Supreme Decree No. 5727 of 24 September 2026 opens with an admission rarely found in an official text. Its recitals concede that earlier attempts to restructure or wind up state companies, launched without deadlines, without protecting assets and without measuring the fiscal cost, dragged on for years. Assets decayed, labour, tax and litigation liabilities piled up, and the bill landed on the National Treasury (TGN). The decree is meant to stop that happening again. It makes the reorganisation, dissolution or liquidation of central-government state companies a priority for the Executive, and sets the route each case must follow from the technical diagnosis that the Technical Office for the Strengthening of Public Enterprises (OFEP) prepared under Article 6 of Law No. 1755 and that the Higher Strategic Council for Public Enterprises (COSEEP) must approve.
The OFEP reviewed 67 companies. In April its director said 15 were technically bankrupt, with accumulated losses of Bs 2,655 million and negative equity of Bs 1,901 million; those he named included the flag carrier Boliviana de Aviación (BoA) and the state lithium company Yacimientos de Litio Bolivianos (YLB). Being on that list is not a closure order, since the diagnosis can also recommend that a company carry on or be reorganised.
The decree gets right the part that depends on the Executive's own discipline, namely short deadlines for ministries and an immediate freeze on the company concerned. It leaves open the part that depends on others. There is no deadline for the final decision and no duty to warn those who deal with these companies. For suppliers, lenders and debtors, the immediate risk is not liquidation. It is the frozen period that comes before it.
Two days to turn off the tap
The core mechanism is in Article 5. Once the COSEEP approves a diagnosis recommending dissolution or liquidation, the sector ministry has two business days to serve the resolution on the company. From then on the company may not borrow or seek TGN guarantees; may not sell, encumber, transfer or lease out its fixed assets or real estate; and may not sign contracts for goods, works or services running beyond the current fiscal year, or any new investment contract. Nor may it hire permanent staff, other than indispensable replacements for operational continuity or industrial safety, approve pay rises, bonuses or extraordinary benefits, or waive, write off or reschedule what others owe it.
The contracts clause reaches furthest beyond the company itself. Bolivia's fiscal year is the calendar year, so a company notified today cannot commit beyond 31 December 2026. Supply contracts for 2027, multi-year maintenance agreements and any renewal that crosses the year-end are off the table unless the ministry grants the express, reasoned authorisation that paragraph II allows. Officials who breach the rules answer for it under Law No. 1178 on Government Administration and Control (SAFCO).
What the counterparty cannot see
The lock is triggered by serving notice on the company. The decree does not require the OFEP diagnosis or the COSEEP resolutions to be published. It does impose transparency later on, when the liquidating entity must report progress on its website, ministries must file six-monthly reports with the COSEEP and the Executive must send the Plurinational Legislative Assembly a final report on each case. Between notification and the liquidation instrument, however, anyone negotiating with a state company has no way of knowing, from the decree itself, whether that company has already been frozen.
Nor does it say what becomes of a contract signed in breach. The consequence it provides for is the liability of the official who signed; on the validity of the deal as against the other party it is silent. That question is left to the general rules on public contracting, and a supplier who raises it will do so after delivering. The sensible precaution is to ask, before signing or renewing with a state company, for a written statement that it has not been served with a COSEEP resolution or that it holds the authorisation under Article 5(II). Banks lending to these companies should ask the same question, since neither new credit nor a TGN guarantee will be available after notification. Anyone who owes money to a state company and hoped to reschedule should move quickly, because notification closes that door unless the ministry authorises otherwise.
Short deadlines, open ending
The rest of the procedure is also in a hurry. If the COSEEP recommends reorganisation, the ministry has fifteen business days to arrange the necessary regulatory instruments. If it recommends dissolution or liquidation, the ministry has the same period to submit to the Ministry of the Presidency a draft supreme decree, where the company was created by decree, or a draft bill, where it was created by law. The proposal must meet the requirements of Articles 118 and 121 of Supreme Decree No. 5675 on the Organisation of the Executive, and must also name the liquidating entity and its powers, set a liquidation period with verifiable milestones, specify how assets, liabilities and TGN guarantees are to be handled, and order that information be passed on so that officials' accountability can be determined.
What the decree does not fix is when that instrument is approved. There is no deadline for the Council of Ministers and, naturally, none for the Assembly, which has the final word on companies created by law. A company can therefore sit notified, and frozen, for months before the instrument that dissolves it exists. That is a new version of the problem the recitals describe, except that the company now keeps operating with its hands tied. Article 6 confirms that reorganisation does not suspend operations and that the company must meet its obligations; for dissolution, it defers to the instrument that orders it. Processes begun before Law No. 1755 carry on under their own rules, according to the sole transitional provision.
There is also a limit that is not legal. The last closure of a sizeable state company, the textile maker ENATEX in May 2016 under Supreme Decree No. 2765, cost some 850 jobs and led the Bolivian Workers' Centre (COB) to call a 48-hour strike. Decree 5727 says nothing about workers' rights beyond freezing hiring and pay rises, and leaves them, like every other liability, to each liquidation instrument. Where it does learn from the past is Article 8, which separates the determination of officials' accountability from the winding-up. No audit or investigation will suspend a liquidation, and liquidating a company does not absolve those who ran it.
What to do now
For private companies exposed to the public sector, the immediate task is an inventory. Identify the contracts, loans, guarantees and receivables held with central-government state companies, check which run beyond December 2026, and ask for a status statement before signing anything new. Investors have an opportunity too, though a slower one. Each liquidation instrument must say what happens to the assets and on what timetable, with verifiable milestones, and that is where plants, equipment and property will come up for sale. Until then, Article 5 keeps them off the market.
