny offence not minor in nature: or (t) has d ue to personal or famil y interests and investments. a confl ict of inte rest. (5) T he Mini ster may te rminate the appo intment of any member of the In vestment Committee (a) who contravenes or fails to comply with the provis ions o f th is Act; (b) if informatio n re lating to the conduct of a member. w hich could have prec luded that member ' s appo intme nt if it had been made avai lab le to the M ini ster, is brought to the attenti on of the Mini ster ; (c) fo r incompetence; (d) for misbehaviour or mi sco nduct; (e) for inability to perform the functi o ns of that member· s office aris in g from infi rmity of body or mind ; or (f) fo r bankruptcy or inso lve ncy. (6) Where it appears to the Min ister that there is cause to te rm inate the appo in tment of a member unde r su bsecti on (5) (a) the Mini ste r sha ll noti fy, in writing, the relevant nom inating organi sati on and the mem ber of the cause and sha ll g ive the member an o pportunity to submit an exp lanation or res ponse, which shal I be duly cons ide red by the Min iste r be fo re dee id in g whether to term in ate the appo intment of that member; and (b) the nom inating en ti ty, where appl icable, shall nomina te a replacement fo r the member \.\'hose appointment was te rm inated. (7) A member of the Investment Committee may at any time by notice in writing to the Minister, res ign from mem bership of the Investment Committee and the resulting vacancy created by the res ignation o f a me mber sha ll be fil led in accordance w ith s ubsect ion (I). (8) Members sha l I be appointed for a term o f four yea rs and may be reappointed for one further term . (9) The terms and conditions of appoin tment o f the members o f the Investment Committee sha ll be determined by the M ini ster. 14 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 81 Functions o f Inves tment Committee. ( I 0) Until the Mini ster presc ribes by order, the procedure of tht.: Investme nt Committee, the Investment Committee shall dete rmine its procedure. ( I I) The names of the members o f the In vestment Committee as first constituted and every change in the me mbership, w hethe r by death, termination, resignation or effl uxion of time o r for a ny other reason shal l be pub I ished in the Gazelle, on the webs ite o f the Ministry and in two dai ly newspapers ci rculati ng in G uyana. 14. (I) T he Investmen t Comm ittce establi shed under section 13 sha ll be responsi ble fo r adv is ing the Mini ster on the Investment Mandate refe rred to in section 11 and, in doing so, shall take account of (a) the overall objec tives of the Fund as o utl ined in th is Act; (b) the current conditions, opportunities and constraints in re levant financial markets ; (c) the need to ensure sufficient funds a re ava ilable fo r withdrawals from the Fund ; ( d) internatio nal best practices in in vestment portfolio management: (e) the principle of financial diversification w ith the objecti ve of maximising risk-adjusted financial return s and taking into account the capacity of the inst ituti ons invo lved in the management of the Fund and Guyana's ability to bear financia l ri sk; ( t) the need for the Fund, in the long term, to achieve on average over a number of years a rea l total return of at least three percent per a nnum, in United States Dollars, while minimi s ing ri sk; (g) the need for the Fund to fo llow a stra tegic asset a l location strategy whereby over time as the balance of the Fund increases the percentage of the Fund in vested in low ri sk e li g ible asset c lasses decreases and the percentage of the Fund invested in h igher risk e ligible asset c lasses increases; (h) the need for the Fund to avoid tac tical asset a llocation; (i) the financial modelling referred to in section l 6(d); (j) the fees charged by the Bank as operational manager of the Fund ; 15 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 82 Senior I nvesuncn l /\dviscr and /\11al ys1. Functions of Senior ln vc stmcn l Adviser and t\ na lysl. Investment /\d , ·isor) Scr'"i ces Company. (k) the fees charged by private managers; a nd (I) any other relevant info rmation. (2)The advice of the Investment Committee sha ll be conta ined in w ritten reports submitted to the Mini ster at least annually o r within twenty workin g days o f the Mini ste r req uesting such advice. (3)The Investm ent Committee sha ll within thi11y working days of the end of every fisca l year submit a report on its activit ies to the Minister . 15. ( I ) The Ministe r sha ll appoint a Senior Investment Adv iser and Analyst who shal l be emp loyed on term s and conditions, including the payment of pens ions. gratuiti es or othe r li ke benefits. as determined by the Mi nister with the approval of Cabinet. (2) The Senior In vestment Adviser and A na lyst sha ll possess a minimum o f ten years of releva nt pro fessi o na l exper ience and shall at the minimum be the holder of a master's degree in economics o r fi nance. or an equivalent pro fess io na l qualificati on, from a reputable institution. (3) The Senior Investment /\dvi se r a nd Ana lyst shall be recruited through an open and compet iti ve recruitment process wh ich shal l be open to c itizens of Guya na a nd non-citizens of Guyana. 16. The Seni or In vestment Adv iser and A na lyst sha ll be responsi ble for (a) ass ist ing the Mini ste r w ith the draftin g of the Investment Mandate referred to in section I l : (b) ass isting the M ini ster with repo rt ing on and monitoring the fina ncial performance of the Fund ; (c) suppo rting the Investment Comm ittee established under section 13 vvi th the undertak ing of its funct ions ; (d) unde11aking financia l modelling showing the expected total return pe r ann um and ri sk of different a llocations of the Fund across diffe rent e li gib le asset classes a nd presenting th is mode lling to the Mini ster and Investmen t Committee: and (e) performing other tasks re lated to the management of the Fund as dete rm ined by the Minister. 17. ( I) T he Minister may. th rough a competitive and o pen procurement process, procure the se rvices o f an investment advisory serv ices company to prov ide advice on the Investment Mandate re fe rred to in section I 1. 16 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 83 Priva te managers. (2) The investment advisory services company whose se rvices are procured sh al I (a) have a sound record of operational and financial performance spanning at least ten years; (b) have references and a reputati on in the field of investment advisory services which is of the highest standard; and (c) have experience adv ising a sovereign wealth fund o r other large institutional investor on strategic asset allocation. (3) The Minister shal l be responsible for paying the fees of the investment advisory serv ices company. (4) Any reports and written advice the Minister receives from the investment advisory services company shall be shared w ith the Investment Committee established under section 13. (5) An organisation currently employed as a private manager shall not be procured as the investment adv isory services company. 18. (I) The Governor of the Bank may procure the services of private managers to manage part of the balance of the Fund. (2)The Bank, when procuring private managers, shall do so through a competitive and open procmement process that is in accordance with existing law or, in the case in which a private manager may be a supra national organ isation to which Guyana is a member, shall do so through any procurement process in accordance with exist ing law. (3) A private manager shall (a) be a lega l entity; (b)have sufficient capital and adequate insurance against operational ri sk; (c)have a sou nd record of operational and financial performance spanning at least ten years ; (d)have references and a reputation in the field of fund management which is of the highest standard; and (e) have a long-term debt rating which is equal to, or the equivalent ot~ A(-) or above from at least two of the fo llow ing three institutions (i) Fitch; 17 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 84 Custodians. (ii) Moody's; (ii i) Standard a nd Poor· s. (4) Private managers shall manage fund s in accordance w ith a management agreement entered into with the Bank and an Investment Instruction including the matters specified in subsect io n (6) , which sha ll be included as an attachment to the management agreement. (5) The management agreement referred to in subsection (4) sha ll (a) state the fee s to be paid to the private manager; {b) provide fo r the liability of the private manager for losses th at occur due to neg ligence or intent o n the part o f the private manage r; {c) include a code of conduct fo r the private manage r; and (d) include any other information that the Bank considers necessary or as may be required by lav,. (6) The In vestment Instructio n referred to in subsection (4) shall include (a) instruct ions on the investmen ts that the private ma nage r can make ; (b) a relevant index fo r these in vestments: (c) the maximum acceptable trackin g error between the index and investments ; (d) deta il s o f, and deadlines for, a ny repo rts the Bank requires from the private manage r; a nd (e) such other directions as the Bank deems fit. (7) Any company current ly engaged as the investment advisory se rvices company sha l I not be procured as a private manager. 19. ( I) The Governor of the Bank may, through a competiti ve and open procurement process, procure the services of a custodian for the sa fekee ping of a ll o r some o f the investments of the Fund. (2) A custodian appointed shall (a) be a lega l enti ty; (b) have sufficien t cap ital and adequate insura nce aga inst 18 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 85 Macroeconom ic Committee. operational ri sk; (c) have a sou nd record of opera tional and fin ancial pe rformance spanning at least te n years; (d) have refe rences a nd a reputati on in the fi e ld o f custodianship which is of the highest standa rd ; and (e) have a long-term debt rating which is eq ua l to, or the equi va lent of, A(-) o r above fro m at least two o r the fo llowi ng three insti tut ions ( i)Fi tch ; (ii) Moody's ; ( iii) Standard and Poor's . (3) A custodian sha ll ho ld fu nds in accordance with the custodian agreement w ith the Bank. ( 4) The custodian agreement shall (a ) state the fees to be pa id to the custodian ; (b) prov ide for the I iab ii ity of the custod ian for losses that occur due to neg ligence o r inten t on the part of c ustod ian; and (c) inc lude any other such inform ation that the Bank conside rs necessary or as may be required by law. 20. ( 1) There is estab li shed a committee to be known as the Macroeconomic Comm ittee which sha ll be responsible for ad vis ing the Minister on the Econom ically Sustai nab le Amou nt. (2) T he Macroeconomic Commi ttee sha ll cons ist of the fo llowi ng fi ve members appointed by the Ministe r (a) a representative of the Ministry w ho sha ll be the Chairperson of the Macroeconomic Committee; (b) a no mi nee of the Leader of the Opposi tion; (c) a representati ve of the Bank nomi nated by the Governor of the Ban k; (d) a nominee of the Private Sector Commiss ion: and (e) a leading inte rn at io na l expert in macroeconom ics identified and approved by Cabinet. 19 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 86 (3) All members of the 1acroeconom ic Committee shall be persons with at least ten yea rs of experience of applied macroeconom ics and sha ll ho ld a m inimum of a master's degree in economics or a re la ted field fro m a reputabl e un ivers ity. (4) In addition to the requirements in subsect io n (3), the expert referred to in subsection (2)(e) shal l have at least ten years of professi ona l experience in appl ied macroeconomics and ho ld a doc tora te degree in macroeconomics fro m a reputable university. (5) A person sha ll not be e ligible for appoi ntment as a member. or continue as a member, of the Macroeconomic Com mittee. where that person (a) is a member of Parliament : (b) is a Minister: (c) is, or has been. declared bankrupt ; (d ) is medica lly unfit for office; (c) has been convicted of any offence not mino r in natu re: o r (t) has due to persona l or family interest and in vestments. a conflict of interest. (6) A member of the Macroeconomic Committee shall be a ppo inted for a te rm of fo ur years and may o nly be reappointed for one further term . (7) Unti l the Mi ni ste r presc ribes by order. the Mac roeconomic Commi ttee . the Macroeconomic de termine its procedure. procedure o f the Committee shall (8) The term s of appointment of the membe rs of the Mac roecono mic Committee. inc luding rem uneratio n if any, sha ll be determined by the Mini ster who sha ll be responsi ble for paying the remuneration of any member of the Macroeconomic Committee that is e nt it led to remune rati on. (9) T he Macroeconomic Committee shall w ithin th irty wo rking days of the end of every fi sca l year submit a re port o n its ac ti vities to the Ministe r. ( I 0) The Mini ste r may terminate the appointment of any member of the Macroeconon1ic Committee (a) w ho contravenes the prov isions of this Act: 20 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 87 (b) if information re lating to the conduct of a membe r. w hich co uld have precl uded that membe r' s appo intment if it had been made ava il able to the Mini ste r, is brought to the attention of the Ministe r; (c) for incom petence; (d) fo r mi sbehaviour or mi sconduct; (e) for inabi lity to perfor m the fu nc tions of that me mber' s office a ris ing from infirmity o f body o r mind; or ( t) fo r bankru ptcy or in solvency. ( 11 ) Whe re it appea rs to the M iniste r that there is cause to te rm inate the a ppointment of a membe r under subsect io n ( I 0) (a) the M inister sha ll notify the re levant nominating o rganisation and the membe r in w ritin g and sha ll give the membe r a n o pportunity to submit an expla nation o r response, whic h sha ll be dul y conside red by the M ini ster before dee iding whether to te rm in ate the appo intment o f that member; a nd (b) the nom inati ng entity, where ap p licable, sha ll nom inate a repl aceme nt fo r the mem be r whose appo intme nt was term inated . ( 12) A member of the Macroeconomic Comm ittee may at any time by notice in ,,niting to the Minis te r, res ign fro m membe rsh ip of the Macroeconomic Committee. ( 13) Where a vacancy is created by the res ignation of a me mber the vaca ncy created sha ll be fi lled in accorda nce w ith subsec tion (2) . ( 14) The names o f the mem bers o f the Macroeconomic Committee as first constituted a nd every c ha nge in the mem be rship, whether by death, termi nation, res ignation or effl ux ion of time or fo r any othe r reason sha ll be publ ished in the Gazetle , in two dai ly newspape rs c irc ulating in G uyana a nd on the we bsite o f the M in istry. PARTY DEPOSITS AND WITHDRAWA LS Deposits into Fund. 2 I . ( I) Petro leum revenues sha ll be directl y pa id into a bank account de nominated in Un ited States of A merica Do llars and he ld by the Bank as pa rt of the Fund . (2) Petro le um re venues sha ll inc lude all revenue fro m 21 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 88 (a) royalt ies, whether pa id in cash or in kind, due and payable by the ho lder of a petro leum I icence; (b) the Government's share of pro fit o il received under the te rms of a production sharing agreement or o the r agreement; ( c) the Government's sha re of pro tit gas recei vcd under the te rms of a producti on sharing agreement or other agreement; (d) any income tax or corporate income tax lev ied on the profi ts of compa nies o r indi vidual s undertaking production operations; (e) any cap ita l ga ins tax lev ied on the capital gains o f compa nies or ind ividuals undertaking production operations; (f) any property tax lev ied on the net property of compa nies o r individua ls unde rtaking producti on operations: (g) any petroleum income tax., add itiona l profits tax or any other future tax levied on the pro fits of companies or individ uals unde rtaking prod uction operations: (h) any signa ture bonus, di scovery bo nus, prod uc tion bonus or othe r bonus re lated to produc tio n operati ons or the award of a petro leum licence: and (i) any other current o r future fiscal instrument lev ied sole ly or mainly on companies o r ind ividua ls invo lved in productio n operations . (3) In the event that the Govern ment elects to part ic ipate in product ion operat ions th rough a nati onal oi l company, pe trole um revenues shall also include any amount (a) payable by the nat iona l o il company as royalty o r tax due in accordance wi th applicable law: (b) distributed by the nat iona l oil company as a di vidend to the Government; and (c) rea li sed fro m the sa le of Governrnent shares or equity 111 the nat iona l o i I company. (4) Petroleum revenues shall not inc lude revenue from (a) value added tax collected on inputs or outputs from 22 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 89 WithJr:l\\a ls from Fund. Direct charges on Fund. production operat ions; (b) customs duties col lec ted on inputs into production operatio ns: ( c) applicable statuto ry fees collected by regulatory agcnc ies: and (d) w ithho ld ing tax on payments made to contractors by companies or individuals undertaking productio n operations. (5) T he Minister may depos it excess mining and forest ry revenues into the Fund. (6) The total return from the investments of the Fund shall be retained by the Fund. (7) In this section "excess m111111g and fo rest ry revenues" means revenues from mining or forestry as the case may be that accrue due to the price of the relevant com modi ty being above its long-term average price or production of the re levant commodity being above its long-term average level of prod uction or both . 22. (I) The maximum amoun t that may be withdnnvn from the Fund in a fi sca l year sha ll be a po rtion of the Fund and sha ll not exceed the total withdrawa l fro m the Fund approved by the National Assembly for that fiscal year in accordance with section 28 . (2) All withdrawals from the Fund sha ll be depos ited into the Consolidated Fund and shall be used on ly to finance (a) national development prior it ies including any init iati ve aimed at realising an inclusive green economy; and (b) essen tial proj ects that are directly related to ameliorati ng the effect of a major natura l disaster. 23 . (I) The fees to be paid to the Bank under the operati ona l agreement referred to in section I I, the foes approved by the board of the Bank for any custodian, private managers and other third parties arising from the management of the Fund and the tees re lated to the audit of the Fund by the Aud itor Genera l or an external auditor ac ting on behalf of the Auditor Genera l, shall be paid directly from the Fund. (2) The approved budget of the Public Accountabi li ty and Overs ight Committee shall be a direct charge on the Fund . PART VI DETERM INATION OF WITHDRAWAL AMOUNTS 23 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 90 Economica lly and Fi sca l I) Sustainable A mount. Economica lly Sustainable A mount. 24 . The Econo mically and Fiscal ly Susta inable Amount fo r a fi scal year shall be the lesser o f the fo llowing amounts (a) the Economi ca lly Sustainable Amount for that fisca l year; and (b) the Fisca lly Sustainable Amou nt for that fi scal year. 25 . (1) The Economically Sustainable Amount is the maxim um amount that can, in the opin ion of the Mi nister afte r taking into account the recommendations of the Macroeconomic Committee established unde r section 20, be withdrawn from the Fund for the next ensu in g fiscal year wi tho ut diminishing the competitiveness of Guyana's economy. (2) T he Macroeconomic Committee shall submit to the Minister. at least annua lly and by deadlines determined by the M in ister, a report o n the Econom ica ll y Sustainable Amount which sha ll (a) ana lyse the impact on Guyana's economic competitiveness of past publ ic spending financed by past withdrawals from the Fund ; (b) ana lyse the potentia l impact of future pu b lic spending fina nced by poss ible futu re wi thd rawa ls from the fou nd on Guyana' s economic competitiveness taking into account the fo llowing variab les ( i) inflation; (i i)the exchange rate ; (ii i)the real effective exchange rate ; (iv)the ba lance of payments ; ( v)economic growth , particularly in the agri culture and manufacturing sectors; (vi)thc composition of public spend ing ; (vii)the need to maintain stability in public spend ing; (viii)publ ic debt; and (ix) other relevant econom ic ind icators ; (c) recommend the Econo mically Sustainable Amo unt fo r the next ensu ing fiscal year, and each of the next fo llowing th ree fi scal years: and 24 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 91 Fiscally Sustainable Am ount. Firsl Schedule . Emcrgcnc) fin ancing. Approva l of withdrawal s from Fu nd. (d) explain the economic logic underpinning the calcu lation of the Econom ica ll y Susta inable Amount. 26. ( I) The Fiscally Sustainable Amount is the max imum amo unt that can be withdrawn from the Fund in a fiscal year wh ile ensuring the long term fi nancial susta inability of the Fund , a fair inte r-generat ional di stribution of na tural resource wealth and maintaining sta bility in the ann ual withdrawa ls from the Fund. (2) The M ini ster is responsib le for calculating the Fiscally Sustainable Am ount. (3) The Fiscally Sustainable A mo unt sha ll be ca lculated by the I st of June of eac h yea r prior to the next ensuing fi sca l year for which the Fiscal ly Sustainable Amount is be ing determined. (4) The Fisca ll y S usta inable Amount shall be calcula ted at least annua ll y us ing the method as specified in the First Schedu le . 27. ( I) In the event of the occ urrence of a major natural disaster, the Mi ni ster may request a w ithdrawal fro m the Fund for emergency fina ncing. (2) A request pursuant to subsec tio n ( 1) shal l onl y be made by the Minister when there has been a major natural disaster in the current or two preceding fiscal yea rs. (3) The to tal amount requested for emergency financing for a fi sca l year shal l not exceed the Economically and Fiscally Sustainab le A mount for that fisca l yea r. PART VII PARLIAMENTARY APPROVAL FOR WITHDRAWALS 28 . ( I) The amount that the Minister shall req uest the National Assembly to approve as the wi thdrawal from the Fund for the next ensuin g fiscal year sha ll be inc luded in the annual budget proposal and sha ll not exceed, fo r that yea r, the Economica lly and f iscally Susta inable Amount plus any amount required fo r emergency financing. (2) T he amount that the Nat iona l Assembly sha ll approve as the withdrawal from the Fund fo r the next ensuing Fiscal Year shall be inc luded in the ann ual budget and sha ll not exceed, fo r that year, the Econom ica ll y and Fiscally Susta inable Amount plus any amount req uired for emergency financi ng. (3) In the event that the annual budget proposal approved by the Nat io nal Assembly for a fiscal year does not include a withdrawal for emergency financing and a major natu ra l disaster occ urs during that fi scal 25 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 92 Contents of annua l budget proposal. year, the Minister may request that the National Assembly approve a withdrawal fo r emergency fi na nc ing fo r that fi sca l yea r, which sha ll be included in a supple me ntary appropriation Bill. 29. ( I) T he an nua l budget proposa l sha ll inc lude (a) an estimate of the withdrawal from the Fund fo r the ne:--: t ensuing fiscal yea r and each o f the next following three fisca l years: (b) an estimate of the deposits into the Fund for the next ensuing fi sca l year and eac h of the next follow ing three fiscal yea rs: ( c) a detailed estim ate of petro leum revenues for the next ensuing fi sca l year and each of the next fo llowi ng three fiscal years ; (d) an esti mate of the expected nominal tota l return per ann um of the Fund fo r the next ensuing fisca l year and each of the next fo l low ing three fisca l years ; (e) a state me nt of the Econo mica ll y and fiscally Sustainable Amount for the next ensuing fiscal year. and each of the next fo ll owing three fiscal years; (f) a statement of the Economically S ustai na ble Amo unt for the nex t ensu ing fiscal year. and eac h o f the next fol lowing three fiscal years: (g) the report on the Economically Sustainable Amount prepared by the Macroeconomic Comm ittee estab l ishcd unde r section 20; (h) a statement of the f iscally Sustainable Amount for the next ensuing fiscal year, and eac h of the next fo llowing three fi sca l yea rs; ( i) a report ex pla ining how the Fiscally Sustainable Amount was ca lcu lated for the next ensuing fisca l year. and each o f the next fo llowing three fiscal years; (j) a statement expla inin g how the wi thd rawal from the Fu nd fo r the next ensuing fi sca l yea r a nd each of the next fo llow"ing three fi scal yea rs, sha ll be used to finance national development priorities inc luding any initiative a imed at rea li s ing an inclusive green economy; (k) a compa rison of actual wi thdrawals from the Fund with the amount approved by the National Assembly fo r w ithdrawa l fro m the Fund and the Economical ly and f isca ll y 26 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 93 Contents o f supp lementary Appropriati on l3ill for emergency li na ncing. Sustainable Amount fo r the past three fiscal years: a nd ( I) an explanation of how the Fund works and a summary o f its investments and fina ncia l performance . (2) In the event that the annua l budget proposa l includes a request for a withdrawal for emergency financing then in add iti on to the in formation out lined in subsectio n (I), the annual budget proposal sha ll incl ude (a) a detai led report describing the majo r natu ra l di saster and its impact on the e nv ironment a nd popul ati on of Guyana: (b) a detailed re po rt exp lai ning why a withdrawal fo r emergency financing is required. the projects it wi ll be used to finance and how those projects ame lio rate the effect of the majo r natu ra l disaster ; (c) a table showing fo r the next e nsuing fiscal year the total withdrawa l be ing requested from the Fund, the \ ithdrawal be ing req uested fo r emergency financing fo r that fi sca l yea r and the Econom ically and Fiscally Susta inable Amount fo r that fisca l year; and (d) a tab le showi ng any red uction in the Fi scall y Sustainable Am o unt for the subsequent e nsuin g fi scal year a nd each of the succeedi ng three fi sca l years due to the req uest for a w ithdrawal fo r emergency fin anc ing. 30 . A supplementary Appropriat ion Bill presented lo the ati ona l Assembly pursua nt to section 28(2) sha ll inc lude (a) a report describing the maj o r natura l di saster and it s impact on the environment and population of Guyana ; (b) a detailed repo rt explai ning why the withdrawal fo r emergency financing is requ ired, the projects it w ill be used to finance a nd how those projects a me liorate the effect of the majo r natura l d isaster· (c) a ta ble showing fo r the c urrent fi scal year the ,vi thdrawa l requested for emergency finan c ing, the w ithdrawal from the Fund approved in the annual budget and the Economically and Fiscally Susta inable A mount; and (d) a tabl e showing any reduction in the Fisca ll y S usta inable Amo unt for the next ensuing fi scal year a nd eac h o f the next fo ll owi ng three fiscal yea rs due to the requested withdrawal for eme rgency financing . 27 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 94 Eligible assel classes. PART VIII ELIGIBLE INVESTMENTS 3 1. (I ) T he Fund sha ll o nl y be invested in el ig ible asset c lasses w hich sh a l I be I im ited to (a) e li gi ble ban k depos its w hi c h are bank deposits held in Cnited States Do llars w ith fo reign fina nc ia l instituti o ns th at have a long-term bank depos it rat ing in a ca tegory w hic h is equa l to, or the equiva lent o f, A(-) o r a bove fro m at least two o f the fo ll owi ng three inst itu t ions ( i) Fi tch; (ii ) Mood y's; a nd (ii i) Standa rd and Poor' s, or a n account held at the Bank in G uya na Dol lars or United Sta tes Do llars; (b) e lig ib le treasu ry b ill s w hi ch a re t reasury b il ls issued by a sovere ign in their do mestic curre ncy where the do mestic currency of the sovere ign is a basket currency of the Spec ia l Draw ing Ri ghts and the sovere ign has a long-term c redi t rating for the ir domesti c cu rre ncy w hich is equa l to, o r the equiva lent of, A(-) or a bove fro m a t least o ne o f the fo llowing three institutio ns ( i) Fitch: ( ii ) Moody's; and ( iii ) Standa rd a nd Poor ' s: (c) e li g ibl e sovere ign bonds w hich a re a ny sovereign bonds included in the Barc lays G lobal Treasury Index: (d) el ig ible corporate bonds w hich are any corporate bo nds included in the Barc lays G lobal Agg regate Corporate Index ; (e ) e lig ible equ ities w hich a re any equities included in the M SC I World Index; (f) elig ible de ri va tives w hich a re de rivati ves tha t are solely based on assets he ld by the Fund and where the purchase o f th e de riva tive reduces the risk o f losses assoc iated w ith the 28 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 95 Minimum in ves tmen t in very sate investments. In vestment for long-term savings . Second Schedule Fund to remain unencumbered. unde rl y ing asset; and (g) e li g ible commod iti es which are lim ited to go ld . (2)A II in vestments in el ig ible treasu ry bill s, e ligible sovere ign bo nd s, el ig ib le corporate bond s, e li g ible equi ties, elig ible derivati ves and eligible comm od it ies sha ll be in fo reign assets. 32. ( I) Where the ba lance of the Fund is less than fi ve hundred mi ll ion United States Do lla rs then a ll o f the Fund sha ll be in vested in very safe in vestm ents. {2) Where the ba lance of the Fu nd is more than five hundred m ill io n United States Do lla rs and less than three times the amount approved by the Nat iona l Assembly for the ,v ithd rawa l from the f und fo r the next ensuing fisca l yea r then a ll o f the Fund sha ll be in vested in very sa fe in vestments. (3) Where the ba lance of the Fund is more than fi ve hundred milli on Uni ted States Dollars and more than th ree times the amount approved by the at iona l Assembly for the withdrawal fro m the Fund fo r the next ensuing fi scal year then the amo unt inves ted in very safe in vestments sha ll be equa l to the larger of (a) five hundred m illion Uni ted States Dol la rs; and (b) three times the amo unt approved by the 1ationa l Assembly fo r the withdrawa l fro m the Fund for the nex t ensu ing fisca l year. (4) For the purposes of thi s section, the term " very safe investments" means e ligible ba nk depos its and e lig ible treas ury bill s o nly. 33 . ( I) T he Fund sha ll , w ith the except ion of the amou nt invested under sect ion 32, be invested for the purpose o f long-term sav ings in e lig ible bank deposits, e ligi bl e treasury bills, e lig ible sovere ign bonds, e li gi ble corpo rate bonds, e li gib le equities, el igi ble der ivatives a nd e li g ible com modi ties. (2) T he amount o f the Fund invested fo r the purpose of long-term sav ings in an e ligib le asset c lass sha ll not be more than its ce iling as specified in the Second Sc hedule. (3) T he amount of the Fund invested fo r the purpose o f lo ng-term sav ings in a n e lig ible asse t c lass shall not be less than it s fioor as spec ilicd in the Second Schedule. 34 . ( I) The fi na ncial assets of the Fund sha ll not be enc umbered by any pe rson or ent ity . 29 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 96 (2) T he future petro leum revenues shall no t be encumbered by any person o r entity . (3) The Government sha ll not ( i)borrow or lend mo ney from the Fund; o r ( ii)hold a financial instrument that places or may place a liabil ity o r conti ngent liability on the Fund Provided th at, for the avoidance o f doubt, this sha ll not excl ude the Fund from investing in e ligible derivatives. ( 4) Any contract, agreement or arrangement that encumbers any fin ancial asset o f the Fund, o r future petroleum revenues. shall to the extent of such encumbrance, be null and void: Provided that thi s subsection shall not a pply to contracts. agreements o r arrangements in respect of eligible deri vat ives. (5) In thi s sect ion "encumbered" means (a)used to provide credit to Government, o r any other person or entity; (b) used as co llatera l for debts, guarantees, commitments or other liabilities of any person or en tity: (c) borrowed from ; and (d) used for borrow ing aga inst any o f the assets of the Fund . Passi1 c in,·cstmenl 35. The Fund shal l be invested accordin g to the principle of pass ive man agement. investm ent ma nagement which sha ll mean that (nl'e SllllC!ll Man date . (a) investments in e li g ible treasury bill s and eligible commodities shall be made to t rack indices included in the Investment Mandate under sec tion 36; (b) investments in elig ible sovereign bonds sha ll be made to track the Barclays G lobal T reasury Index ; (c) investments in el igi ble corporate bonds shall be made to track the Barclays G lobal Aggregate Corporate Index: and (d) investments in eli gi ble equities sha ll be made to track the MSCI Wor ld lndex, MSCI Wo rld ESG Leaders Index or the MSC! World Ex Fossil Fue ls Index. 36. T he Investment Mandate sha ll be prepared in accordance with this 30 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 97 /\ccounting. Reports and Fi nancial Statements. Act a nd sha ll inc lude (a) directions relating to the management of cred it, liquidity, operational, currency, marke t a nd other financia l ri sks; (b) directions rega rding ethical investments, including po lic ies, standards and procedures for avoiding prejudice to Guyana·s reputat io n as a respo nsible member of the world community; (c) the percentage of the Fund that sha ll be invested in each el ig ible asset class; (d) relevant ind ices for investments in e li gible treasury bil ls and e li gible commodities; (e) the relevan t index or indices for investments 111 e ligi ble equities from those indices listed in section 35 ; (f) the maximum acceptable track ing error between the re le vant index and the re levant e ligib le asset c lass; (g) directions relating to how frequentl y the Fund shall be rebalanced; and (h) suc h other directions, no t incons istent with this Act, as the M inister deems fit. PART IX ACCOUNTING, REPORTING AND AUDITING 37. The Bank shall ma intai n proper books of accou nts a nd reco rds for the Fund which accounts a nd reports sha ll confo rm to In ternat ional Financia l Reporting Standards . 38. ( I) The Ba nk sha ll , not later than twelve working days after the end o f each month, submit to the Minister monthly reports on the Fund which shall inc lL1de a summary of the fina ncial position of the Fund fo r the preceding month . (2) The Ba nk shall , not later than thirty working days after the end of each quarter of the fi sca l year, s ubmit to the M inistcr quarterly reports on the Fund for the preceding quarter which sha ll inc lude (a) inform ation on the performance and ac tivities of the Fund ; (b) a description of the fin anc ia l perfo rm a nce of the Fund ; (c) financial statements of the Fund ; and (d) a compari son of the fin anc ial performance of the Fund to t he re levant index for eac h eligible asset class. 31 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 98 In ternal audit. External aud it. / nual report. (3) T he fi na ncia l s tatements me ntio ned above sha ll be prepared in acco rdance with Inte rnati onal Fi na nc ial Re port ing Standa rds . 39. T he inte rna l aud it departme nt o f the Bank shall unde rtake an in te rnal aud it of the accoun ts , records and othe r docum ents re lati ng to the Fund at least a nnua ll y. 40. ( 1) A n ex ternal audit of the accounts, reco rds a nd o ther docume nts re lat ing to the Fund sha ll be unde rtaken annually by the Audi to r Gene ra l w ho may engage a n inte rnationa ll y recogni sed a ud iting firm to ass ist in the d ischa rge of thi s exte rna l aud it function. (2) T he Bank sha ll submit the a udi ted fina ncia l state ments of the Fund and the exte rna l aud itor's report to the M inister no late r than the 30tl: of April o f the fi sca l yea r fo llow ing the fisca l yea r that is be ing a udi ted . (3) The Audito r Genera l may c harge a cost recovery fee for the externa l a udit which shal l be pa id by the Fund. 41. ( I) The M ini ster sha ll prepare and cause to be la id before the Nationa l Assembly, as soon as practicable bu t not later than thirty days afte r the receipt of the aud ited financ ia l state me nts of the Fund a nd the external auditor's report from the Bank, the annua l re port of the Fund. (2) T he Bank sha ll , when requested by the Min ister. prov ide the M in ister w ith any info rmat ion required to prepa re the annua l report . (3) T he annual report referred to in subsect ion ( I) sha ll inc lude (a) a desc ription of the legal framework governing the Fund ; (b) a summary of the ma in obj ecti ves of the Fund ; (c) an expla nation of the re lat ionship be tween risk and tota l re turn and a n exp lanation of the expected nom inal tota l return per annu m a nd ex pec ted vo latility of the in vestments o Fthe Fund ; (d) the a ud ited fi nanc ia l statements of the Fund and ex ternal audi to r's report on the Fu nd: (e) deta il s of a ll de posi ts to, a nd w ithdrawa ls from, the Fu nd : (f) the no mi na l tota l re turn pe r annum from the Fund fro m its incepti on to date; (g) the annua l tota l ba lance o f the Fund fro m its inception to date; (h) a sum ma ry of the w ithd rawals to fi nance the budget o f the Pub lic Accountability a nd Overs ight Commi ttee ; 32 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 99 (i) a sum mary of the fees paid to the Bank, custod ians. private managers, the A udito r Genera l and any o ther third parties: (j) a table showing the market va lue fo r each e ligible asset c lass that com pri ses the Fund ; (k) a table show ing the amo un t invested under sec tion 32 and the a mount invested under sec tion 33 ; ( I) a table showi ng th e market va lue for each indi vidual e lig ib le bank deposit, e li gible treasury b il l. e li g ible sovere ign bond, e ligib le corporate bond, e li gib le equity, e ligi ble commodity and e lig ible der iva ti ve held by the Fund ; (m)a table show in g the market value o f in vestments per country; (n) a compari son of the investment performance of each e ligible asset class in the Fund per annum compared to its rele vant index si nce the inceptio n of the Fund; (o) a compari son of the amo unt approved by the Nati ona l Assembly fo r w ithdrawal from the Fund w ith the amount actually withdrawn from the Fund fo r each fi scal year fro m the inception of th e Fund ; (p} a comparison o f the amount actua lly withdrawn from the Fund and the nomina l total return per annum for each fi scal year from the incepti on of the Fund; (q) the In vestment Mandate referred to in section I I: (r) the In vestment Instruction referred to in sectio n 18(4) for each private manager; (s) the operational agreement reforred to in section 11 ; (t) the management agreements referred to in sec tion 18(4); (u ) advisory reports from the Investment Committee estab li shed und er section 13; (v) the reports from the Macroeconomic Comm ittee, establi shed under section 20, o n the Economi ca ll y Sustainable Amou nt; (w)a li st of al l persons sitting o n the Investment Committee and Macroeconomic Committee : (x) a detailed report explai ning how the projects funded by an y emergency financing for that fiscal year se rved to ame liora te 33 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 100 Pub licatio n o f reports. Con lidcntial ity. fvli s lcading in form ation . f'ailure lo publish informatio n. the effects of the relevant maj or natural di sas te r: and (y) al l other relevant information that the Min ister considers Parl iament requires to fully understand the performance of the Fund. 42 . The Minister sha ll publish on the website of the 1inistry and genera ll y make avai lable to the public (a) the annual report. audited financ ial s tatements and externa l auditor's report on the Fund within three working days after they are laid before the Nati onal Assembly; (b) the qua rterly reports and fi nancia l statements of the Fund with in thirty work ing days after they have been su bmi tted to the Minister by the Bank; (c) the monthl y reports within seven worki ng days after they have been submitted to the M iniste r by the Bank: (d) the operational agreement within seven working days after it has been executed : (e) the Investment Mandate referred to in sect ion 11 within seven working days after it has been sent to the Bank ; and (f) the In vestment Instructions referred to in section 18(4) within thi11y working days after they have been submitted to the Minister by the Bank. PARTX CO~FIDENTIALITY 43. Except as permitted under this Act or where required by any applicable law, a person who is employed, or ceases to be employed. in the ove rsight and management of the Fund sha ll not di sc lose to any other person any offic ia l informat ion wh ich the person may have obtai ned in the course of the r erson · s employment. PART XI PE AL TIES AND OFFEl'iCES 44. A person who g ives informat ion that is materially false or mi sleading, or knowingly inc ludes or permits to be inc luded , in any report or document information that is materially fa lse or misleading, commits an offence and is liable on convict ion on indictment to a fine of ten mi llion do! lars a nd to imprisonment for five years. 45. A person who fails to comply with any obligation to pub li sh information, provided for in th is Act, or leads someone else to fail to 34 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 101 Hindering exercise of powers or external aud itor. Disclosing con li denlia l information. Liahilily of legal entities. Scope o ftlli s Part. Codes of conduct. Secretariats to Committees . comply with, or hinde rs or leads someone e lse to hinder the comp liance with, the obligation commits an offence and is li ab le on convic tion on indictment to a fine of five m illion dollars and lo impri sonm ent fo r three yea rs. 46. A person who, directly or indirectly, hinders or leads someone elsL: to hinder the exercise of powers by an external auditor under thi s Act commits an indictable offence and is liabl e on conviction to a fine of fi ve mi Ilion dollars and to i mprisonrnent for th ree years. 47. A person who discloses official in form ati on in contraventio n of the provis ions of this Act commits a n offence and is liab le on summary conviction to a fine of fi ve million dollars and to impri sonment for three yea rs. 48. ( I) Legal persons, corporat ions or any o ther legal entities are liable for contraventions provided for in this Part when committed by its organs o r representatives in its na me and in the collective interest. (2) The liabil ity is exc luded where the agent has acted agai nst express orde rs or instructions properly issued. (3 ) The li a bility of the e ntiti es mentioned in subsection (2) does not exclude the ind ividual li abi lity of their respective agen ts. (4) The ent ities mentioned in the subsection ( I) are j ointl y and severally liab le for the payment of a ny fine o r compensation, or for the fulfilment of any ob ligati ons, derived from the facts or with incidence on matters covered by the scope of thi s Act. 49 . T he provis ion s included in this Part are w ithout prejudice to criminal and civi l liability under ap plicable law . PART XII MISCELLA EOUS 50. (I) The Public Accounts Com m ittee sha ll determine a code o f conduct to govern the members o f the Public Accoun tability and Oversight Com mittee and sha ll publish the code o n the website of the Parli ament. (2) The Minister shall determine a code of conduct to govern the members of the Investment Comm ittee establi shed unde r sec tion 13 and the Macroeconomic Comm iuee establ ished under sec tion 20 and publi sh the code on the website of the Ministry . 51. ( I) The Public Acco untabi li ty and Oversight Com mittee shall have analyt ica l, executive, administrative and secretari a l support provided by a Secretariat \Vh ich sha II be fi nanced by the app roved budget of the Com mittee and shall undertake such other functions as are determined by 35 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 102 Delega tion of fu nctio ns. Regulations. /\ct prcl'ai Is " ·he re inconsistencies \\'ilh it exis t. Conseq uent ial ;\mcnumcnl. Cap. 26:0 1 the Committee. (2) The Investment Committee a nd the Macroeconomic Comm ittee shall have ana lytica l, exec utive, adm in istrative and secreta ria l support provided by a Secretariat which shal l be provi ded by the M inister and shall unde rtake s uch other funct ions as are determined by the Investment Committee and the Macroeconom ic Committee, respectively. 52 . T he Mini ster may, in writing, de legate to an officia l of the Ministry any o f the Min iste r·s function s under thi s Act . 53 . T he Minister may make regu lations generally fo r the bette r carryi ng out of the purposes of thi s Ac t taking into account the genera ll y accepted princ ipl es and prac t ices on sovere ign wea lth funds as conta ined in the Sa ntiago Prin ciples, inc luding regulation s presc ribing the calculation of excess mining and fo restry revenues and the depos it of excess m ining and forestry revenues into the Fund pursuant to section 2 1. 54. In the event of a ny inconsistency between the prov1s1ons of thi s Act and the provisions o f any other law o n fi sca l matte rs and financial management , o r between the provisions of thi s Ac t and the terms of a petro leum licence, the provis ions of this Act shall prevail. 55 . The Integrity Commission Act is amended in Schedule L by the insertio n, immediately after the e ntry " Regiona l E~ecutive Office r and Head s of Departments of Regiona l Democratic Councils" , of the fo llowing (a) ·' Members of the Pub li c Accountab il ity and Oversight Comm ittee estab li shed under sect ion 5 of the Natura l Resource Fund Act" ; (b) " Members o f the Investment Committee established under sec ti on 13 of the Natural Resource r-und Act' '; (c) " Members of the Mac roeconomic Comm ittee estab lished under section 20 o f the Natural Resource Fund Act" 36 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 103 FIRST SCHEDULE ss. 4, 26 CALCULATING THE FISCALLY SUSTAINABLE AMOUNT The Min iste r when dete rm inin g the Fisca ll y Susta inable Amount shall calc ulate Benchmark Petroleum Revenues. Production Constrained Benchmark Petro leum Revenues. and the Fi scally Sustainab le Amount Ceiling. as well as whether Production Constrai ned Benchmark Petrole um Revenues have eve r exceeded th ree percent of the Ba lance o f the Fund. Benchmark Pct.-olcum Revenues 1. Benchmark Pet roleum Revenues is an estimate of petroleum revenues for a fi scal year usi ng a Benchmark Price for C rude Oil and an est imate of petro le um producti on fo r that fi scal yea r. 2. The estimate of petroleum producti on shal l be a conservati ve est imate of petroleum production based on data from persons un derta king prod uction operat ions and sha ll only include production from petroleum fields with signed fi eld development plans. 3. The Benchmark Price fo r Crude O il sha ll be the seven-year average of crud e o il prices from the most re levant benchmark for the preced ing three fi scal years. the current fi scal year that Benchmark Petrol eum Revenues is being forecasted in, and the succeeding th ree fi sca l years. 4. The crude oi l price for the current fi sca l year that Be nch ma rk Petrol eum Revenues is being forecasted shall be based on the average of the actual rea li sed prices for the months o f the fi scal year ava ilable at the time of the ca lculation. and the forecasted prices fo r the remaining months of the fisca l year for the re fe rence case from the most recently ava ilabl e Energy Information Admini stration Internati onal Energy Outlook. 5. The crud e oil price for the succeed ing three fiscal years referred to in paragraph 3 shal l be forec astcd based o n the average of the low and reference case from the most recently ava ilable Energy In fo rmati on Admini strat io n Intern at ional Energy Outlook. Production Constrained Benchmark Petroleum Revenues 6. Production Constra ined Benchmark Petrol eum Revenues vary with prod ucti on and are eq ual to: (a) sixty-seve n perc ent of Benchmark Petro leum Revenues when estimated petroleum producti on for the fi sca l year that the Fiscal ly Sustai nab le Amount is being calcul ated fo r is less than two hundred thousand barre ls of oi I per day; (b) fi fly percent of Benchmark Petroleum Revenues when estimated petroleum product ion for the fi sca l year that the Fiscall y Sustainable Amount is being ca lculated for is eq ual to or greater than two hundred thousand barrel s of oi I per day and less than fo ur hundred th ousand barrels of o il per day; and (c) thi rty-three percent of Benchmark Petroleum Revenues when estimated petroleum production for the fi scal yea r the Fi scall y Sustainable Amount is being ca lcu lated for is equal to or greater than four hundred thousand barre ls o f oi l per day. Fiscally Sustainable Amount Ceiling 7. The Fi scally Susta inab le Amount Ceil ing fo r a fi sca l year shall be equal to the greater of: (a) twenty-fi ve percent of the five-year average of non-petroleum revenues for the preceding two fi sca l years, current fi sca l year, and the succeed ing two fi scal years; and (b) three percent of the projected balance o f the Natural Resource Fund for that fi sca l year. Determination of the Fiscally Sustain~1ble Amount 37 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 No. 12] LAWS OF GUYANA [A.D. 2019 104 8. If three percent of the Ba lance of the Natural Resource Fund has never for any past fi scal year exceeded Production Constrained Benchmark Petroleum Revenues then the Fisca lly Sustainable Amount is equal to the lesser of: (a) Production Constra ined Benchmark Petroleum Revenues for the fisca l year the Fiscally Sustai nable Amount is being calculated for; and (b) the Fiscal ly Sustainable Amount Cei ling for the fisca l year the Fisca ll y Sustainab le Amount is being calcu lated for. 9. If in a past fiscal year three percent of the balance of the Natural Resource Fund for that past fi sca l year exceeded Production Constrained Benchmark Petro leum Reve nues for that past fisca l year then for all fu ture fi scal years the Fisca ll y Susta inable Amount shall not exceed three percent of the projected balance of the Fund for that fi scal year. 38 THE OFFICIAL GAZETTE [LEGAL SUPPLEMENT] — A 23RD JANUARY, 2019 A.D. 2019] TAX (AMENDMENT) ACT 2017 [No. 12 105 39 SECOND SCHEDULE s.33 CEILINGS AND FLOORS FOR THE INVESTMENT OF THE NATURAL RESOURCE FUND FOR THE PURPOSE OF LONG-TERM SAVINGS Eligible asset class or classes Floor as a percentage of the balance of the Fund (excluding the amount invested under section 32) Eligible treasury bills and eligible bank deposits combined 0% Eligible sovereign bonds 30% Eligible corporate bonds 0% Eligible equities 0% Eligible derivatives 0% Eligible commodities 0% Passed by the National Assembly on the 3rd January, 2019. Ceiling as a percentage of the balance of the Fund (excluding the amount invested under section 32) 45% 60% 20% 40% 10% 10% /#~{ ,Ys.I'f ra;;s, Clerk of the National Assembly. (BILL No. 14/2018)