In August of this year certain reforms to the main laws of the Nicaraguan financial system were approved: Law No. 1078 “Law Reforming Law No. 561 General Law of Banks, Non-Banking Financial Institutions and Financial Groups”, Law No. 1079 “Law Reforming Law No. 587 Capital Markets Law” and Law No. 1080 “Law Reforming Law No. 316 Law of the Superintendence of Banks and Other Financial Institutions”.
These regulations include modifications to the sanctions that may be applied to directors, managers, officers, employees and internal auditors for money laundering, financing of terrorism and financing the proliferation of weapons of mass destruction (ML/FT/FT/FP) and add other officials that may be sanctioned, such as the representative, chief executive and ML/FT/FP risk prevention manager. Penalties range from 20,000 fine units or 0.015% of the institution’s net worth up to 60,000 fine units or 0.150% of the institution’s net worth. One fine unit is equivalent to one US dollar.
The amendment to Law No. 316 of the Superintendency of Banks and Other Financial Institutions grants powers to the Board of Directors of such entity to approve general rules to ensure the lawful origin of the capital of financial institutions and to prevent money laundering, financing of terrorism and financing of the proliferation of weapons of mass destruction within the financial system under its supervision.
Also, the Central Bank of Nicaragua (“BCN”) approved Resolution BCN-XXXIX-1-21 “Payment Systems Oversight and Supervision Regulations”, the purpose of which is to establish the general guidelines for the oversight and supervision of payment systems, in order to promote their efficiency and security. This Regulation is applicable to: a) Payment system administrators; b) Financial technology providers of payment services; and c) Virtual asset service providers.
These companies will be monitored through the analysis of accounting, legal, economic, technological, financial, administrative, process and procedural information obtained by the NCB from the entities, based on the applicable provisions, in order to evaluate compliance with the rules that govern them, as well as their proper functioning. The entities are obliged to deliver to the NCB by the means indicated by the NCB -physically or electronically- the information and documentation established in the regulations, rules and provisions of the NCB and applicable laws. The NCB may also order the entities to carry out improvement actions, corrective measures or mandatory compliance programs, and in the event of noncompliance with any of the obligations, minor, moderate and serious violations are established, with penalties ranging from one unit of measurement up to five hundred and fifty units of measurement as a fine.