Publications

PM Legal News – July 2026

External Circular 100-000020 of 2026

On July 2, 2026, the Superintendency of Corporations issued External Circular 100-000020, which adopts a new Basic Legal Circular and comprehensively amends the regulatory framework applicable to the prevention of:

Money laundering (LA)
Terrorism financing (FT)
Financing of the proliferation of weapons of mass destruction (FP)
Corruption and transnational bribery (C/ST)

Repeal of Previous Regulations

The new circular repeals and replaces the following External Circulars:

100-000016 of 2020 (SAGRILAFT – Chapter X)
100-000011 of 2021 (PTEE – Chapter XIII)

Important Changes

SAGRILAFT and PTEE are consolidated into a single instrument titled: “LA/FT/FP and C/ST Self-Regulation and Risk Management System,” contained in Chapter IX of the new Basic Legal Circular.

The term “obligated company” is changed to “obligated entity.”
The acronym FPADM (Financing of the Proliferation of Weapons of Mass Destruction) is simplified to FP.
With regard to the financial thresholds that determine the system’s scope of application, the Current Legal Monthly Minimum Wage (SMLMV) will no longer be used as the reference unit; instead, Basic Value Units (UVB) are adopted.
The Colombian Confederation of Chambers of Commerce (CONFECÁMARAS) is included as an obligated entity.
Under the Minimum Measures Regime, several sectors that were not previously covered are also incorporated:
- The pharmaceutical sector (ISIC 2011 codes 2100, 3250, 4645)
- The manufacturing sector
- The mining and energy sector
- The vehicle trade sector (ISIC codes 4511, 4512, G4541), which is also subject to the full system when it exceeds the respective threshold
- Monitoring: Minimum frequency of once per year for high-risk counterparties. Minimum frequency of once every two years for medium- or low-risk counterparties.
Regarding transparency and business ethics, mandatory policies must be established, such as those covering: the delivery and offering of gifts or benefits to third parties, political contributions, donations, travel and lodging expenses, and the filing and preservation of documents.
The appointment of a deputy compliance officer is required; this individual must meet the same qualifications and requirements established for the principal compliance officer.
Compliance officers must demonstrate and update their knowledge of ML/TF/FP and C/ST risk management at least once every three (3) years, in addition to demonstrating a minimum of one (1) year of professional experience in positions related to regulatory compliance in ML/TF/FP and C/ST risk management activities. Training is validated through formal education programs—specializations or master’s degrees—or through informal education programs, that is, “certificate programs provided they have a minimum duration of ninety (90) hours” with a direct and specific relationship to the subject matter.

Differences from the Previous Regulation

Previously: two parallel systems (SAGRILAFT – Chapter X / PTEE – Chapter XIII).

Problem: duplication of obligations, bodies, and reporting requirements.
Now: a comprehensive approach that manages all risks jointly.

Transition Period and Recommendations

Regulated entities must make the required adjustments to the new system by May 31, 2027.
During the transition period, the current systems will remain valid.

Peña Mancero Abogados offers support in the integration of systems and implementation of the necessary adjustments to ensure compliance with the new obligations within the established deadline.

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Public Works for Taxes in Bogotá: An Opportunity to Turn Your Tax Burden into Tangible Impact

Companies seeking to maximize the value of their social investment and strengthen their relationships with communities now have an innovative alternative for fulfilling part of their tax obligations: the “Works for Taxes” (Obras por Impuestos) program.

“Works for Taxes” is an alternative mechanism through which companies can pay a portion of their taxes in Colombia by carrying out projects that help reduce socioeconomic disparities. This mechanism does not reduce companies’ tax burden, but it can generate specific benefits.

In Bogotá, the “Works for Taxes” program can facilitate the creation of partnerships between companies, local communities, and the District. Furthermore, it allows for a more efficient and transparent use of tax revenues, as these funds are channeled toward specific public works projects. In this way, companies’ tax contributions become more visible and tangible.

At our firm, we assist domestic and international companies in structuring, feasibility studies, negotiation, and execution of projects under this scheme, helping them manage the legal, regulatory, and contractual risks that arise throughout the process.

What Are “Works for Taxes”?

The “Works for Taxes” program is a mechanism that allows individuals and legal entities to allocate a portion of their taxes to the financing and implementation of projects that contribute to social development and the closing of socioeconomic gaps.

Although this mechanism does not reduce the tax burden, it does allow the funds that a company is required to pay to be channeled into specific projects that are visible to the beneficiary communities.

In Bogotá, this program has become particularly significant due to its ability to coordinate efforts among the private sector, communities, and district agencies to promote projects with high social impact.

Key Considerations for Companies

Companies interested in participating should keep in mind that:

The projects are funded with private resources contributed by taxpayers.
The taxpayer assumes full responsibility for implementation.
Regulatory supervision is required.
Cost overruns are not reimbursed.
The project must address the District’s needs and interests.
The taxpayer may enter into contracts under its own contracting regime.

These characteristics make adequate legal, tax, and contractual planning essential from the project’s initial stages.

How does the process work?

A company’s participation in the mechanism involves several stages:

Identification of the project, whether it is an existing initiative or a proposal from the taxpayer.
Project structuring, including the definition of scope, costs, risks, and timeline.
Management of the feasibility study with the relevant district authority.
Approval and allocation of the quota by the relevant authority.
Formalization of the contract and project execution.

Each of these stages requires careful legal analysis to ensure compliance with regulatory requirements and minimize contingencies during implementation.

Two ways to participate

Trust (Fiducia) Option

Under this option, the company deposits a portion of the tax it was required to pay into a separate trust fund and receives a certificate that it may use at a later date.

Agreement (Convenio) Option

Under this program, the taxpayer enters into an agreement with a district government agency, carries out the project using their own funds, and receives, in return, District Territorial Renewal Certificates (TRTD), which they may later use to pay district taxes (property tax, vehicle tax, and ICA).

Current Opportunities in Bogotá

The District Secretariat for Social Integration (SDIS) currently has a portfolio of six projects spread across twenty neighborhoods in Bogotá. These projects focus on two main areas: providing social services to vulnerable populations and adapting infrastructure to be inclusive for people with disabilities.

These initiatives represent an opportunity for companies that want to make a measurable social impact while actively participating in the city’s development.

How can we help?

Our firm provides comprehensive advisory services to companies at every stage of Works-for-Taxes projects, including:

Eligibility analysis and participation strategy.
Legal and contractual structuring of the project.
Regulatory due diligence.
Negotiation of agreements and implementation contracts.
Risk management and regulatory compliance.
Support during project execution and supervision.
Dispute resolution and claims handling.

The “Works for Taxes” program is much more than a tax mechanism. When properly structured, it can become a strategic tool to strengthen your company’s social impact, build reputational value, and contribute directly to Bogotá’s development.If your organization is considering participating in this program, our team can guide you from the planning stage through to the successful execution of the project.

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The implementation of the open finance system in Colombia: transition towards an open data ecosystem

By Daniel Peña Valenzuela, Partner at Peña Mancero Abogados

Introduction

Decree 368 of 2026 introduced in Colombia the Mandatory Open Finance System, conceived as an institutional and technological transformation mechanism within the financial sector. This system constitutes the first step towards a broader model of data exchange, aimed at fostering innovation, competition, and financial inclusion. The main challenges lie in: (i) achieving a gradual implementation that ensures technical interoperability, (ii) safeguarding financial consumer protection, and (iii) preserving prudential stability, while building a trust-based ecosystem around data as a public resource.

1. Building the Open Finance System

The system is based on a hybrid model of mandatory and voluntary participation, accompanied by differentiated timelines according to the category of data. The implementation sequence foresees an initial six‑month phase for the definition of technical standards, followed by a twelve‑month period for the establishment of the Participants’ Directory and monitoring indicators. Effective access to information will be enforceable twelve months after the issuance of each standard, allowing entities to develop technical and operational capacities before assuming the obligations provided. The model will be mandatory for entities supervised by the Financial Superintendence, which must share information under the express authorization of clients. This scheme relies on a data governance system based on informed consent, an interoperable infrastructure supported by application programming interfaces, and periodic supervisory mechanisms. The creation of a Participants’ Directory and quarterly monitoring indicators seeks to ensure that the incorporation of new actors occurs without redesigning the system. Implementation also requires companies to strengthen their management of digital payments, insofar as open finance represents the next stage of sectoral development. The inclusion of the financial sector from the design phase reflects the intention to avoid regulatory lag and to adapt the system to the specificities of each subsector, such as cooperatives or insurers. In this context, any citizen will be able to authorize in seconds the use of their information to access better credit, insurance, or investment products, without physical procedures or additional certificates.

2. The Transition towards Open Data

Beyond open finance, the ultimate objective is to move towards an Open Data model involving heterogeneous sectors such as telecommunications, health, public services, and tax databases. Coordination among actors with different levels of digitalization and supervisory frameworks constitutes one of the main regulatory challenges. Building trust in information exchange becomes indispensable, especially regarding the progressive incorporation of non‑supervised providers such as fintech and insurtech, whose participation must avoid regulatory arbitrage. The balance between prudential stability and competitive openness requires a reinterpretation of regulation as a driver of innovation, beyond its traditional risk‑limiting function. The true purpose of the system demands the consolidation of an Open Data ecosystem integrating the financial, insurance, solidarity, and other sectors. This ecosystem must generate real value for citizens, facilitating access to credit, insurance, and investment products under more favorable and transparent conditions. In particular, the aim is to expand credit coverage, which remains low—between 35% and 40% of the adult population—highlighting the need to deepen financial inclusion in the country.

Conclusions

The Open Finance System represents a milestone in Colombian public policy, establishing the foundations for a model of information exchange that seeks to democratize access to financial services and promote innovation. Its gradual implementation and interoperable technical design are significant advances, but success will depend on institutional capacity to manage the transition towards Open Data. Trust‑building, intersectoral coordination, and consumer protection are necessary conditions for the system to fulfill its purpose of inclusion and competition. Ultimately, the challenge is not only regulatory or technological, but cultural: recognizing data as a public good and a driver of sustainable development. Information openness must be understood as a public policy tool which, far from being an end in itself, is oriented towards transforming the relationship between citizens and the financial system, expanding access opportunities and strengthening transparency in the digital economy.

Newsletter Jun 2026

Decree 0545 of 2026, Issued May 29, 2026

“Whereby guidelines for the environmental planning of the Bogotá Savanna are established”

The National Government issued Decree 0545 of 2026 for the purpose of establishing guidelines for the environmental planning of the Bogotá Savanna, pursuant to the mandate set forth in Article 61 of Law 99 of 1993, which recognizes this region as an area of national ecological interest.

These guidelines constitute binding environmental planning criteria and rules of superior legal hierarchy that must be incorporated by territorial entities and considered by environmental authorities in the exercise of their respective powers.

The Decree applies to Bogotá D.C., the municipalities that comprise the Bogotá Savanna, and the authorities and entities responsible for territorial planning and land-use management.

The Bogotá Savanna encompasses 31 municipalities. The Decree applies in its entirety to: Cajicá, Chía, Cota, Funza, Gachancipá, Madrid, Mosquera, Nemocón, Sopó, Tabio, Tenjo, and Tocancipá.

It also applies partially to: Bogotá, Bojacá, Chipaque, Chocontá, Cogua, El Rosal, Cucunubá, Facatativá, Guasca, Guatavita, La Calera, Sesquilé, Sibaté, Soacha, Subachoque, Suesca, Tausa, Villapinzón, and Zipaquirá.

The Decree organizes its guidelines into five strategic components:

Biodiversity conservation and climate change adaptation: promotes ecological connectivity, ecosystem restoration, and the protection of strategic areas.
Integrated water resources management: strengthens the protection of aquifers, recharge areas, and surface and groundwater sources, prioritizing regional water security.
Soil protection and conservation: establishes environmental criteria for urban expansion processes, preventing the degradation of land with high ecological and agricultural value.
Sustainable infrastructure and green cities: requires new infrastructure projects to incorporate environmental criteria from the earliest stages of project planning, promoting sustainable mobility systems and nature-based solutions.
Governance, information, and ancestral knowledge: incorporates mechanisms for interinstitutional coordination, open access to environmental information, and recognition of the traditional knowledge of Indigenous communities, particularly the Muisca people.

Key issues

The Decree requires the updating of environmental mapping and watercourse buffer zones within specified timeframes.
It promotes the ecological restoration of degraded areas and the protection of strategic ecosystems such as wetlands, Andean forests, and páramos.
The Decree establishes a transition regime and clarifies that it does not alter vested legal rights or previously adopted planning instruments.

The environmental planning criteria must be incorporated into POTs and other planning instruments within twelve (12) months of the Decree’s effective date, beginning on May 29, 2026. During this period, priority will be given to environmental mapping, zoning, and the corresponding regulatory adjustments.

The Decree does not automatically modify projects that are covered by final administrative acts or environmental permits issued prior to its effective date, provided that such projects are carried out in accordance with the conditions established therein. However, these projects must assess related environmental risks and, where required by the competent authorities, adopt additional mitigation or compensation measures.

The municipalities identified in the Decree may face significant constraints on their autonomy to determine land use and guide their own development under the framework established by the Decree.

Property owners may face restrictions on land use and on the development of new urban projects within protected areas. Although ownership rights remain intact, owners may not freely develop, subdivide, construct on, exploit, or alter the use of their land when it is subject to environmental planning criteria. This is because the guidelines established by the Decree constitute binding criteria and rules for territorial and environmental planning and are considered rules of superior legal hierarchy within their respective spheres of competence.

The importance of protecting the Bogotá Savanna, its ecosystems, and its communities is beyond dispute. The legal issue, however, is whether the Decree maintains the constitutional balance between environmental protection of national significance and municipal autonomy.

The Constitution requires these two principles to coexist harmoniously. Therefore, the debate is not about the State’s authority to intervene, but rather whether certain provisions of the Decree exceed that authority and, in practice, displace decisions that the Constitution reserves to municipalities. This issue will likely be adjudicated by the courts, whose interpretation will ultimately define the boundaries between environmental powers and municipal autonomy.

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External Publications

Contracts for Difference (CFDs): an opportunity for the energy sector

By Gabriela Mancero for the Minas Petróleos & Energía Bar Association

In the Colombian context, Contracts for Difference (CFDs) can be a key tool for encouraging investment in renewable energy and stabilizing electricity prices.

Regulation of CFDs in Colombia

In financial terms, a Contract for Difference (CFD) is a financial derivatives contract. It can be entered into on a number of different products. The largest markets for CFD financial products are currency and interest rate swaps. In derivative contracts, the actual asset, in financial terms, the underlying asset, is not traded. The transaction is purely financial. In CFD contracts, an agreement is established between two parties to exchange payments based on the price of an underlying asset.

The Banco de la República de Colombia is the regulatory authority for foreign exchange matters. As such, it is responsible for supervising the Colombian cross-border derivatives market and the local derivatives market related to foreign exchange transactions. CFDs are generally defined as derivative products that allow investors to take a position on changes in the value of an underlying asset.

In Colombia, CFDs are atypical contracts, not regulated by law. Despite this nature, the Banco de la República has classified CFDs by interpretation as financial derivatives. Investments can be made with both local and foreign agents authorized as so-called authorized foreign agents or online dealers or market makers, as permitted by local regulations.

Foreign agents authorized to carry out derivative transactions with Colombian residents are those non-domiciled entities that have carried out such transactions in the immediately preceding year for a nominal value exceeding USD 1,000,000,000. Despite this requirement, Colombian residents, and not a government entity in Colombia, are responsible for properly assessing compliance with this requirement by foreign agents.

In derivative contracts, the actual asset, in financial terms: the underlying asset, is not traded. The transaction is purely financial.

In Colombia, CFDs can be used to provide stable long-term prices for renewable energy producers, protecting them from the volatility of the electricity market. These contracts allow producers to sell their energy at an agreed fixed price, while the State or a regulatory entity assumes the risk of market fluctuations. It is the movements in the price of the underlying asset that trigger payments between the parties to the contract without the actual asset changing hands, i.e., without physical delivery or transfer of ownership of the electricity. These transactions are carried out on margin, which involves the periodic delivery of money to the agent so that they can continue trading. CFDs can also be used to protect consumers from high electricity prices.

Here are some international examples of the successful use of CFDs in renewable energy:

The United Kingdom has been a pioneer in the implementation of CFDs for renewable energy. In the latest round of auctions in 2017, two offshore wind projects were awarded CFD contracts at £57.50/MWh (€64.10/MWh), representing a 50% reduction in the costs of contracts awarded 30 months earlier.
The European Commission has proposed a reform of the electricity market that includes the implementation of bidirectional CFDs for new renewable electricity projects and nuclear power plants. These contracts allow the state to compensate the producer if market prices fall below an agreed threshold and to capture the excess revenue if prices exceed that threshold.
In Spain, CFDs are used as part of renewable energy auctions to ensure stable long-term prices for renewable energy producers. These contracts are awarded through competitive auctions, where producers bid the lowest price at which they are willing to sell their energy. These examples show how CFDs are increasingly seen as the preferred method for incentivizing investment in low-carbon projects and new technologies, leading to a two-way CFD model being the recommended market mechanism for contracts to be signed in the Colombia Offshore Wind Round led by the National Hydrocarbons Agency (ANH).

When designing CFDs, regulators typically pursue two broad objectives: first, to incentivize investment in renewables in line with the policy objectives of their development plans, and second, to integrate renewables into energy markets with as little distortion as possible. At the same time, the development of the energy system must follow the principles of security of supply and cost minimization. Contracts for Difference can play a crucial role in Colombia’s energy transition by providing price stability and encouraging investment in renewable energy. With an appropriate legal framework and transparent procedures, CFDs can help Colombia achieve its sustainability and energy security goals.

Crypto-asset regulation in colombia: recent trends

Por: Daniel Peña Valenzuela

The regulation on crypto-assets is a relevant index to determine the digital business climate in a country. Like any emerging technology, its early adoption in a market and adequate regulation can be an important step in the digital transformation processes in companies, the government and support digital entrepreneurship. The efficiency and data decentralization of blockchain and cryptocurrencies generate disruptive effects in certain markets and may also create concern about eventual illegal activities deriving from the technology’s relative anonymity.

In Colombia, several public entities have issued regulation and opinions on crypto-assets. This is precisely the first trend that we want to highlight. In Colombia there is a diversity of public entities that have touched upon different legal issues related to crypto-assets, namely: financial, exchange, tax, commercial, compliance and contractual issues, among others.

The following is a list with the main existing regulation and opinions:

(a) Financial Superintendence, Chapter XVIII External Circular Letter No. 041 of 2015;

(b) Decree 2555 of 2010.

(c) Regulatory Decree 1068 of 2015 (article 2.17.2.4.1.1);

(d) External Resolution No. 8 of May 5, 2000;

(e) External Resolution No. 1 of May 25, 2018;

(f) External Circular Letter No. DODM-144 of September 14, 2018;

(g) External Circular Letter No. DECIP-83 of August 27, 2021;

(h) Central Bank Opinion No. JDS-03409 of February 16, 2011;

(i) Central Bank Opinion No. JDS-19704 of September 12, 2016;

(j) Central Bank Opinion No. C19-110904 of June 21, 2019;

(k) Central Bank Opinion No. C21-70969 Q21-4417 of December 9, 2021;

(l) Financial Superintendence Opinion No. 2020079520-001 of May 15, 2020.

This is an effect of the transversal use of crypto-assets in different economic sectors and for different activities. However, if greater legal certainty is sought, the government could adopt a public policy document defining the vision and direction of the relationship between the public and the private sectors in relation to these digital assets.

In general, the Colombian authorities agree on the following characteristics related to crypto-assets as a basis for their regulation in each legal field and to determine the risks of the crypto title-holders who trade these intangible assets:

Crypto-assets are not currency, as the only monetary and account unit that constitutes a legal tender and means of payment with unlimited release power, is the Colombian peso issued by the Central Bank of Colombia (bills and coins);
Crypto-assets are not money for legal purposes;
Crypto-assets are not a currency, since it has not been recognized as a currency by any international monetary authority nor is it supported by central banks;
Crypto-assets are not cash or cash equivalent;
There is no obligation to receive crypto-assets as a means of payment;
Crypto-assets are not financial assets or investment property in accounting terms;
Crypto-assets are not securities, so their mention as such or assimilation should be avoided.

The above characteristics have been consistently upheld by different Colombian government documents and denote an interpretation of intangibles that is always based on traditional notions of assets.

Crypto-assets have been defined in Colombia as intangible assets and therefore are likely to be contributed to the capital of corporations, provided that (i) they comply with accounting laws and secondary rules and legal regulations; and (ii) that the partners approve their appraisal. Based on these arguments, the Colombian government expressly affirmed a change in its doctrine, confirming that shareholders can contribute crypto-assets in the form of a contribution in kind. The foregoing, subject to a series of requirements and recommendations, opens the possibility of incorporating crypto-assets as part of the incorporation of companies in Colombia.

Colombian residents who have crypto-assets as part of their assets must declare them in their annual income tax returns. The value for which they must be declared will be for their equity value, either as an intangible asset (investment) or inventory.

On the accounting side, it is recommended that a separate unit of account be created for the recognition, measurement and disclosure of transactions and other events or occurrences that are related to cryptocurrencies, which could well be called “crypto-assets” or “virtual assets”.

If the crypto-assets are traded in a foreign currency, the value of the assets in foreign currency is estimated in national currency at the time of their initial recognition at the official exchange rate, less credits or payments measured at the same official exchange rate of the initial recognition.

Colombian residents who have equipment, resources and work that are integrated into the crypto mining activity, allowing them to obtain virtual currencies in exchange for the services provided in the network and/or by way of commissions, receive taxable income in Colombia, by virtue of the aforementioned criteria. Likewise, it is clear that resident individuals and national companies are taxed not only on their income from a national source but also from a foreign source income and on their assets owned in the country and abroad. From the equity point of view, as long as these coins correspond to intangible assets, capable of being valued, they form part of the equity and can lead to the obtaining of (presumptive) income.

For instance, the purchase and sale of real estate with payment through crypto-assets is an exchange of an asset whose payment will be made through the delivery of an intangible asset. The tax obligations associated with income tax will be those derived from the execution of the exchange contract. Carrying out the exchange will affect the assets of the party delivering the crypto-asset; the payment of the price will generate an equity decrease due to its disposal. On the other hand, depending on the real estate valuation, seller may increase its assets by carrying out the respective exchange, or equate the equity value of the crypto-asset delivered. Consequently, the party delivering the crypto-asset must determine the equity value of said asset, and analyze whether, on the occasion of the exchange, an income for the difference between the tax cost of the asset and the value of its disposal was obtained. The payment of the property through crypto-assets may represent an increase in equity in the head of the property seller if the equity value of the crypto-asset is higher than that of the real estate. The capital increase must be reported in that party’s accounting and income tax return. To the same extent, the real estate seller must determine the equity value of said property, and verify if, on the occasion of the exchange, an income for the difference between the fiscal cost of the real estate and the value of the sale was obtained. The parties must comply with the provisions of the Colombian Tax Statute for the purpose of determining the minimum prices for the sale of the goods subject to the exchange.

As in other jurisdictions, Colombia is no exception for crypto-assets being used in criminal activities. Cases of criminal use, fraud and the use of crypto-assets for payments related to computer attacks and ransomware as well as for payments related to extortion are becoming more frequent. Crypto-assets can also be used as instruments for money laundering, terrorist financing and other criminal activities, in view of which the administrators of the companies that participate in the crypto-asset market must deploy: i) the maximum due diligence in the knowledge of the ends of the operation (including associates, employees, clients, contractors and suppliers, and their final beneficiaries), in regards to the prevention of ML/TF; and, ii) the diligence that a businessman in good faith would take into account to prevent the phenomenon of asset laundering or money from the public being illegally collected or any other damage to the public or private interest being generated through such company. Those who carry out operations with crypto-assets decide in a responsible, conscious and autonomous manner, at their own expense and risk, to assume the possible losses that could be derived from this type of transaction.

The difficulty of clearly defining crypto-assets has been used by criminals to deceive investors and to carry out illegal collection of funds and Ponzi schemes with business models and strategies that can only be carried out by financial entities authorized by the Colombian government.

The growth of the crypto-asset market, in particular cryptocurrencies, depends on the ability of crypto-assets being used in many activities. So, while there is need for a clear regulatory framework that allows measuring risks, it is also important that absolute prohibitions or regulatory disincentives disappear.

In the past two years, a bill that regulates the relationship between wallets, exchanges and platforms in relation to crypto assets has advanced for approval in the Colombian Congress. In the first place, this proposed legislation proposes a series of definitions, among others, the following:

Wallets: These are the virtual media in which the public and private encryption keys are stored.
Crypto-assets Exchange Services: these are the following services: (i) Administration of crypto-assets exchange platforms. (ii). Provision of custody and/or storage services for crypto assets. (iii). Exchange or transfer between crypto-assets and fiat currency, or between one or more crypto-assets. (iv). The supplementary or analogous services related to sections i, ii and iii above.
Crypto Asset Exchange Platform (PIC): These are computer applications or interfaces, internet pages or any other means of electronic or digital communication through which the Crypto-asset Exchange Services are provided.
Crypto-asset Exchange Service Provider: It is a national business entity or a branch of a foreign company, in charge of operating, managing and guaranteeing the operation of the PIC, registering with the Chamber of Commerce of its main domicile and responsible for compliance with the obligations.
Unique Registry of Crypto-asset Exchange Platforms (RUPIC): It is an electronic public registry managed by the Chambers of Commerce whose objective is to allow anyone to access the information published in said registry, and to verify that the Service Providers of Crypto-assets Exchange as holders are duly registered.
PIC Operations Manual: Document that contains the requirements and internal parameters of the PIC for the provision of Crypto-asset Exchange Services.

As a principle of interpretation of the crypto-asset market, it is established in the draft bill that crypto-assets are negotiable directly by their owners. The operation of the different crypto assets, their rules belong to the private sphere of the users, who, based on the principles of free market and free competition, must seek to be informed about the risks inherent in trading with assets of any kind.

The Crypto-asset Exchange Service Providers, Colombian or foreigners, must comply with the following requirements:

Be incorporated as a commercial company domiciled in Colombia or as a branch of a foreign company, and be duly registered in the Colombian mercantile registry.
Include as the exclusive corporate purpose the performance of activities classified as Crypto-asset Exchange Services.
Establish and maintain a computer security program that ensures the availability and functionality of its computer systems, protecting said systems and all information stored in them, from unauthorized access, use and manipulation, the foregoing in accordance with the instructions that for this purpose imparted by the Ministry of Information Technology and Communications.
Adopt control measures aimed at detecting and preventing money laundering and terrorist financing.
Register in the Special Register for Crypto-assets Service Providers before the Chamber of Commerce of the entity’s main address, indicating the web domain and the information determined by the Ministry of Information and Communication Technologies.
Report to the Financial Information and Analysis Unit the information that is required in compliance with money laundering regulations.
Comply with the Colombian personal data protection regulations.
Implement KYC and customer Due Diligence measures.
Have an Operations Manual for the operation of the PICs that it manages, approved by the Ministry of Information Technologies and Communications.

According to the proposed bill, the Crypto-assets Exchange Service Providers are prohibited from:

Offering or paying consumers interests or any other return or monetary benefit for the balance that they accumulate over time or maintain or for any operation directly or indirectly related to the exchange that they carry out with crypto-assets.
Transferring under any title, lend or encumber crypto-assets or any other resource owned by consumers, stored by the Crypto-asset Exchange Service Provider, without the express authorization of the consumer.
Developing any kinds of commercial network or multi-level marketing activity with crypto-assets, as well as their financial intermediation. Likewise, the administrators or service providers of crypto-asset exchange platforms may not allow the commercial distribution of crypto-assets to be carried out on their platforms through network or multi-level marketing activities or similar.
Refraining from carrying out any conduct that leads to the massive and regular collection of funds from the public that additionally implies the absence of consideration in present or future goods or services that justify it or, even if such consideration exists, does not have a reasonable financial explanation.

The model proposed in this draft bill does not comprehensively regulate the different legal aspects of crypto assets. The relationship between some of the agents in the ecosystem can set aside a holistic vision that is necessary to obtain the benefits of intelligent regulation. It is not clear if the Financial Regulation Unit of the Colombian government agrees with the content of this bill.

To sum up, in Colombia there is a regulatory trend that has been transforming from a prohibition on the use of crypto-assets towards a vision more associated with the risks inherent in the market for these digital assets. The regulation remains disperse since different Colombian public entities with market supervision and surveillance functions have issued rules and opinions related to accounting, tax, contractual, exchange and financial issues, among others. An effective coordination between the different public entities that regulate crypto-assets is necessary to achieve legal certainty and stimulate the use of these digital assets as well as to generate a business environment that allows attracting investment. It is necessary to wait and see if the draft bill that is in progress becomes law so that wallets, exchanges and crypto-asset offering platforms in particular, are regulated more specifically in terms of their registration and duties as well as their liability towards consumers and users of crypto-assets.

New regulation on electronic payroll In Colombia

By: María del Pilar Duplat M. – Peña Mancero Abogados

The Colombian tax authority (DIAN by its Spanish acronym) issued resolution 13 of February 11, 2021 regulating the implementation of the electronic payroll system (the “Electronic Payroll Resolution” or the “Resolution”).

Who must submit the electronic payroll to DIAN?

Income taxpayers that are employers or that make payments due to legal or regulatory relationships or that make pension payments, and require to support said costs and deductions in their tax returns.

On a monthly basis, the aforementioned subjects must submit to DIAN a payroll supporting document for its approval or correction.

What is the payroll supporting document?

The electronic payroll supporting document is the document that shows all labor-related payments made by the employer. This document must contain the following information for its creation, transmission and approval by DIAN:

Expressly indicate that it is an electronic payroll supporting document.
Employer complete name of the individual or entity, ID Number or tax id number.
Complete name(s) and ID of the person who receives the payment.
The Unique Code Number of the Supporting Document of the electronic Payroll (CUNE by its initials in Spanish).
Internal consecutive number granted by the subject obliged to submit the electronic payroll.
Contents and amounts of the accrued value of payroll pursuant to the Technical Appendix to the Electronic Payroll Resolution.
Contents and amounts of the deducted sums from the payroll pursuant to the Technical Appendix to the Electronic Payroll Resolution.
Total amount resulting from the difference between the total accrued payroll payments minus the total deducted sums from the payroll payments.
The contents of the Technical Appendix as provided in article 20 of the Electronic Payroll Resolution, regarding the information and contents contained herein.
The form of payment of the payroll per the Technical Appendix to the Payroll Resolution.
Date and time of creation of the document.
Digital signature of the Subject who pays the Payroll in accordance with the DIAN’s requirements of authenticity and integrity of the signature.
Complete name and ID or tax id number of the software supplier and identification of the software.

When do I have to submit the electronic payroll to DIAN?

The electronic payroll supporting document must be issued and sent to DIAN on a monthly basis, ten (10) days after its creation or issuance.

As of when must the electronic payroll be implemented?

Implementation Calendar for subjects per the number of employees

Group	Beginning date of the enabling of the electronic payroll data processing system	Maximum date to start the issuance and transmission of the electronic payroll payment support document and the electronic payroll payment support document adjustment notes.	Range in relation to the number of employees
Group			From	Until
1	May 31^st, 2021	July 01, 2021	More than 251
2		August 01, 2021	101	250
3		September 01, 2021	11	100
4		October 01, 2021	4	10
5		November 01, 2021	2	3
6		December 01, 2021	1

Permanent Implementation Calendar

The obliged subjects will have a term of two (2) months from the date in which they make the payroll payments to carry out the enabling of the service and proceeding to transmit the supporting documents of the electronic payroll and its adjustment notes.

The remaining subjects must issue the supporting payroll document and their adjustment notes to request the costs and deductions of the income tax and the VAT deductible taxes, when applicable.

Implementation calendar for subjects not obliged to issue electronic sales invoices

Subjects not obliged to issue electronic sales invoices must start the enabling of the electronic data payroll service on March 31, 2022; and they must issue and send the supporting document of the payment of the electronic payroll and their adjustment notes, no later than May 31, 2022.

How do I issue the electronic payroll documents?

The enabling procedure is the one that is developed within the electronic invoicing system which must have the function to issue the electronic payroll supporting document pursuant to DIAN’s requirements.

The enabling procedure must be carried out before the date when the subjects must start with the implementation and the term when they must submit the monthly electronic payroll.

If you have further inquiries regarding this new regulation, please do not hesitate to contact us at: info@pmabogados.co

Why a due diligence process may become a nightmare in Colombia?

Strong institutions with reliable databases available to the public are key when carrying out a due diligence process. In most cases, information provided by the target is insufficient and not always accurate. This means that attorneys must be creative in order to look for the right information in the right places.

Here are some examples of what can go wrong if a due diligence process is not properly handled:

Real estate is tricky in Colombia, especially when you acquire assets or companies with rural real estate. Many attorneys focus on making sure that the “owner” of the land or property is duly recorded with the Real Estate Registry without realizing there is so much more! For instance: (i) determining whether the area has oil & gas or mining licenses that would create compulsory easements or eventually hinder its use; (ii) determining whether there are environmental restrictions such as being part of a national park, a protected wetland or a forest; (iii) verifying whether the land was formerly owned by communities or people who had to give it up because of armed groups’ pressure and are now subject to restitution proceedings; (iv) confirming that the land is not in fact a barren land that someone occupied as, regardless of time lapsed, it will continue to be State-owned and not subject to transfer.
The Superintendence of Corporations recently issued a new regulation introducing stricter rules for anti-money laundering and terrorism financing. We cannot hide that Colombia has individuals and companies involved in such activities that do business in creative manners so as to disguise the true origin of their funds. A proper investigation during due diligence should include examining who the beneficial owners of the target are and searching not only the standard international OFAC and similar lists but also carrying out a full search of local media publications and other more informal sources of information.
Latin American countries keep facing more and more corruption scandals. Colombia is not the exception. Doing business with relatives, partners and close friends of politically exposed parties can be risky. A proper due diligence should involve requesting full disclosure not only from all sellers but also from the target’s main stakeholders. Regulatory standards can be found in the Colombian anti-corruption statute.
Unlike most Latin American countries, Colombia’s foreign exchange regulation imposes strict reporting obligations concerning foreign-currency-related operations such as foreign investment, receiving or granting loans from/to foreign residents, granting securities abroad, imports and exports. Non-compliance with such obligations may derive in huge fines to be imposed either by the Superintendence of Corporations or by the tax authority (DIAN). To avoid such liability, due diligence should include reviewing all the above foreign exchange transactions including: timely filing of reports to the Central Bank; correct reporting of each transaction; requesting an up-to-date report from the Central Bank to obtain information on all reported items.
When searching for the history of land, corporations, litigation, property and any other asset that is subject to public record, one must be careful in Colombia. Government agencies are not always up-to-date and technology tends to be basic when it comes to search engines. There are entities and courts who simply do not provide such service to the public so not being able to complete an independent verification of the target’s records is common.

Being able to distinguish between what a “deal breaker” is and what not requires a thorough understanding of the risks involved and their eventual effects. For example, if a mining license does exist on the target’s land, a deal breaker would be not being able to use the land at all because of a compulsory easement that would prevent you from carrying out any activity whatsoever and that land being essential and of great value to the business you are acquiring. Otherwise, you may still negotiate such liability being properly disclosed in the “Disclosure Schedule” of the purchase agreement and establishing an escrow or taking any other measure to tackle loss if occurring. The same thing cannot be said when there are findings concerning money laundering or corruption charges. The risk involved in such situations would need to be measured in a very conservative manner as effects would not only involve economic consequences but eventual imprisonment.

Peña Mancero Abogados is publishing a series of high-level articles on M&A activity in Colombia. This article is for information purposes only and does not constitute legal advice. If you require further information, please contact Gabriela Mancero (info@pmabogados.co)

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Books

CAUSE FOR DISOLUTION OF COMPANIES DUE TO NON-COMPLIANCE WITH THE HYPOTHESIS OF CONTINUING BUSINESS

By: Daniel Salazar López

The current political, social and economic crisis as a result of COVID-19 outbreak, led many companies and branches of foreign companies to enter into a cause for dissolution for losses or accumulated losses, some of them overcame the cause for dissolution while others had to be liquidated.

Until recently, in Colombia a company entered into a cause for dissolution when it had losses or accumulated losses which resulted in a decrease in equity below 50% of its subscribed capital. If this cause for dissolution was not solved within a 2 year period, the company had to be liquidated. Nevertheless, Law 2069 of 2021 (Entrepreneurship Law) eliminated this cause for dissolution and liquidation of companies in Colombia, and introduced a new cause for dissolution, the non-compliance with the hypothesis of continuing business. This is a step forward in corporate matters, since the cause of losses caused confusion, firstly taking into account that companies at the beginning of their economic activity generated high costs that prevented them from having profits at the end of the fiscal year, and therefore entering into grounds for dissolution; previously, at the closing of each fiscal year, the cause for dissolution was warned of and could be enervated within the established term, now it is imperative that the administrators of a company intervene more thoroughly on the hypothesis of continuing business.

The hypothesis of continuing business provides that provides that at the end of the fiscal year, a company must evaluate its financial statements to determine whether it has the capacity to continue operating. Therefore, when the highest corporate body analyses and evaluates the financial statements prepared under the hypothesis of continuing business, and it is observed that there is a detriment to the company’s assets and that this casts doubt on the continuity of the company’s continuing business[1], the company will be subject to dissolution.

If your company has an International Financial Reporting Standard (IFRS) accounting framework, the management under IFRS will assess the entity’s ability to continue with its businesses, which underlines the importance of preparing financial statements for the fiscal year 2020 in the current business environment. On the other hand, the companies that were subject to dissolution due to losses before the entry into force of Law 2069, such cause was suspended by virtue of Decrees 560 and 772 of 2020, while the companies are recovering in the midst of the crisis generated by COVID-19. It is worth mentioning that such suspension is extended to Law 2069 until the end of the term of such decrees, i.e., until April 2022.

In view of the foregoing, when the administrator notices in the financial statements of the fiscal year that the hypothesis of continuing business is not complied with, the administrator must summon the highest corporate body to inform in a documented manner such situation, so that the highest corporate organ of the company declares that the company has entered into dissolution grounds and therefore measures must be taken to continue with the business or to liquidate the company. It is important to highlight that when the company enters into a cause for dissolution, the administrators must abstain from carrying out new operations different from the ordinary course of business of the company. In case of non-compliance with the duty to inform the respective highest body by the administrator, the administrator shall be jointly and severally liable for the damages caused to the members of the Company or third parties. In assessing whether continuing business situation is appropriate, the management shall consider all available facts about the future, which shall cover at least, but not be limited to, the next twelve (12) months from the reporting date.

The following situations are considered as non-compliance with the continuing business hypothesis:

Liquidity risk
Legal claims of significant contingencies.
Low quality condition of the company’s products or services.
Termination of contracts with significant customer and suppliers.
High consecutive borrowing to invest in long-term business.
Financial losses due to failure to meet contractual payment obligations.
Labor strikes that have a significant impact on the company´s result.
If there are delay in the payment of liabilities with banks, payroll or dividends.

Thus, if the company has a history of profitable operations and it´s positive cash flow projections indicate appropriate access to financial resources, it can be concluded that the use of the hypothesis of continuing business is appropriate. Now, it is imperative to prepare the financial statements for the fiscal year, including the trial or periodic financial statements, and the concept issued by the accountant will become more relevant since the highest corporate body will determine the viability in the short and medium term (12 months), avoiding deterioration in the common pledge of the creditors and in the equity of the associates. If, on the contrary, there is an uncertainty in the operations of the ordinary course of business of the company, and it isn´t possible to cover it within the following twelve months, the cause of non-compliance with the hypothesis of continuing business is configured and the company must proceed with its dissolution and liquidation. The proposal of this new cause seeks to protect the contingencies derived from the state of emergency due to COVID-19.

[1] Consejo Técnico de la Contaduría Pública Radicado 2018-095, del 2 de febrero de 2018

Data Protection & Privacy

Autor: Daniel Peña Valenzuela

Editorial: European Lawyer
Categoría: Data Protection, European & EU Law
Año de Edición: 08 Nov 2016
Formato: Libro Impreso
Número de páginas: 1124
ISBN: 9780414057821

Sinópsis:

The number of jurisdictions with laws on data protection and privacy is still on the rise and the interest in the area of data protection and privacy has never been greater. The book aims to create a single starting point of reference for businesses, data protection officers, advisers and legal professionals involved in data protection and privacy. This third edition of Data Protection & Privacy – Jurisdictional Comparisons serves as an indispensable reference guide on the data protection and privacy laws in over 40 countries from six continents.

Written by expert local practitioners, with deep experience in the field of data protection and privacy, every chapter contains an overview of the key elements and principles of the data protection and privacy law framework in the relevant jurisdiction as well as the latest developments and trends. Because each chapter follows the same Q&A structure, readers can conduct quick comparisons between the various legal regimes.

Contents

1. Legislation
2. Data protection authority
3. Legal basis for data processing
4. Special rules
5. Data quality requirements
6. Outsourcing and due diligence
7. International data transfers
8. Information obligations
9. Rights of individuals
10. Security of data processing
11. Data protection impact assessments, audits and seals
12. Registration obligations
13. Data protection officer
14. Enforcement and sanctions
15. Remedies and liability

Jurisdictional coverage

1. Argentina – Marval, O’farrell & Mairal
2. Australia – Gilbert + Tobin
3. Austria – Preslmayr Rechtsanwälte Og
4. Belgium – Covington & Burling Llp
5. Brazil – Felsberg Advogados
6. Bulgaria – Djingov, Gouginski, Kyutchukov & Velichkov
7. Canada – Osler
8. Chile – Palma & Palma Abogados
9. Colombia – Peña Mancero Abogados
10. Costa Rica – Thompson Abogados
11. Czech Republic – Havel, Holásek & Partners S.R.O.
12. Denmark – Beck – Bruun
13. EU – Covington & Burling Llp
14. EU Institutions & Bodies – European Commission
15. Germany – Covington & Burling Llp
16. Hong Kong – Deacons
17. Hungary – Oppenheim Law Firm
18. India – Vaish Associates Advocates
19. Ireland – Mason Hayes Curran
20. Israel – Vigal Arnon & Co
21. Italy – NCTM
22. Japan – Atsumi & Sakai
23. Lithuania – Valiunas Ellex
24. Luxembourg – Arendt & Medernach SA
25. Malaysia – Christopher Lee Ong
26. Malta – GVTH Advocates
27. Mexico – Laurant Abogados
28. Morocco – Hajji & Associes
29. Netherlands – Vondst Advocaten
30. Poland – Soltysinski Kawecki & Szlezak
31. Portugal – Coelho Ribeiro E Associados
32. Romania – Nestor Nestor Diculescu Kingston Petersen
33. Singapore – Wongpartnership Llp
34. Slovakia – Havel, Holásek & Partners S.R.O
35. Slovenia – Rojs, Peljhan, Prelesnik & Partnerji
36. South Africa –Adams & Adams
37. South Africa – Lee & Ko
38. Spain – Garrigues
39. Sweden – Mannheimer Swartling Advokatbyrå Ab
40. Switzerland – Lenz & Staehelin
41. Taiwan – Lee And Li, Attorneys-At-Law
42. Turkey – Elig
43. Uae – Al Tamimi & Company
44. Uk – Covington & Burling Llp
45. Usa – Covington & Burling Llp

International Joint Ventures (2013)

GABRIELA MANCERO,

JOINT VENTURE IN COLOMBIA, PAGS 91-102,

OBRA: INTERNATIONAL JOINT VENTURES, A GUIDE OR U.S. LAWYERS (INTERNATIONAL JOINT VENTURES/MERGERS AND ACQUISITIONS COMMITTEE)

CHICAGO, AMERICAN BAR ASSOCIATION,

AÑO: 2013.

This publication is part of a series of works published by the international Mergers & Acquisitions Subcommittee to assist business lawyers in advising clients in international transactions. The focus of this publication is on bilateral joint ventures between US and overseas coventurers.

In providing a framework for considering issues particular to a jurisdiction’s legal system and culture, the Task Force has crafted a flexible but relatively uniform method of how to think about issues particular to international joint venture. The result is a reference work that is intended to serve as a starting point from which to map out effective agreements.

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