COLOMBIA Law and Practice Contributed by: Juan Camilo Carrasco, Asensi Abogados
• fines of up to 2,000 times the legal monthly mini- mum wage; • temporary closure of the commercial establishment for up to 180 days; • in the case of recidivism, definitive closure of the establishment of commerce or the order of defini- tive withdrawal of a website or the electronic com- merce medium; • successive fines of up to 1,000 times the legal monthly minimum wage for non-observance of orders or instructions given by the authority; and • when it is verified that the administrators, directors, legal representatives, statutory auditors, partners, shareholders or other natural persons have author- ised or executed behaviours contrary to the Con- sumer Protection Statute, fines of up to 300 times the legal minimum monthly wage and a prohibition on performing commercial activities for up to five years. The Advertising Resolution includes new sanctions as follows. • Concession contracts will not be granted to enti- ties that intend to use or have used names, brands or commercial badges of companies that have operated or advertised games of luck and chance without prior authorisation by Coljuegos. • Concession contracts will not be granted to enti- ties that have associated gaming suppliers with a presence on the websites of operators who exploit the monopoly or who illegally carry out promotional activities in Colombia. • Failure to comply with the provisions set out in the Advertising Resolution will result in a declaration of breach of contract and, consequently, a fine equiva- lent to 1.5% of the value of the concession contract. If non-compliance is declared for the third time during the term of the contract, this will result in the unilateral termination of the concession contract. • Illegal operations control management shall be responsible for carrying out administrative sanc- tioning procedures under the terms of the law against natural and/or legal persons who use, allow and/or contract advertising in favour of any activ- ity that sponsors, promotes or encourages illegal gambling or activities that are not carried out by operators authorised by Coljuegos.
It is worth noting that these provisions have been chal- lenged before the Council of State.
10. Acquisitions and Changes of Control 10.1 Disclosure Requirements There are no specific conditions for the acquisition of a gaming company that has signed a concession contract. However, as these types of contracts are ruled under public law, intuitu personae, the specific qualities of the private party that was accredited in the selection stage must be considered. If the acquisition of the company results in a change of legal entity that will cause a transfer of the contract to a third party, this must be previously approved by Coljuegos. Furthermore, about the relevant due diligence obliga- tions, information pertaining to natural persons who are shareholders of 5% or more should be disclosed. 10.2 Change of Corporate Control Triggers All changes of control – regarding modification to the corporate equity, capital increases, and shareholder changes beyond 20% – must be reported to the regu- lator every six months. Although it is not a require- ment to request prior authorisation for this change of control, it is prudent to report the information in order to guarantee that there will not be any compliance complications. The Advertising Resolution stated a new requirement (considered illegal under the authors’ criteria) to noti- fy Coljuegos about a change of control, or to obtain Coljuegos’ authorisation for share acquisitions, prior to carrying out any of these legal acts. 10.3 Passive Investor Requirements No distinctions are made for passive investors.
11. Enforcement 11.1 Powers
The relevant authority grants the permits necessary to operate in the betting industry through a conces- sion contract, which means that public contract law
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