On December 19, 2016, the Law of Modernization and Strengthening
of the Norms that Regulate the Functioning of the Paraguayan
Financial System (Law 5.787/16) was promulgated, which modifies the
previous Bank law in the following key ways:
1) Initial vetting for establishment of financial entities. The
Paraguayan Central Bank ("BCP") may reject applications
to establish banks and other financial institutions when it
it's not fully satisfied with the suitability of the project,
the profile of the directors, administrators or auditors, taking
into account the profile of the shareholders and origin of the
2) Transparency regarding final beneficiaries. The BCP may
request information regarding any shareholder of a financial
entity, up to the final beneficiary of a corporate entity
3) Prohibition on serving as president, director, manager,
accountant or auditor of a financial entity for those who have: (a)
been convicted for intentional crimes; (b) been sanctioned by local
or international financial regulators for poor professional
performance; (c) a conflict of interest that could affect the
proper functioning of the entity. The Banking Superintendent
("BS") of the BCP may also demand that individuals that
incur in one of these infractions while serving in one of those
roles to step down from their position.
4) Makes the president and board of directors of financial
entities responsible for: (a) approving operations and adopting
agreements that conflict with applicable laws; (b) failing to
implement efficient policies and procedures for risk management and
corporate governance; (c) noncompliance with BCP guidance; (d)
failure to provide timely information to the SB in the correct
format; (e) failing to respond to communications from the SB or
BCP; (f) failure to adopt measures needed to guarantee adequate
supervision of an external auditor; (g) failure to comply with
applicable laws or regulations. The BCP may issue sanctions for
such conduct. 5) Lifting of the bank secrecy when information is
requested by: (a) BCP and its supervision branches performing their
legal faculties; (b) judicial authorities through resolutions
issued in processes where the affected person is a party, taking
appropriate measures to preserve confidentiality; (c) the
Republic's General Comptroller performing his functions, as
long as it is referred to a specific person, there is a
verification or audit on the same and it is formally requested; (d)
the head of the Taxation Subsecretariat or the National Customs
Direction performing their functions, as long it is referred to a
specific person, there is a verification on the same and it is
formally requested; (e) the Attorney General and public prosecutors
performing their functions; (f) the Secretariat on Prevention of
Money and Assets Laundering (SEPRELAD) performing its functions;
and (g) financial entities exchanging information among them,
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Until the new Civil and Commercial Code of the Nation (Código Civil y Comercial de la Nación or CCCN) became in force on August 1, 2015, distribution agreements had not had statutory regulation in Argentina.
In order to remunerate the invested capital, Brazilian companies are allowed to distribute earnings to their shareholders in the form of dividends or under the concept of interest on net equity (juros sobre o capital próprio – JCP).
Brazil remains among the ten most-complex nations in the world for multinational companies to stay compliant with corporate regulation and legislation, although signs of improvement are showing.
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