Legal update: The contracting persons with the State of Nicaragua must to declare their Final Beneficiary.

Oct 4, 2020 | English Blog

The General Directorate of Public Contracting issued the Administrative Circular No. DGCE-SP-11-2020 dated September 24, 2020, which establishes the obligation to declare who is the Final Beneficiary of the contracting persons with the State of Nicaragua.

Legal entities that contract with the State of Nicaragua must submit a Notarized Declaration, signed by their Legal Representative, where they will state the name and surname, identification, nationality and address of their Final Beneficiary, it also implies detailing the entire share chain until reaching the Final Beneficiary, who according to what is established by law is the natural / individual person who has the property and control of the legal entity.

With the aforementioned Notarized Declaration, the contracting institution will be expressly authorized to publish said information on the Unique Procurement Portal within a maximum period of 48 hours after the signing of the contract with the State or the issuance of the Purchase Order and will be also incorporated into the contract file.

When the contractor is a natural / individual person, he must present this Declaration on common paper, affirming and attesting that he is himself Final Beneficiary. This information will be published on the Unique Procurement Portal.

The Circular establishes that the terms and conditions or the invitation for a public tender must indicate that the presentation of the Final Beneficiary Declaration will be an essential requirement to sign the respective contract or to issue the Purchase Order; but it does not clearly establish whether said Declaration must be submitted during the bidding process or until the contract is awarded, therefore, it is advisable to conduct a carefully review of  the tender documents or the invitation, if applicable, to confirm whether it will be presented to the start of the process and not neglect this detail.

Finally, it is established that these provisions will become effective as of their publication in the Unique Procurement Portal. In our Portal review we have not found the publication of the referred Circular, however, it is very likely that the contracting institutions will put it into practice from now on.

Consequently, is necessary that every natural or legal person contracting with the State of Nicaragua immediately prepare the information regarding to the shareholder structure chain until the correct determination of the Final Beneficiary; you must be aware that such information will be published by the contracting institution; and the Legal Representative of all legal entities must be aware that they have to sign the abovementioned Notarized Declaration each time they participate in a contract with the State of Nicaragua.