Common use of Actions under the Program Clause in Contracts

Actions under the Program. The actions taken by the Borrower under the Program include the following: 1. The Borrower has taken actions to maintain fiscal space for priority spending, including the implementation of, inter alia: (a) a direct tax on business income to offset the decline in tax collections due to the expiration of the IETAAP in the year 2008; (b) mandatory use of the software application for income tax withholding to enhance income tax collection; and (c) cross-checks between value-added tax declarations and income tax submissions to reduce tax evasion. 2. The Borrower has completed the supervision of at least three risk profiles (out of the following four: liquidity, credit, operational, and market) under the Banking Superintendency’s risk-based consolidated supervision manual, in Financial Groups controlling at least half of the total bank assets of the domestic financial system. 3. The Borrower has carried out the standardization of its Central Bank debt instruments and the establishment of regular issuance to facilitate the market development of an interest rate yield curve, through the implementation of: (a) coordinated, weekly auctions of securities by its Central Bank and the MOF with broad participation of the financial sector, non-financial private sector and public sector; and (b) electronic issuance of 7-day securities. 4. The Congress of the Republic has approved legislation (Decreto 51-2007, the Ley de Garantías Mobiliarias, and reforms under Decreto No. 46-2008) to provide firms, particularly micro, small and medium enterprises, with the possibility of using their movable assets as collateral while keeping possession of the assets. 5. The Borrower has implemented the following mechanisms to enhance the control and transparency of the majority of public trust funds: (a) monthly reporting of financial accounts to the MOF and its General Auditor’s office; and (b) annual external audits of public trust funds. 6. In order to facilitate public access to information and transparency: (a) an access to information and transparency law has been approved by Congress of the Republic and is effective; and (b) the MOF has implemented the SAIP. 7. The Borrower: (a) has issued and is implementing Executive Decree 394-2008 for the internal reorganization of functions and responsibilities in the MOF to fully absorb, operate and upgrade the financial management and procurement framework systems SIAF and Guatecompras; and (b) has included provisions and technical indicators in its 2010 budget guidelines in order to start implementation of a results-informed budget system in central government entities. 8. The Borrower: (a) is implementing a transparent monitoring and evaluation system in the municipalities benefiting from Mi Familia PROGRESA that allows for the verification of conditions for cash transfers being met by families in the program; and (b) has received an external evaluation of risks under Mi Familia PROGRESA, related to design, instruments, conditionality, information flows, beneficiaries’ feedback and coordination with other institutions. 9. The Borrower, through SAT, has implemented a customs management system (SAQB’E) on cargo management and on the release and clearance of imported/exported goods and merchandise in transit, in at least three major customs entry points, managing over 30 percent of the Borrower’s total customs traffic.

Actions under the Program. The actions taken by the Borrower under the Program include the following: 1. The Borrower has taken actions to maintain fiscal space for priority spending, including the implementation of, inter alia: (a) a direct tax on business income to offset the decline in tax collections due to the expiration of the IETAAP in the year 2008; (b) mandatory use of the software application for income tax withholding to enhance income tax collection; and (c) cross-checks between value-added tax declarations and income tax submissions to reduce tax evasion. 2. The Borrower has completed the supervision of at least three risk profiles (out of the following four: liquidity, credit, operational, and market) under the Banking Superintendency’s risk-based consolidated supervision manual, in Financial Groups controlling at least half of the total bank assets of the domestic financial system. 3. The Borrower has carried out the standardization of its Central Bank debt instruments and the establishment of regular issuance to facilitate the market development of an interest rate yield curve, through the implementation of: (a) coordinated, weekly auctions of securities by its Central Bank and the MOF with broad participation of the financial sector, non-financial private sector and public sector; and (b) electronic issuance of 7-day securities. 4. The Congress of the Republic has approved legislation (Decreto 51-2007, the Ley de Garantías Mobiliarias, and reforms under Decreto No. 46-2008) to provide firms, particularly micro, small and medium enterprises, with the possibility of using their movable assets as collateral while keeping possession of the assets. 5. The Borrower has implemented the following mechanisms to enhance the control and transparency of the majority of public trust funds: (a) monthly reporting of financial accounts to the MOF and its General Auditor’s 's office; and (b) annual external audits of public trust funds. 6. In order to facilitate public access to information and transparency: (a) an access to information and transparency law has been approved by Congress of the Republic and is effective; and (b) the MOF has implemented the SAIP. 7. The Borrower: (a) has issued and is implementing Executive Decree 394-2008 for the internal reorganization of functions and responsibilities in the MOF to fully absorb, operate and upgrade the financial management and procurement framework systems SIAF and Guatecompras; and (b) has included provisions and technical indicators in its 2010 budget guidelines in order to start implementation of a results-informed budget system in central government entities. 8. The Borrower: (a) is implementing a transparent monitoring and evaluation system in the municipalities benefiting from Mi Familia PROGRESA that allows for the verification of conditions for cash transfers being met by families in the program; and (b) has received an external evaluation of risks under Mi Familia PROGRESA, related to design, instruments, conditionality, information flows, beneficiaries’ feedback and coordination with other institutions. 9. The Borrower, through SAT, has implemented a customs management system (SAQB’E) on cargo management and on the release and clearance of imported/exported goods and merchandise in transit, in at least three major customs entry points, managing over 30 percent of the Borrower’s total customs traffic.