Norm on Minimum Information Required for Representation Offices of Foreign Banks and Financial Institutions

Resolution No. CD-SIBOIF-1148-2-ENE14-2020
Dated January 14, 2020

NORM ON MINIMUM INFORMATION REQUIRED FOR REPRESENTATION OFFICES OF FOREIGN BANKS AND FINANCIAL INSTITUTIONS

The Board of Directors of the Superintendence of Banks and Other Financial Institutions,

CONSIDERING

I
That Article 14 of Law 561, General Law of Banks, Non-Bank Financial Institutions and Financial Groups, published in La Gaceta, Official Gazette No. 232, of November 30, 2005, contained in Law No. 974, Law of the Nicaraguan Legal Digest on Banking and Finance Matters, published in La Gaceta, Official Gazette No. 164, of August 27, 2018, and its amendments (Law of the Legal Digest), provides that foreign banks and financial institutions may, with prior authorization from the Superintendent, establish representation offices in Nicaragua.

II
That the same Article 14 empowers the Board of Directors of the Superintendence to issue general norms to regulate the operation of said offices; and empowers the Superintendent to request information deemed necessary regarding these institutions.

In exercise of its powers,

HAS ISSUED

The following:

Resolution No. CD-SIBOIF-1148-2-ENE14-2020
NORM ON MINIMUM INFORMATION REQUIRED FOR REPRESENTATION OFFICES OF FOREIGN BANKS AND FINANCIAL INSTITUTIONS

CHAPTER I
OBJECT AND SCOPE

Article 1. Concepts.- For the purposes of this norm, the following shall be understood:
a) Superintendence Law: Law 316, Law of the Superintendence of Banks and Other Financial Institutions, published in La Gaceta, Official Gazette Number 196, of October 14, 1999, and its amendments; contained in Law No. 974, Law of the Nicaraguan Legal Digest on Banking and Finance Matters, published in La Gaceta, Official Gazette No. 164, of August 27, 2018, and its amendments. b) General Law of Banks: Law 561, General Law of Banks, Non-Bank Financial Institutions and Financial Groups, published in La Gaceta, Official Gazette No. 232, of November 30, 2005; contained in Law No. 974, Law of the Nicaraguan Legal Digest on Banking and Finance Matters, published in La Gaceta, Official Gazette No. 164, of August 27, 2018, and its amendments.

c) Gap Analysis Matrix: A tool that each supervised institution must strategically use, based on its own specificity in the industry to which it belongs, to identify the provisions of laws, regulations, guidelines, resolutions, or circulars regarding the prevention of risks related to money laundering or asset laundering, terrorist financing, and financing of the proliferation of weapons of mass destruction (ML/TF/FP) applicable to it, and to determine existing gaps compared to its own current policies, procedures, measures, and controls for the prevention of the aforementioned risks, allowing it to direct its resources and adopt and prioritize the necessary actions and measures to remedy them.

d) Representation Offices: Entities referred to in Article 14 of the General Law of Banks. e) ML/TF/FP Risks: Risks of money laundering or asset laundering, terrorist financing, and financing of the proliferation of weapons of mass destruction. f) Superintendence: Superintendence of Banks and Other Financial Institutions. g) Superintendent: Superintendent of Banks and Other Financial Institutions.

Article 2. Object and Scope.- The purpose of this norm is to establish the minimum information requirements that representation offices must maintain or submit to the Superintendent. Likewise, it aims to prevent money laundering or asset laundering, terrorist financing, and financing of the proliferation of weapons of mass destruction in these institutions.

CHAPTER II
MINIMUM INFORMATION REQUIREMENTS

Article 3. Minimum Information.- Representation offices must maintain, at a minimum, the following information:
a) Detail of the organizational structure of the institution, including the identification of its officials and employees and a description of their functions. b) Detailed report of the market segments or industries to which their credit and investment activities are oriented. c) Detail of all active operations carried out with natural or legal persons domiciled in the country. This detail must contain, at a minimum, the following information:

1) Credit Operations:
i. Name of the debtor, guarantor, or surety (for legal persons, detail the name of the company and the legal representative).

ii. Identification of the debtor in accordance with the regulations regarding the prevention of money laundering and terrorist financing issued by the Board of Directors of the Superintendence.
iii. Economic activity of the natural (or legal) person.
iv. Address.
v. Credit operation number.
vi. Portfolio type and modality of the credit operation.
vii. Currency type agreed upon for the credit operation and backing guarantees.
viii. Approved amount.
ix. Principal balance, interest (current and/or overdue), and commissions due.
x. Approval and maturity date of the credit operation.
xi. Purpose of the credit operation.
xii. Monthly disbursements.
xiii. Payment frequency for principal and interest.
xiv. Days of delinquency for principal and interest.
xv. Number of overdue installments.
xvi. Status of the credit operation and backing guarantee.
xvii. Indicate if it is a syndicated credit operation.
xviii. Type of guarantee.
xix. Description of the guarantee.
xx. Legal identification of the guarantee.
xxi. Book value of the guarantee.

2) Investment Operations:
i. Name of the issuer.
ii. Address.
iii. Type of operation.

iv. Amount invested.
v. Currency type.
vi. Investment date.
vii. Maturity date.

3) Information on deposit accounts maintained with banks or financial institutions in the country, containing at a minimum:
i. Account statements.
ii. Reconciliations.
iii. Documents supporting the operations.

d) Any other information that the Superintendent, based on its powers, deems necessary.

Article 4. Availability of Information.- Representation offices will permanently have available all information and supporting documentation referred to in the previous article and will supply it upon request by the Superintendent and/or competent national authority in accordance with the relevant law.

Article 5. Record Retention.- Representation offices must retain all information contained in the physical documentation referred to in Article 3 of this norm for a period of no less than five (5) years. Information contained in computer systems must be retained indefinitely.

Article 6. Information Update.- Representation offices must notify the Superintendent whenever there are changes in information such as: change of legal representative, address, telephone, postal box, and email.

Article 7. Information to the Superintendent.- Representation offices must submit to the Superintendent the information referred to in Article 3, subsection c), item 1), of this norm. This report is of monthly frequency and must be received by the Superintendence no later than the first 15 days of the month following the reported month.

Article 8. Compliance with laws and regulations on the prevention of money laundering or asset laundering, terrorist financing, and financing of the proliferation of weapons of mass destruction.- Representation offices must comply, in all applicable aspects, with the provisions established in the legislation, its regulations, and the regulations governing the prevention of ML/TF/FP risks. To this end, they must carry out their respective gap analysis matrix, individual evaluations of their particular ML/TF/FP risks, and adjust their prevention program for these risks in accordance with the identified higher and lower ML/TF/FP risks.

Article 9. Public Disclosure.- Representation offices must ensure that any information they disseminate to the public (signs, advertisements, documentation, publicity, propaganda, among others) does not induce errors or confusion regarding the nature and activities for which they were authorized.
To this effect, as a minimum, the name of the representation office must be identified as follows: “Representation Office of the Bank __________”.
Likewise, they must include in their propaganda, publicity, promotion, and any other information made available to the public, the following message: “This Representation Office of the Bank _____, is not authorized to collect deposits in the country”.

CHAPTER III
FINAL PROVISIONS

Article 10. Transitional Provision.- Registered representation offices operating upon the entry into force of this norm will have a period of no more than ninety (90) calendar days to comply with the provisions of this norm.

Article 11. Repeal.- The Norm on Minimum Information Required for Representation Offices of Foreign Banks and Financial Institutions, contained in Resolution CD-SIBOIF-448-1-OCTU24-2006, of October 24, 2006, published in La Gaceta, Official Gazette No. 227 of November 22, 2006, is hereby repealed.

Article 12. Effectiveness.- This norm shall enter into force upon its notification, without prejudice to its subsequent publication in La Gaceta, Official Gazette. (F) Ovidio Reyes R. (F) Illegible (Luis Ángel Montenegro E) (F) Fausto Reyes (F) Illegible (Silvio Moisés Casco Marenco) (F) Illegible (Rafael Ángel Avellán Rivas).

RAFAEL ÁNGEL AVELLÁN RIVAS
Secretary of the Board of Directors SIBOIF