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Law 6355/19 is derogated

By Dahiana Acosta and Martín Carlevaro, BKM | Berkemeyer - 14/11/2022

On July 18, 2022, the Executive Branch passed Law No. 6919/22, providing in its article 2: “LAW No. 6355/2019 “WHICH AMENDED ARTICLES 1, 3, 4, 7, 13 AND 21 OF LAW N° 5033/13 THAT REGULATE ARTICLE 104 OF THE NATIONAL CONSTITUTION, ABOUT SWORN DECLARATION OF PROPERTIES AND INCOMES, ASSETS AND LIABILITIES OF PUBLIC OFFICIALS, AND EXPANDS THE PROVISIONS OF LAW N° 2051/ 03, ITS MODIFICATIONS AND SUPPORTING REGULATIONS” IS HEREBY DEROGATED.

Let’s recall that the recently derogated law obliged shareholders, directors, managing partners or similar companies, as well as national or foreign entities that wished to submit bids in tendering processes, and/or are contractors, suppliers or concessionaires of the Paraguayan State, to submit a sworn statement listing their properties and income, assets and liabilities, before the Comptroller General of the Republic under the same terms and conditions as those provided for public officials and employees, a circumstance that led to the promotion of a number of actions based on unconstitutionality by the subjects affected by said law, which concluded with the granting by the Supreme Court of Justice (“SCJ”) of suspension of the effects for the appellants.

After the CSJ declared the unconstitutionality of Law No. 6355/19 on the grounds of being in conflict with superior precepts of constitutional rank by mistakenly attempting to extend the scope of what is expressly established in Article 104 of the National Constitution (“CN”) to subjects who conduct their commercial activities in the private sector – subjects who are not bound by the Constitutional precept – derogation of Law No. 6355/19 becomes legally foreseeable in a manner to produce the Paraguayan legal reordering.

It is noted that Art. 104 of the CN refers to the MANDATORY DECLARATION OF ASSETS AND INCOME solely and exclusively of “Public officials and employees, including those resulting from popular elections, those of state, binational, autarchic, decentralized entities and, in general, those who receive permanent remuneration from the State, are subject in mandatory manner of providing a sworn declaration of assets and income within fifteen days of having taken office, and in the same term upon leaving the same.”

Through the new Law No. 6919/22, not only the constitutional provisions are claimed, but at the same time a definition of the scope of the term “public official” is provided, clarifying that the obligated subjects are “any person commissioned, hired or elected by popular election to provide services in State offices and in general in any body belonging to the central and decentralized administration (…) and in general public officials who receive remuneration from the State, excluding those who carry out commercial activities in the private sector ”.

Summarizing, upon the new Law No. 6919/22 becomes effective, the following are no longer affected as subjects obligated to submit their sworn declarations of properties and income, assets and liabilities:  “Shareholders, directors, managing partners or similar of companies and entities that are contractors or concessionaires of the State, as well as any person or legal entity that in any way contracts, provides a service or performs a work for the State, under any of the legal modalities provided.”

Finally, and as a logical effect of the provisions set forth in the new law, the National Directorate of Public Procurement and other State agencies and entities must adjust their policies and requirements in the different bidding specifications in order to implement the principle of congruence, excluding the request for filing sworn declarations of properties and incomes, assets and liabilities, as a requirement for evaluating their conditions as bidders and  execution by the contractors and suppliers of the State.

For more information, please contact dahiana.acosta@berke.com.py  or martin.carlevaro@berke.com.py

By Dahiana Acosta and Martín Carlevaro, BKM | Berkemeyer - 14/11/2022
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BKM | Berkemeyer

Established in 1951, BKM | Berkemeyer provides expert legal services to local and foreign clients in Paraguay, gaining a global reputation for quality, expertise and professionalism.

BKM | Berkemeyer prides itself on the ability to meet clients’ needs directly, providing professional and practical advice of the highest quality through team-work and collaboration to render services in a thorough manner.

Lawyers in the firm are multilingual, speaking Spanish, English, German, French, Portuguese, Italian and Japanese, which facilitates efficient and expeditious communication.