Resolution No. JB-2015-3495 of the Banking Board

Banking Board of Ecuador

RESOLUTION No. JB-2015-3495

THE BANKING BOARD

CONSIDERING:

THAT on July 9, 2014, the lawyer Carlos Díaz Guzmán filed a complaint before the Regional Intendancy of Guayaquil in his capacity as holder of Check No. 000047, for the value of USD 11,900.00, issued to his order by Mr. Humberto Pizarro, against the current account that the latter maintains at Banco Bolivariano S.A.; that he also indicated that on that date, the aforementioned bank, without any legal reason, under circumstances where it should have certified the aforementioned check, proceeded to stamp on the back of the document a seal with the legend "INVALID CERTIFICATION", despite having previously inserted a "CERTIFICATION"; that due to this fact, the obligation derived from ensuring and certifying the aforementioned sum was not fulfilled, thus denouncing the irregular conduct of Banco Bolivariano C.A. as it generates doubts in the bank's credibility and constitutes a mockery of the account holder's trust; and that for the reasons stated, he requested that the corresponding administrative and monetary sanction be imposed for contravening the instructions issued by the Superintendency of Banks;

THAT prior to a request for information and analysis of the bank's explanations, the Regional Intendancy of Guayaquil through Official Letter No. IRG-DAyEU-R-2014-910, of August 21, 2014, denied the complaint filed by lawyer Carlos Segundo Díaz Guzmán, based on what is established in articles 36 and 37 of the Check Law in force at the time the event subject of the complaint occurred, and on what is provided in article 2 of the General Regulation of the Check Law;

THAT through writings presented on September 4 and 26, 2014, lawyer Carlos Díaz Guzmán filed before the Banking Board an appeal for review against the administrative act contained in Official Letter No. IRG-DAyEU-V-R-2014-910, of August 21, 2014;

THAT the appellant bases his appeal on the fact that Banco Bolivariano C.A. unjustifiably refused to ensure and certify an obligation contained in Check 000047, for USD 11,900.00 drawn by Mr. Humberto Pizarro, an account holder of the bank, despite the existence of funds and without there being any reason to reject said check; that the lawyer Carlos Díaz Guzmán's employee, Mr. Francisco González, approached the bank with the original of the aforementioned check and with the appellant's ID card to CERTIFY the check as he had done on previous occasions; that after half an hour, they were informed that the check could not be certified and that the beneficiary of the check, i.e., lawyer Díaz Guzmán, had to go in person; that however, the bank had already stamped a seal with the text "CERTIFIED" on the back of the document; that furthermore, article 29 of the Check Law was infringed; that the bank's conduct caused him more than one problem, for which he filed the complaint before the Regional Intendancy of Guayaquil; that during the processing of his complaint, he insisted with the bank on his request to which he sent Mr. Francisco González on August 4, 2014, and the same bank employee attended to him, and that after the wait, they certified the check; that it is inadmissible that the bank had two different behaviors regarding a

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Banking Board of Ecuador

Resolution No. JB-2015-3495 Page No. 2

same fact, which has caused him discomfort; and, that for this reason he files an appeal for review in order to proceed to revoke the administrative resolution and declare the proposed complaint well-founded;

THAT this appeal is resolved in exercise of what is established in the First Transitional Provision of the Organic Code of Monetary and Financial Law, published in the Official Register Second Supplement No. 332, of September 12, 2014, whose text states that the resolutions contained in the Codification of Resolutions of the Superintendency of Banks and Insurance and the Banking Board, and the norms issued by the control bodies, will maintain their validity in all that does not oppose the Organic Code of Monetary and Financial Law, until the Monetary and Financial Policy and Regulation Board resolves what corresponds, according to the case; and, with the second paragraph of the Third Transitional Provision, which states that the Banking Board will continue to act until it resolves all complaints, appeals, and other administrative procedures that it was hearing on the date of entry into force of the same, within a period of one hundred and eighty days, extendable at the discretion of the Monetary and Financial Policy and Regulation Board;

THAT regarding the grounds presented by Mr. Carlos Díaz Guzmán, it must be considered that article 29 of the General Regulation of the Check Law, incorporated into chapter 3, title XXIV, book I of the Codification of Resolutions of the Superintendency of Banks and Insurance and the Banking Board, in force at the time the event subject of the complaint occurred, only authorizes the drawer or the beneficiary of the check to request that the drawee certify the check with the effects indicated by the Law; and, that for this same reason, the person who presented themselves at the bank, as admitted by the appellant himself, did not have the status of drawer or beneficiary of the check;

THAT in the case at hand, the bank informed the control body that the presentation of the check to obtain certification was done by a person who did not identify themselves as the drawer or as the beneficiary of the check; that while attending the certification request, simultaneously the bank managed to obtain some instruction from the drawee, without managing to make contact with him, for which reason the check was returned to the same person who presented it; that the bank states that it limited itself to taking the necessary precautions to certify a check, regarding which, in the event of certifying it, it would correspond to assume the payment obligation, as indeed article 35 of the Check Law applicable to the case disposes; that furthermore, the bank indicated that it did not know the reasons why the complainant, despite being the beneficiary of the check, has not presented it for collection or has not presented himself to request the certification of the check; and, that regarding this last point, according to the information provided by the appellant himself, the requested certification occurred on August 5, 2014, during the processing of the complaint before the control body;

THAT according to the technical report presented by the Regional Intendancy of Guayaquil, regarding this appeal, it can be appreciated that due to the amount of the check, which exceeded USD 10,000.00, it corresponded that, in accordance with the Manual of Policies regarding the Operation of Cash Services, the Operational Head confirm via telephone with the account owner or authorized signature, the

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Resolution No. JB-2015-3495 Page No. 3

certification of the check, which despite several attempts, the bank did not manage to do, which is the reason why it could not conclude the certification procedure;

THAT from the information contained in the file, it has not been possible to determine in accordance with the law that in the present case there was a transgression of the bank to the check regulations in force at the time the event subject of the complaint occurred, for which same reason, it was not appropriate to attend to Dr. Guzmán's request to impose the sanction requested on the bank;

THAT regarding the appellant's argument, under whose criterion positive administrative silence would have operated, it is worth clarifying that, as determined by article 28 of the Law on Modernization of the State, Privatizations and Provision of Services by the Private Initiative, for this effect, the certification of the competent official of the institution regarding the expiration of the legal term is required, a condition that is not met in the case subject of the present appeal;

In addition to what has been stated, it is worth noting that positive administrative silence is generated when the public administration, due to inertia or negligence, does not issue a resolution within the time assigned by law. In this case, the law creates a legal fiction that supplants the express will of the administration, when it confers a positive effect to that silence, determining that once this occurs, it is presumed that the claimant's pretensions have been favorably attended; however, there are several cases in which the positive effect of administrative silence cannot be generated, due to the very nature of the claimants' pretensions or the legal institutions involved in them; regarding this, the Contentious Administrative Chamber of the Supreme Court of Justice, in Resolutions Nos: 358 published in the Official Register No. 23 of February 17, 2003; and, 164-04, published in the Official Register 480 of December 13, 2004, establish that no right can be obtained by administrative silence, if the requested item, if approved expressly, would have been affected by absolute nullity; in this case, the petitioner seeks a sanction against the controlled entity; however, according to what is established in Art. 76 of the Constitution of the Republic, number 3, no one may be judged nor sanctioned for an act or omission that at the time of its commission was not typified in the law as a criminal, administrative, or other nature infraction; nor will a sanction not provided for by the Constitution or the law be applied to them; in the specific case, no administrative infraction of the controlled entity has been verified, therefore it is not appropriate to sanction it.

Complementarily, it is worth noting that the Constitutional Tribunal, in Process No. 660-99-RS of January 11, 2000, a case analogous to the one that is the subject of this resolution, states: "...That, consequently, it is not possible to give the quality of resolution to the fact of administrative silence, all the more so since, in the present case, it is not a simple complaint, request, or petition, as provided for in Article 28 of the Modernization Law, but a denunciation, whose treatment requires a serious analysis of the causes and circumstances surrounding the fact of the denunciation to adopt the most appropriate resolution to reality and the Law, which cannot be supplanted by the mere passage of time...";

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Banking Board of Ecuador

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THAT the National Legal Intendancy, through memorandum INJ-DNJ-SAL-2015-0007 of January 6, 2015, recommended to the Banking Board to reject the pretension contained in the appeal for review filed;

AND,

IN exercise of its legal attributes;

RESOLVES:

SINGLE ARTICLE.- REJECT the appeal for review filed by lawyer Carlos Segundo Díaz Guzmán against the administrative act contained in Official Letter No. IRG-DAyEU-V-R-2014-910, of August 21, 2014; and, IN CONSEQUENCE, ratify its content.

NOTIFY.- Given at the Superintendency of Banks, in Quito, Metropolitan District, on the twenty-fourth of June of two thousand fifteen.

[Signature] Econ. Rodrigo Landeta Parra GENERAL INTENDANT, S PRESIDENT OF THE BANKING BOARD, E

I CERTIFY.- Quito, Metropolitan District, on the twenty-fourth of June of two thousand fifteen.

[Signature] Lcdo. Pablo Cobo Luna SECRETARY OF THE BANKING BOARD