On February 23, a total of 26 trade unions have submitted to the Ministry of Finance a joint petition, requesting the Ministry of Finance and/or the Registry of Legal Persons and Final Beneficiaries, the non-application or at least the application of the minimum fine corresponding to sanctions for formal breaches provided for in Laws No. 5896 and 6446/2019 and their regulations.

The position and request of the unions is based on the fact that the aforementioned legal regulations reach the border of unconstitutionality, granting a high level of discretion to the Administration at the time of considering the facts that may or may not give rise to the reduction or non-application of sanctions, so it could be legally admissible for multiple reasons, apart from its confiscatory nature.

However, the COVID-19 pandemic scenario and the sanitary measures (confinement and others) taken by the National Government to prevent the spread of this virus have created the ideal setup for all kinds of delays in processing and/or execution of these administrative processes, delays that are attributable to both the public and private sectors.

However, according to the document, these delays have a common denominator which is precisely a force majeure cause that protects the sanitary measures taken by the National Government, such as confinement, teleworking, home office, work by shifts, group or individual confinements, appointments to withdraw documents and finally an accumulation of situations that undoubtedly gave rise to alleged formal breaches due to communications made to the Registry of Legal Entities and Final Beneficiaries after the deadline and, which leave latent the possibility of applying the high fines provided by the Law for a scenario that we can call “normal”.

In addition, unions expressed that the situation given in 2020 and even today is “exceptional”, therefore, it requires a legal response of the same dimension, thus the Law itself refers to the application of sanctions to Law No. 125/91 which in Art. 185 item “b” gives the force majeure cause or fortuitous event sufficient merits to exclude a person from liability.

Thus, through the aforementioned petition, trade unions such as: Paraguayan Industrial Union (UIP), National Chamber of Commerce and Services of Paraguay (CNCSPy), Center of Importers of Paraguay (CIP), Chamber of Advertisers of Paraguay (CAP), Association of Christian Entrepreneurs (ADEC), Paraguayan Chamber of Supermarkets (CAPASU), Union of Production Guilds (UGP), Rural Association of Paraguay (ARP), Chamber of Entrepreneurs of Ciudad del Este and Alto Paraná; have requested the application of minimum fines for the case and even the non-application of fines due to force majeure in accordance with art. 185 item b of Law No. 125/91.

For more information, please contact:

Bruno Lafarja bruno.lafarja@berke.com.py

Mauro Mascareño mauro.mascareno@berke.com.py

Federico Valinotti federico.valinotti@berke.com.py