A new Regulation of Commercial Sanctions and Infringements enters the Bolivian scenario.

Ana Carola Muñoz – Associate

On January 29, 2021, by means of the Administrative Resolution RA/AEMP/No. 009/2021, the AEMP annulled the Internal Administrative Resolution that initially regulated the issues related to the audits of companies.

In the Plurinational State of Bolivia, the Authority for Corporate Auditing and Social Control (hereinafter “AEMP”) is the entity in charge of regulating, controlling and supervising that commercial companies operate within the framework of legality.

The purpose of the new regulation is to regulate the application of administrative sanctions in cases where companies do not comply with the Code of Commerce, Accounting Principles and Standards, regulatory standards and administrative provisions that are mandatory for legal entities that carry out acts of commerce or commercial activity on a regular basis and for profit within the national territory.

The sanctions established are of an administrative nature and therefore, independent of any civil or criminal liability that may arise from not compliance with legal provisions. Depending on the seriousness of the infraction, the following administrative sanctions may be imposed:

a. Written warning

b. Fine

c. Temporary suspension of the President of the Board of Directors and Manager.

The Regulation also establishes fixed and variable fines. Among the fixed fines, which may amount up to Bs. 18,000 (aprox. US$ 2,500), are:

a. Lack of registration in the Commercial Registry;

b. Failure to update the Commercial Registration;

c. Extemporaneous update of the Commercial Registration;

d. Failure to exhibit an updated Matrícula de Comercio;

e. In the event that the Regulated Entity obstructs and impedes the normal development of the acts carried out by the AEMP;

f. When the Regulated Entity does not deliver accounting, legal, economic, financial and administrative information and documentation within the required terms during the audit;

g. Finally, in the event that the Regulated Entity is legally notified by the AEMP that establishes an obligation to do or not to do and the Regulated Entity does not comply.

However, for 39 typified infractions, percentages are established that may reach up to 5% of the Gross Profit or Capital Stock margin. For the purpose of applying the fines, 80% of the Gross Profit disclosed in the Financial Statements corresponding to the inspected management will be taken as the basis for calculating the penalty. In the event that these Financial Statements do not show the Gross Profit, the AEMP may resort to other competent authorities and/or entities to determine it. In the Financial Statements that show a loss or the AEMP has not been able to determine the Gross Profit, the amount of the Capital Stock will be taken as the basis for calculating the penalty.

In this sense, and in order to avoid any type of fine or sanction by the AEMP, companies should consider of vital importance to initiate a preventive legal audit to the company. In IA we are ready to collaborate and guide you in this process.