Maintaining a healthy financial system at the country level represents an attraction for all investors.

Nicaragua as a member of the Latin American Financial Action Task Force (GAFILAT) It is in the duty of updating and maintaining international standards on anti-money laundering and terrorist financing.

Consequently, Nicaragua, on July 20, 2018, begins the day with an update of the laws that will be regulating the Matter of Prevention of Asset Laundering, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction. (LA/FT/FP), being these:

  • Law No. 976 (Financial Analysis Unit Law).
  • Law No. 977 (Law against Money Laundering, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction).

After the approval of the aforementioned Laws, on October 3, the Gazette published the Decrees No. 14-2018 and 15-2018, which correspond to the Regulations that will be regulating the application of each Law.

These laws come to protect and strengthen the country's financial system, being at the forefront of natural or legal persons who wish to enter money from an illegal source into the financial system in order to use it for their own benefit or finance illegal acts in others. countries.

It should be noted that both Laws are complementary in the Matter on which this Article deals.

In Law 976 and its Regulations, the following novelties stand out:

What should be considered as a suspicious transaction is defined, which according to Article 2 of the Law is: “Any act, operation or transaction, isolated, repeated, simultaneous or serial, regardless of the amount thereof, carried out or attempted by any natural or legal person, who, according to current regulations, the uses or customs of the activity in question, is unusual or lacks apparent economic or legal justification.

It is fair and necessary that accounting experts support maintaining a healthy financial system, which is why the College of Public Accountants of Nicaragua is empowered to create a Body that centralizes information on operations or unusual situations identified by the Obligated Subjects that are are under their jurisdiction. Art 10 of the law.

Non-profit organizations (NGOs) represent great social support for any country, however there are people who want to use these channels for objectives that are not for social benefit but rather the opposite. It is therefore that according to Art. 5, Non-Profit Organizations are already beginning to be mentioned in Matters of Prevention of LA/FT/FP.

Obliged subjects play a transcendental role for a healthy financial system in every country, which is why the State requests such support in an exhaustive manner. There are always those who fail to see the importance of this issue for investment generation, which is why the law provides for the temporary suspension of the operations of a Regulated Entity or its definitive closure that does not wish to collaborate with said mission. Art 17 of the law.

For its part, the Regulation of the Law (Decree no. 14-2018) authorizes the UAF (Financial Analysis Unit) to establish the necessary mechanisms and processes in order to directly access, safely and protected, the information registered in the databases of certain Public Institutions. This is in accordance with the provisions of Article 5 of the Law.

Another novel aspect of the Regulation is the issuance of Certificates that certify that the Obliged Subject is registered in the Registry maintained by the Institution. Said regulation is found in Article 17 of the Regulations.

Article 20 of the Regulation establishes that the UAF may carry out evaluations by sector of Reporting Entities, taking the following parameters as parameters:

  • Factors related to the clients of the Obliged Subject.
  • Geographic presence.
  • Products, services and their distribution channels.

In Law 977 and its Regulations, the following novelties stand out:

Article 14 of Law 977 defines Non-Profit Organizations as: “Legal persons that are involved in the collection or disbursement of funds for the realization of humanitarian, religious, cultural, educational, social or fraternal purposes, or for performing other kinds of good works.”

In accordance with the above, Arts. 37 and 38 of the Law and Arts. 13, 14 and 15 of Decree no. 15-2018, establish the regulations and duties that Non-Profit Organizations must comply with, in order to prevent Money Laundering / Financing of Terrorism / Financing of the Proliferation of Weapons of Mass Destruction.

In order to strengthen the mission of the UAF, the AML/CFT/CFP National Commission is created. This commission is the coordinated group of competent Authorities in the Matter of LA/TF/FP. Said creation rests in articles 5 and 6 of the Law.

In comparison with what was previously established in Art. 9 of the repealed Law 793, with respect to natural or legal persons known as "Obligated Subjects", Law 977, in its Art. 9, expands this list of Obligated Subjects within the following regulated sectors:

  1. Financial Institutions supervised by the Superintendency of Banks and Other Financial Institutions.
  2. Entities supervised by the National Microfinance Commission.
  • Entities supervised by the Financial Analysis Unit for LA/FT/FP Prevention.
  1. Certified Public Accountants, registered in the College of Public Accountants of Nicaragua.
  2. Any other natural or legal person that, in accordance with the aforementioned Law, is designated as the Obligated Subject or by the specific Law that creates it.

We recommend carrying out a brief reading of the previously mentioned article in order to check if your company is within the sectors regulated by Law 977.

An innovative regulation of this law is to establish that Mercantile Companies must not issue Bearer Share Certificates; and those that have already issued this type of bearer security will have a term of 12 months to convert said Shares to registered shares. This conversion must be registered in the Public Mercantile Registry corresponding to the domicile of the Company. Said provision rests in art. 46 of the law.

We believe that maintaining a healthy financial system is promoting the long-term economic and social progress of a country, since it allows the development of productive sectors, construction, technology, industries and job creation.

For more information, you can contact LatinAlliance Nicaragua, Lawyers and Notaries, to the following email address: avega@latinalliance.co