PARAGUAY Law and Practice Contributed by: Juan Fiorio, Alejandra Corrales and Jean Saavedra, Fiorio, Cardozo & Alvarado
a minimum period of five years, including docu - ments, files, and correspondence. In the event that the financial institution detects any signs or suspicions related to money laun - dering or asset laundering, it must report imme - diately to the Secretariat for the Prevention of Money Laundering or Assets (SEPRELAD). For client identification, transaction registration, and signs of suspicious transactions, the Res - olution of SEPRELAD must be applied, which approves the Regulation for Prevention Based on the Risk Management System for Obligated Subjects Supervised by the Superintendency of Banks (Resolution No 349/2013) 6. Depositor Protection 6.1 Deposit Guarantee Scheme (DGS) The Deposit Guarantee Fund in Paraguay was created by Law No 2334/03, with the aim of par - tially protecting the public’s savings within the national financial system. The Deposit Guarantee Fund is administered and accounted for by the BCP, without form - ing part of the capital of the BCP; it may only be used for the purposes of partially protecting public savings. The use of resources from the Deposit Guarantee Fund will be based on the principle of cost minimisation. The BCP deter - mines the investment management and liquidity policies of the Deposit Guarantee Fund, ensur - ing they align with its objectives and functions. Covered by this fund are natural or legal per - sons who hold deposits eligible for the guaran - tee. Deposits protected by the fund include total cash deposits, regardless of modality or denom - ination, held by private entities in the national
financial system. The coverage limit is capped at the equivalent of 75 monthly minimum wages for unspecified activities in the capital city (Asun - ción), equivalent to approximately USD28,000. The Deposit Guarantee Fund is financed through both public and private contributions. The Par - aguayan state contributed an amount equiva - lent to USD50,000,000 at the time of the fund’s establishment. Private contributions consist of mandatory quarterly contributions from finan - cial intermediation entities, which will be calcu - lated based on the average balance of deposits maintained by the financial entity during each quarter. A quarterly contribution rate of 0.12% will be applied to the average quarterly balances of deposits in both local and foreign currencies. As of October 2023, the deposits covered by the guarantee reached PYG22 trillion, representing 16.4% of total deposits and 6.9% of the esti - mated GDP for the year. 7. Prudential Regime 7.1 Capital, Liquidity and Related Risk Control Requirements In Paraguay, banks are required to maintain mini - mum capital adequacy levels, primarily regulated by Law No 861/96 and regulations issued by the BCP. While Paraguay has yet to fully adopt Basel III standards, the BCP has implemented some of its principles to strengthen financial stability and risk management within the banking sector. Capital Requirements Banks are required to maintain a minimum paid-in capital. Additionally, they must ensure adequate levels of capital buffers based on the BCP’s guidelines to mitigate operational and market risks. The capital adequacy ratio is peri -
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