COLOMBIA Law and Practice Contributed by: Juan Camilo Carrasco, Asensi Abogados
Sanctions Regarding Exploitation Rights When an operator does not declare the exploitation rights in the respective period, a sanction equivalent to 200% of the exploitation rights caused by the unde- clared period will be imposed. When operators omit or include information in their private liquidation of the exploitation rights that leads to payment of a lower value, a penalty for inaccu- racy equivalent to 160% will be imposed. This penalty comprises the difference between the balance to be paid determined by the administration and the bal- ance that was declared by the operator. Contractual fines and the penalty clause are enforced by means of the contractual procedure contained in Article 86 of Law 1474 of 2011. Sanctions regarding exploitation rights are enforced by means of the puni- tive administrative procedure contained in the Admin- istrative Code (Law 1437 of 2011). The penalties are enforced through the insurance guarantee, as a claim for breach of contract. Personal Sanctions Natural persons who illegally operate either online or land-based games of chance (without a concession contract or authorisation by Coljuegos) can be penal- ised with fines ranging from COP80 million to COP100 million. The illegal operation of games of chance is a crime that is penalised with between six and eight years in prison and with disqualification from operating games of chance for up to five years. Commercial establishments and goods involved in the illegal operation of games of chance can be the sub- ject of expired ownership processes. The elements of games of chance involved in the ille- gal operations can be confiscated and subsequently destroyed. The sanction for illegal operations of games of chance will be applied to the owner of the establishment and to the administrator and/or employee involved in the operation.
is applicable in all matters regarding the enforce- ment of obligations. As such, regulatory bodies may use financial guarantees as standby letters of credit and insurance bonds as compliance guarantees to execute compliance situations, following an admin- istrative procedure that did not satisfy the regulatory expectations regarding compliance. One of the particularities of the Colombian authority (Coljuegos) is that it controls its jurisdiction, meaning that the regulator is both judge and party. Coljuegos must promote the growth of the gaming industry and, at the same time, control and enforce the compliance of the licensed operators. 11.2 Sanctions Administrative, penal and financial procedures are commenced against illegal operators or non-compli- ant operators. Administrative procedures are usually commenced for breach of contract regarding reporting or techni- cal compliance. As by law the regulator has the power and jurisdiction to be judge and party, it is very com- mon to begin the sanctioning process against non- compliant operators as a persuasive measure. 11.3 Financial Penalties Coljuegos can impose the following financial penalties. Contractual Fines (Concession Contract) Coljuegos may impose daily and successive fines of up to 1% of the annual value for fixed exploitation rights, in order to obtain compliance, without exceed- ing 10% of the contract value in total. Breaching the investment cap of the Advertising Res- olution will result in a fine equivalent to 1.5% of the value of the concession contract. Penalty Clause (Concession Contract) In the event of total or partial breach of the obliga- tions contained in the concession contract, or upon unilateral termination of the contract by Coljuegos, the operator must, as a penalty, pay Coljuegos an amount of up to 10% of the value of the contract, which is understood as the value of the fixed exploitation rights throughout the term of the concession contract.
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