COSTA RICA Law and Practice Contributed by: Douglas Soto, Miguel Elizondo-Soto and Osvaldo Madrigal Méndez, Zurcher, Odio & Raven
1. Legal Framework 1.1 Key Laws and Regulations
Principal Laws and Regulations The principal laws and regulations governing the banking sector and the regulators responsible for supervising banks in Costa Rica are as fol - lows. • The Organic Law of the Central Bank of Costa Rica, No 7558 sets the Central Bank’s struc - ture, governance and responsibility for: (a) the monetary and exchange rate policy; (b) overseeing the management of interna - tional monetary reserves; (c) operating the internal and external pay - ment system; (d) setting forth the regulations for the crea - tion, functioning and control of financial intermediaries; (e) overseeing legal reserve requirements of financial intermediaries; (f) acting as a lender of last resort; (g) providing liquidity assistance to markets and solvent institutions; (h) promoting the strengthening of the na - tional financial system; (i) safeguarding financial stability; and (j) co-ordinating the macroprudential policy. The Law also outlines SUGEF’s role, tasks and responsibilities, and the non-compli - ance fines and penalties for supervised financial entities. • The Organic Law of the National Banking System, No 1644 sets up the general rules applicable to the banking system for state- owned and private banks, including the con - stitution of branch offices of foreign banks. • The Regulatory Law of Securities Market, No 7732 creates the regulators responsible for supervising banks and certain financial entities (CONASSIF and SUGEF), and their regulatory powers. • The Law of the Deposit Guarantee Fund and Liquidation of Financial Entities, No 9816 and
The supervisory and regulatory structure of the Costa Rican banking system is composed of two different bodies: • the National Council for Supervision of the Financial System (Consejo Nacional de Supervisión del Sistema Financiero – CONASSIF); and • the General Superintendency of Financial Institutions (Superintendencia General de Entidades Financieras – SUGEF). CONASSIF constitutes the senior steering body of the supervisory and regulatory system of Costa Rica. It leads and co-ordinates SUGEF, which is an autonomous body of the Central Bank of Costa Rica (BCCR) that is operationally independent while being under the direction of CONASSIF. SUGEF is the supervising and regulating agency of all financial intermediaries operating in Costa Rica, including state-owned and private banks, non-banking financial companies, mutual sav - ings and credit entities, as well as any other enti - ty that is legally authorised to carry out financial intermediation activities. CONASSIF has the authority to issue regulations regarding the authorisation, supervision, over - sight and operations of SUGEF and the entities supervised by it. Such regulations are proposed and drafted by SUGEF, which also issues reso - lutions and guidelines for the financial sector (circulars, letters, resolutions, legal criteria and opinions).
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