Author: dev_

Legal500, one of the world's leading law firm directories, has recently published its latest edition of law firm rankings in Latin America and the rest of the world.

Vouga Abogados topped the rankings with seven recommended practice areas - the highest number among firms in Paraguay and the only one with recommendations in all practice areas listed in the country. Vouga ranked first in three of them and second in three others - the only law firm in Paraguay with three areas in the top tier.

Thus, the Firm ranks at the top with the Corporate/M&A, Tax and Litigation practice areas. In addition, the Firm has recommendations for the practice areas of Banking and Finance, Environmental Law, Intellectual Property and finally, Labor Law and Social Security.

We thank our customers and friends for their continued trust.

On September 7, 2015, the Secretariat for the Prevention of Money or Asset Laundering (“SEPRELAD”) issued Resolution No. 345/2015 by which it establishes the preventive policies to be adopted by the regulated entities supervised by the Central Bank of Paraguay (i.e. financial and banking entities operating in Paraguay, inter alia), in their procedures for the identification of shareholders of legal entities operating as their clients.

Among the measures to be adopted are the following:

• To request its customers to convert their bearer shares into registered shares or, failing that, to deposit such shares in an entity of the national financial system.
• To request companies incorporated abroad whose capital is represented by bearer shares and wish to operate with subjects supervised by the Central Bank of Paraguay (“BCP”), to prove the identity of the beneficial owner of such shares by means of a sworn statement before a Notary Public.

This Resolution also approves a bearer share registry to be implemented by the BCP. The procedures and deadlines will be established later on.

Finally, SEPRELAD states that the refusal to provide the information as required by Resolution No. 345/2015 will constitute a red flag under the terms of the regulations on the prevention of money laundering, financing of terrorism and proliferation of weapons of mass destruction.

In addition, the modification of the rules of the Civil Code relating to bearer shares is currently being evaluated.

For further information, please do not hesitate to contact us at info@vouga.com.py.

The growth of the real estate market in Paraguay has been constant and marked in recent years. The purpose of this article is to address the legal incentives that Paraguay offers for the investment of capital from foreign countries, which, although of a general nature, apply equally to investments in real estate businesses, as well as the different legal instruments that can be used under Paraguayan law to guarantee compliance with the obligations undertaken in the framework of real estate investments, as well as for the development of the real estate businesses themselves, as is the case of trusts.

Please download the full article below.

Note: This article does not constitute a legal opinion or a recommendation or advice for a particular case. It is recommended that legal advice be sought.

The latest edition of Chambers Latin America Guide for 2016 rates Vouga Abogados in all practice areas listed for Paraguay, in addition to making individual recommendations of our lawyers.

Below is a list of recommended attorneys and practice areas.

Corporate/Commercial - Band 1

Rodolfo Vouga – Band 1

Perla Alderete – Band 2

Corporate/Commercial - Labor
Perla Alderete – Band 1

Resolución de Controversias – Band 1

Mirtha Dos Santos – Band 2

Banca & Finanzas – Band 1

Rodolfo Vouga – Band 1

Cynthia Fatecha – Band 2

Ambiental – Band 2

Jorge Figueredo – Band 2

Intellectual Property - Band 3

On August 25, 2015, the Paraguayan Executive Branch officially enacted Law No. 5476/15 “Establishing Rules for Transparency and User Defense in the Use of Credit and Debit Cards” (the “Law”), thus regulating several consumer defense and transparency issues in relation to credit cards. Its scope of application extends to cardholders, issuers, processors, financial institutions and intermediary entities.

Among other things, the Law regulates the following:

• Obligations of financial institutions to provide accurate, understandable and visible information.
• Notice periods for implementing changes in the scope of services provided.
• Mandatory clauses in credit card contracts, as well as prohibited clauses.
• No waiver of consumer rights.
• Regulation of the limits established for commission payments and interest rates.
• Credit card cancellation procedures for consumers.
• Additional services provided to card users and their acceptance.
• Contracting of insurance costs and protection against fraud in relation to the consumer.
• Penalties for non-compliance with the Law.

The Act will become effective on September 25, 2015, 30 days after its publication as provided therein.

The Multimedia Group received advice from Vouga Abogados for the sale of 100% of its shareholding to Grupo Nación de Comunicaciones.

The transaction closed on August 18, 2015 and consisted of the transfer of Diario Popular, the Hoy electronic newspaper and the Laser Stream online streaming service.

More information on this transaction can be found on Latin Lawyer's website, through the following link http://latinlawyer.com/news/article/48600/palacios-prono-vouga-steer-paraguayan-media-tie-up/

The Court of Accounts, 2nd Chamber, in charge of hearing contentious-administrative matters, unanimously decided to confirm two resolutions of the Superintendence of Insurance (SIS) and of the Board of Directors of the Central Bank of Paraguay (BCP) by which fines were applied to an insurance agent and a foreign insurance company, for carrying out insurance activities without the latter being authorized to operate in Paraguay.

This ruling constitutes an important precedent, since it would be one of the first cases in which a sanction is imposed on a foreign insurance company for insuring risks in Paraguay without being authorized by the SIS. Although Insurance Law No. 827/96 already established the sanction for operating without the proper authorization, in the past there were no known cases in which a fine or sanction had been imposed.

According to the ruling, the intermediation of the sanctioned insurance agent was demonstrated, among other things, by documents proving that she sent insurance proposals from a foreign insurance company that was not authorized to operate in the country, offering coverage from the latter to persons domiciled in Paraguay. In addition, according to the ruling, among the evidence presented by the SIS and the BCP were documents proving that persons domiciled in Paraguay had contracted insurance with a foreign insurance company not authorized to operate in the country.

Should you wish to receive further information regarding this news or other information related to our insurance practice, please do not hesitate to contact us.

This Thursday, the Chamber of Deputies (Lower House of Congress) must address the amendments introduced by the Senate (Upper House) to the bill that modifies the current Informconf Law.

In the midst of political tension between a group of dissident senators and the Executive Branch, the Senate had approved controversial amendments to the bill introduced and approved by the Chamber of Deputies. While the Deputies' version of the bill established the inclusion of positive credit information in credit reports, the Senate deleted this provision, rejecting the inclusion of positive information and including a limit of 3 minimum salaries (PYG 5,500,000*) to be able to report information on debts. This resulted in the concealment of the information, instead of addressing the problem with a solution.

If the Senate version of the bill passes, this would result in harm to the sector of the population it was intended to help in the first place, the working class consumer. The withholding of information will result in a greater number of rejected credit applications, longer periods of analysis, and higher interest rates, all as a result of a presumption of greater risk in granting credit due to the lack of available information.

In short, people will be forced to resort to “informal loans” with usurious rates, since 90% of the loans granted today are below the limit of 3 minimum wages and there would be no information about them.

On the other hand, the Deputies' version will allow for greater financial inclusion, as commercial and financial entities will now have more information (positive information) allowing them to put a person's financial behavior into context. For example, if a person has an unpaid phone bill of PYG 500,000, but has been paying this same bill on a regular basis for the past 12 months, or is paying a mortgage or vehicle loan, then the credit analyst will be able to more adequately assess the credit application and understand that the unpaid debt may be a consequence of an external factor, rather than unreliable payment behavior.

In addition, the inclusion of positive information will allow for faster and more complete analyses for the purchase of work tools, allowing the working class to start earning money quickly in order to pay off their debts. For example, one may be able to buy a motorcycle with a down payment of less than 5% and immediately start working as a delivery man to earn money.

As a result, both consumer associations and financial institutions have made public statements in favor of the Deputies' version.

Although the trend seems to be that the Chamber of Deputies will confirm its own version and reject the Senate's, the Chamber of Deputies still needs an absolute majority to do so. However, the public is confident that the Chamber of Deputies will follow the right path.  

*Exchange rate of PYG 5,200 to USD 1

The Ministry of Public Works and Communications (MOPC) has launched a public tender for the construction of the long-awaited overpass for Madame Lynch Avenue. This will facilitate access from the suburbs of Luque to the main city of Asunción, thus allowing the free flow of traffic of more than 20,000 vehicles per day. The MOPC estimates that more than 7,000 cars will enter Asunción through this new access, while at the same time another 14,000 will be able to cross over underneath.

This infrastructure project comprises the construction of 3 main axes. These are an overpass that allows access from Av. Aviadores del Chaco to the Silvio Petirossi Highway, an underpass that connects the two ends of Av. Madame Lynch and a traffic circle that allows possible changes of directions.

Completion of this construction project is estimated within 12 months of the start of construction.

Some of the requirements to participate in this bid are to have generated during the last 5 best years of the last 10 years, an average annual turnover of USD 60,000,000; in addition to having participated in at least 5 road construction projects in the last 10 years. Of these 5 road construction projects, at least one must be the construction of an overpass and one an underpass.

The Bidding Terms and Conditions have been issued and the process is currently in the clarification stage. The MOPC will receive requests for clarifications until June 15, 2015 and final bids are due on June 22, 2015.

If you would like to receive a copy of the Bidding Terms and Conditions or additional information, please do not hesitate to contact us at rgvouga@vouga.com.py and msalgueiro@vouga.com.py