The Emergency Mitigation Fund (“FOME” for its Spanish acronym) is created as an account fund without legal status of the Ministry of Finance and Public Credit.

Its objective is to meet the needs of resources for health care, adverse effects generated to the productive activity and the need for the economy to continue providing conditions that maintain employment and growth. The resources come from:
i.    The Savings and Stabilization Fund (“FAE” for its Spanish acronym).
ii.    The Territorial Pension Fund (“FONPET” for its Spanish acronym).
iii.    The General Budget of the Nation.
iv.    The financial returns generated by the administration of the resources. 
v.    Those determined by the National Government. 

The General Management of Public Credit and National Treasury of the Ministry of Finance and Public Credit, through an independent portfolio, shall be the entity in charge of managing the resources.

The use of the resources relies on:
i.    To meet the additional needs generated by the entities that are part of the National General Budget.
ii.    Paying the costs generated by the execution of the instruments and/or contracts executed for the fulfillment of their purpose.
iii.    Carry out temporary liquidity support operations to the financial sector through temporary transfer of securities, term deposits, among others. 
iv.    Invest in equity or debt instruments issued by private, public or mixed companies that carry out activities of national interest, including shares with special participation conditions, dividends and/or repurchase, among others. 
v.    Provide direct financing to private, public, or mixed enterprises engaged in activities of national interest. 
vi.    Provide liquidity to the Nation, only in those events in which the effects of the emergency extend to ordinary sources of liquidity. 

All decisions on FOME resources must be evaluated jointly and shall relay on the context of their purpose. 

The Ministry of Finance and Public Credit is authorized to provide financing or grant subsidies at interest rates, guarantees, etc., as long as they comply with the objectives of the regulation. 

The FOME is administered by the Ministry of Finance and Public Credit, which is the entity in charge of carrying out the contractual, accounting and budgetary procedures. 
The following are the functions of FOME:
i.    To carry out the operations and administrative, financial, budgetary and accounting activities of the Fund, in accordance with the legal and regulatory provisions. 
ii.    Keep the accounts, through the General Management Unit. 
iii.    Execute the Fund's resources.
iv.    All the other tasks related to the administration and management of expenditure. 

It will also be responsible for conducting temporary liquidity support operations for the financial sector through temporary transfers of values. 

In this case, the representative titles of commercial, housing, consumer and/or financial leasing, issued by a credit institution, are admitted as collateral.

The Reserve Fund for the Stabilization of the Mortgage Portfolio -FRECH- may be hired to carry out and/or execute the temporary transfer of securities operations. 

Such operations may only be carried out to prevent the extension of the effects of the emergency or to avert the crisis and may not exceed 365 days from their execution. 

The deposits made by the General Direction of Public Credit and National Treasury with FOME resources to first and second floor state banks are considered liquidity supports. These shall have a term of 12 months and shall be made in Colombian legal currency. 

On the other hand, the Savings and Stabilization Fund (“FAE” for its Spanish acronym) of the General Royalty System will lend the Nation up to 80% of the resources saved, as required. This operation will take the form of promissory notes issued by the Nation, which may be dematerialized in the Central Securities Deposit of the Colombian Central Bank, which is authorized to carry out the required operations. These resources shall be transferred in dollars of the United States of America by the Colombia Central Bank. 

These resources will be remunerated at an interest rate of 0% and their amortization will be made from 2023, it will be equivalent to one billion pesos per year settled at the Market Representative Rate in effect for each payment, until the obligation is extinguished. However, the promissory notes on which the loans are materialized may be redeemed in advance in the amounts necessary to meet the shortfall in SAF. These operations will be paid from the debt service line of the National Budget. 

The resources in favor of the National Pension Fund of the Territorial Entities -FONPET that are not distributed to the individual accounts of the territorial entities, managed both in the General Directorate of Public Credit and National Treasury and in the autonomous patrimony FONPET, may be subject to loan to the Nation and destined to the FOME, will be the following:
i.    The collection of the national stamp tax pending distribution in FONPET as of December 31, 2019 and its income.
ii.    The collection of the national stamp tax to be remitted to FONPET in the present term. 
iii.    The distribution pending amount to the FONPET for privatizations as of December 31, 2019 and its income.
iv.    The value of privatizations to be transferred to the FONPET by the year 2020.
v.    The value to be distributed to the FONPET for capitalizations at December 31, 2019 and its yields. 

The national government must reimburse these resources to the FONPET during the 10 fiscal years following the date of disbursement. These will be charged to the debt service item of the National General Budget.

The Nation may carry out credit operations using as a source of payment the resources that will be drawn in the periods 2020, 2021 and 2022 to the FONPET. 

The payment of these obligations shall be made with a charge to the debt service item of the National General Budget. These resources shall be reimbursed during a maximum of 10 fiscal periods following the extinction of the obligation. 

In the event that all the sources of resources destined to finance the Economic, Social and Ecological Emergency are exhausted, the resources of the National Fund of Pensions of the Territorial Entities -FONPET may be used as a loan, as long as the payment of the obligations charged to this Fund is not committed. The loans granted by the Fund shall be paid within 10 years following the disbursement of the resources and shall be remunerated at market interest rates. 

With the exclusive purpose of guaranteeing the continuity in the operation of companies that provide services of national interest and that are seriously affected by the emergency decreed, the Government may invest in capital and/or debt instruments issued by private, public or mixed companies, including shares with special participation, dividend and/or repurchase conditions, among others charged to the resources of the FOME. The Ministry of Finance and Public Credit shall be in charge of determining investments, which shall be jointly evaluated according to the social and economic needs of the moment. 

FOME resources shall be budgeted in the section of the Ministry of Finance and Public Credit to be distributed to entities that are part of the General Budget of the Nation. 

These resources will have as their sole and exclusive destination the impediment of the crisis unleashed by the Coronavirus – Covid -19. 

Once its purpose has been fulfilled, FOME will be liquidated by the Ministry of Finance and Public Credit as long as it has fulfilled its obligations. The balances will be returned to the Nation - Ministry of Finance and Public Credit.