By: Daniela Matus
Last April 4, Law No. 1113, Law of Amendments and Addition to the Law of Notaries and to the Code of Commerce, was published in La Gaceta, Official Gazette number 64 of April 4, 2022.
Pursuant to the explanatory memorandum contained in the bill presented on March 21, 2022, it is indicated that these reforms have been made in virtue of the efforts to comply with the recommendations of FATF, as the intergovernmental body in charge of providing guidelines and criteria for the prevention of ML / PF / FT, directly obliging Lawyers and Notaries to deepen the due diligence and identification of the companies to which they provide services.
The reformed content is mainly based on the following articles: regarding the Notary Law, Articles 1, 2, 14 and numeral 7 of Article 15 are reformed and numerals 15, 16, 17, 18, 19 and 20 are added to the same article. With respect to the Code of Commerce, Art. 121 is amended and added. Said amendments arise from the strengthening of measures for the prevention of money laundering, Financing of Terrorism and Financing of the proliferation of weapons of mass destruction.
The following reforms stand out from the amended text:
Regarding the reform of Art. 1, the obligation of foreign notaries recognized in Nicaragua to render a bond is abolished, a situation that in practice was not applied and that with this reform such provision is completely repealed. Additionally, it is established that foreign notaries, in case of leaving the country, must deposit their Protocols in the General Directorate of Registry and Control of Attorneys and Notaries Public of the Judiciary.
Regarding the amendment of Art. 2, the concept of “Notarial Public Faith” is incorporated and also the legal provision that notaries must comply with the laws and regulations on prevention of money laundering, detection and reporting of activities potentially related to Money Laundering, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction, complying with such regulations as obliged subjects and under the principles of Personal Responsibility and Confidentiality is elevated to the rank of Law.
Article 14 is amended by stating that the General Directorate of Registries and Control of Attorneys and Notaries of the Judicial Power is in charge of preparing, updating and safeguarding the Registry of Notaries authorized by the National Council of Administration and Judicial Career for the exercise of the notarial function.
In Art. 15, paragraphs 15 to 20 are added, containing mainly general obligations of prevention of ML/FT/FP that the Lawyer and Notary as an obliged subject must implement by virtue of the existing regulations.
Regarding the reform of the Code of Commerce, 2 paragraphs are added related to the obligation to present the Certificate of Final Beneficiary in transactions before public institutions, municipalities and judicial authorities.
This reform ratifies the elements of ML/FT/FP prevention in the full exercise of the notary function as an obliged subject and generates several obligations which are detailed below:
Comply with the plans of measures resulting from the acts of judicial inspection, disciplinary processes and supervisions in anti ML/FT/FP matters.
Incorporate a reasoned copy of the certificate of declaration and/or update of beneficial ownership of the commercial companies that appear before him or her to grant legal acts or businesses. Said copy will become part of the supporting documentation of the Beneficial Ownership Report issued to the DGCIP and part of the due diligence file.
Raise Professional Secrecy when necessary information must be provided to the National Council of Administration and Judicial Career when required and in addition to submit to the DGCIP the reports in due time and form as established by the regulations of LA/FT/FP.
Identify and update the basic information of the beneficial owner and make the declaration of the latter before the corresponding Registry.
Submit the Certificate of Declaration of Beneficial Ownership to public sector institutions and municipalities when applying for licenses, operating permits or when appearing as suppliers of the State in any type of bidding and/or contract.
To present the Certificate of Declaration of Beneficial Owner before the Judges and Courts, when the mercantile companies interpose any action, demands or requests in the Nicaraguan Courts.
The obligation to provide the Certificate of Beneficial Ownership before the institutions of the State and municipalities leaves aside the confidentiality offered by the Registry of Beneficial Ownership at the time.
The present reforms became effective as of the date of their publication in La Gaceta, Official Gazette.
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