PARAGUAY Law and Practice Contributed by: Juan Fiorio, Alejandra Corrales and Jean Saavedra, Fiorio, Cardozo & Alvarado
The Resolution establishes the duty of the board of directors to promote and foster a corporate culture that demands, and incentivises, ethical conduct, avoids or minimises potential conflicts of interest, and promotes a culture of control within the organisation. With respect to confidentiality, directors, admin - istrative and oversight bodies, and employees of financial institutions are strictly prohibited from disclosing any information regarding client operations, except with the client’s explicit writ - ten authorisation. 4.2 Registration and Oversight of Senior Management According to the Banking Law, the board of a financial institution must consist of no less than four regular members who demonstrate the necessary probity, suitability, and experience to carry out their responsibilities effectively. The following persons are prohibited from serv - ing as president, directors, managers, or syndics of banking entities: • those disqualified or deemed ineligible under the Civil Code for company management and representation; • those who hold positions as directors, man - agers, syndics, accountants, or employees in other entities subject to the supervision of the Superintendency of Banks and their subsidi - aries; • those who hold positions in branches of gov - ernment, except for teaching positions and consultative or technical advisory roles; • those who have been declared bankrupt; • those who are insolvent and those who have debts under judicial collection; • those who have been convicted of intentional criminal offences;
• executives and officials of the BCP, unless they: (a) have obtained authorisation from the Executive Power to hold positions in pub - lic entities supervised by the BCP; or (b) are elected as president and representa - tives by official banks to the Retirement and Pension Fund for Banking Employees and their companies, in accordance with and to the extent provided in Article 1 of Law No 2226/03, which amends Article 29 of Law No 489 of 29 June 1995 (Or - ganic Law of the BCP); • those barred from operating a bank account while the sanction is in effect; • those who have been sanctioned by regulato - ry and supervisory financial entities, whether local or international, due to professional mis - conduct in the performance of their duties; • those who hold a shareholding equal to or greater than that determined by the BCP in another entity subject to its supervision; and • those who perform one or more functions that may create conflicts of interest or undermine the sound management of the entity, accord - ing to the criteria established by a reasoned general resolution issued by the Board of the BCP. Both the election and any changes to the com - position of the board of a financial institution must be communicated to the Superintendency of Banks within a mandatory period of three working days, accompanied by the following documents: • authenticated copy of the individual’s identity card and/or passport; • academic degree certificate; • police record, or authenticated copy thereof; • signature registration;
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