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Financial close involved 2 transactions: (i) the issuance of notes (144A / REG S  bonds) under New York law by an SPV, for which UBS A.G. participated as the structuring agent of the 15 years term notes that amounts to USD 430 million plus interests (interest rate ended up in 5.375%, despite the round has started at a price of 5.75%) and BONY acted as indenture trustee (issuance was a success with an oversubscription of 2,6); and (ii) a revolving syndicated loan for working capital in which local banks Banco Atlas S.A., Banco Regional, Sudameris Bank and Banco Nacional de Fomento, participated as lenders of the USD 50 Million short term credit facility and Finexpar as trustee for a local collateral trust.

For more information on the transaction please visit:
https://www.inframationnews.com/public/open/M3YwQzdSRjlFa3plb28wVGxzVndFV0k9.thtml

The Trademark Office of the National Direction of Intellectual Property (DINAPI) issued a communication and publication in local newspapers stating that it will no longer be possible to use certain terms that are Denomination of Origin (DO), pursuant to the Agreement of Strategic Association MERCOSUR-European Union.

Some of the DO have been deemed generic, so it is possible to continue to use them, provided that the user is registered as a “Prior User”, which means that the term should have been used before in terms and conditions specified in the Communication, namely:

1. Parmesano: having used the term prior to November 2017 in Argentina, Paraguay or Uruguay.

2. Parmesao: having used the term prior to November 2017 in Brazil.

3. Reggianito: having used the term continously for at least 5 years prior to November 2017 in Paraguay or Uruguay.

4. Reggianito: having used the term prior to November 2017 in Argentina

5. Fontina: having used the term continously for at least 5 years prior to November 2017 in Argentina, Brazil, Paraguay or Uruguay.

6. Gruyere/Gruyere: having used the term continously for at least 5 years prior to November 2017 in Argentina, Brazil, Paraguay or Uruguay.

7. Gruyerito/Gruyer: having used the term continously for at least 5 years prior to November 2017 in Uruguay.

8. Queso Manchego (Manchego Cheese) (maede with cow milk): having used the term continously for at least 5 years prior to November 2017 in Uruguay.

9. Grappameil/Grapamiel: having used the term prior to November 2017 in Uruguay.

10. Grana: having used the term continously for at least 5 years prior to November 2017 in Brazil.

11. Gorgonzola: having used the term prior to November 2017 in Brazil.

12. Steinhager: having used the term prior to November 2017 in Brazil.

13. Ginebra: having used the term continously for at least 5 years prior to November 2017 in Argentina.

14. Genebra: having used the term continously for at least 5 years prior to November 2017 in Brazil.

Please feel free to contact us in case these DO affect your trademarks and are interested in being added to the list of Prior Users of the Denominations of Origin to continue using them.

Kindly bear in mind that this declaration must be prepared and filed before Friday July 3, 2020.

Please contact us at law@berke.com.py for any clarification

Our compliments to the Executive Power for the issuance of Decree No. 3708 on June 15, 2020, whereby the Bill that modified a number of articles of Law 5033/2013, which establishes the mandatory requirement for public officials to submit sworn statements. The Decree rejected said Bill that, among other provisions, attempted to decriminalize the submission of false and incomplete sworn statements by public officials, based on principles of transparency, publicity, and fight against corruption.

Therefore, Law No. 6355/2019, which regulates said constitutional article, remains in force. Within the framework of said law, we have obtained precautionary measures for several private sector clients to suspend the effects of the referred law, regarding submission of sworn statements.

Law No. 6.542/2020 was recently enacted to regulate Factoring, Exchange Invoice and Electronic System of Guaranteed Operations (SEOG). Said Law will be effective on December 17, 2020. Regulation and definition of certain topics by the Central Bank of Paraguay and the Ministry of Finance are pending, as identified below.

This newsletter addresses each of the topics that form the purpose of the law, namely: (1) factoring; (2) exchange invoice and (3) SEOG.

1. Factoring

• What is Factoring?

Law defines factoring as a legal transaction in which a person (the assignor) transfers totally or partially, for sale or administration, to a third party (factor or assignee), the receivables arising from commercial activities or provision of services in exchange of a valuable consideration. This valuable consideration may be, for instance, a proportional discount on the sums advanced by the factor, a commission or a percentage calculated on the amount of the assigned receivables.

This newsletter addresses each of the topics that form the purpose of the law, namely: (1) factoring; (2) exchange invoice and (3) SEOG.

• Operations

In a factoring contract, the factor may:

a) Grant funds in advance on account of the receivables, object of the assignment, to the assignor.

b) Be assigned with a credit supported by an obligation to pay certain amount within a specified period, with or without discount.

c) Manage a portfolio of receivables.

d) Send a notice to the debtor of the receivables, object of the contract, to inform about the assignment or discount of the receivables.

e) Collect the assigned receivables, in his own name, or in the name of the assignor.

f) Protect or manage the protection of the assignor against default of the debtor.

g) Carry out operations with the receivables, object of the factoring contract.

h) Provide the assignor with services additional to the provision of liquid resources, in exchange for a global valuable consideration or to be agreed for each additional service. These services may consist of commercial research and information, accounting services, market research, comprehensive advice and others of a similar nature.

2. Exchange Invoice

• Concept

Law introduces the exchange invoice as a title payable to order. This title will be used for selling products or services for a specified term (under credit-sales modality) which may later be the subject of a factoring operation.

The interesting and innovative part is the fact that Law delegates the regulation of electronic exchange invoices as a credit title to the Ministry of Finance, which will further facilitate business flow.

• Elements or Requirements

Exchange invoice must meet the following:

a) The name «exchange invoice» must be inserted in the heading text

b) Place and date of issuance.

c) Due date of the payment obligation expressed as a fixed day.

d) Description of the charges.

e) Amount due, expressed in numbers and letters, currency and breakdown into gross sales or services amount, applicable VAT and clearly indicating the total net amount payable.

f) Name or company name, and Taxpayer ID (RUC) of Identity Card Number of the issuer.

g) Name or company name, and Taxpayer ID (RUC) of Identity Card Number of the debtor or person in whose name it is issued

h) Debtor’s domicile and place of payment.

The regulatory decree may establish other additional requirements to those mentioned above.

• Issuance, copy and acceptance

In order to get the acceptance of the debtor, the issuer of an exchange invoice must present the original invoice. Acceptance must appear on the invoice by means of the word «I accept» and the signature of the debtor, if a natural person, or its representative, if a legal person.

Once the exchange invoice has been accepted by the debtor, this must return it to the issuer and keep a copy.

In case the issuer delivers the exchange invoice to the debtor and this does not express the acceptance or rejection in the following 10 days, then the invoice will be considered as accepted and the issuer may, at the expiration date stated therein, bring enforcement proceedings against the debtor. In such case, the receipt of the invoice signed by the debtor will be considered an enforceable document.

• Endorsement

Once the exchange invoice has been accepted, the original invoice may be assigned by means of an endorsement to the order, with express identification of the endorsee, clarification of signature, ID number, if a natural person, or RUC, if a legal person.

The Ministry of Finance must define and regulate the form of registration and endorsement of electronic invoices.

• Enforceability

In order to make an exchange invoice enforceable, debtor’s signature must be recognized before courts or certified by a notary public

3. SEOG

• Creation

Law creates the SEOG to operate as an electronic database in which forms will be registered in order to report on ordinary credit assignments not contained in receivables and made under a factoring contract.

It would work as a public registry for declarative rather than representative purposes

• SEOG Administrator

The Central Bank of Paraguay will oversee the administration of the SEOG and the organization of the database contained by the same.

To this end, the Central Bank of Paraguay must approve a regulation with all necessary provisions for the effective operation of the SEOG

4. Conclusion

This law arrives on such a very suitable moment in which many companies, especially MSMEs, are seriously affected in their finances by the health crisis caused by the COVID-19 pandemic. Its mission is to facilitate liquidity, boost the economy and contribute to financial inclusion.

For more information, do not hesitate to contact:

Manuel Arias: manuel.arias@berke.com.py

Federico Valinotti: federico.valinotti@berke.com.py

Paola Sapienza: paola.sapienza@berke.com.py