This is a translation of the Reform of Consumer Defense Law itself. It is seen as a move on the part of the Sandinista Government to free the 28 members of the government from the impact of the sanctions imposed by the US, and other high officials also sanctioned by the European Union and Canada. It forces banks in Nicaragua to negotiate with the government some work- around the sanctions, under pain of facing possible temporary or permanent closure by the regulating agencies under government control.
Law No. 1061
Law of Reform and Addendum to Law No 842, Law for the Protection of the Rights of Consumers and Users
First Article: Reforms
Let Article 5 be reformed, Definitions related to “Consumers or users”; “basic services” and “financial services”; paragraphs 10 and 25 of Article 9; Article 53; paragraphs 2 and 3 of Article 54; and Article 120, all from Law 842, Law for the Protection of the Rights of Consumers and Users, published in La Gaceta, No 129 of July 11, 2013, which will read as follows:
“Art. 5 Definitions
Consumer or user: Individual or legal figure who acquires, uses, or enjoys goods or services, private as well as public, as the final recipient, including the State and its institutions when they act as consumers or users.
Basic Services: For the effects of the current law, basic services will be understood as all those provided by public, private or mixed enterprises on matters of potable water and sewage, electric energy and street lighting, basic phone and cell phones, mail, internet and subscription television.
Financial services For the effects of this law, financial services will be understood as: deposits, loans, credits, credit and debit cards, transfers, family remittances, purchase and sale and/or currency exchanges, insurance, stock market operations, services provided by bonded warehouses, payment systems, financial technology for payment services and any other services that regulated or non-regulated financial entities provide.
“Art. 9 Obligations of providers
Without impacting the obligations contained in other laws, the obligations of providers are the following:
10: Offering goods or providing services to consumers or users without any discrimination as to politics, race, sex, gender, nationality, language, disability, economic or social status, health condition, religion, age, opinion, civil status, or any other reason. In that sense, providers will not be able to deny the treatment of requests, nor cancel contracts or transactions that individuals or public, private or mixed entities legitimately negotiate for the satisfaction of the assets and services needed or contracted, without being based on explicit laws, norms or resolutions that the respective Regulating entity issues for such purpose, and/or for a legally justified cause. Legitimately negotiated transactions should be understood as those requests, contracts or transactions that comply with all the requirements established in the corresponding legal regulations.
In the case of financial services offered by institutions regulated and/or supervised by SIBOIF, CONAMI, BCN and MEFCCA, the users must comply with the requirements of the laws, norms and policies, the latter adapted to the legal framework;
- Implement the resolutions of the competent authorities on issues regarding the defense of the rights of consumers and users, obligated to serve or restore the provision of assets or services denied or violated of the consumer or user if it is so decided.”
“Art. 53. Regulation of Financial Services
The dispositions of this Chapter apply to the relationships between users and providers of financial services in terms of possible denouncements, consultations or resolution of claims or conflicts on the part of users affected in their rights related to financial services.
On matters of the protection of the rights of users of financial services, it will correspond:
- To the Superintendent of Banks and Other Financial Institutions the application of the current Law on matters of financial services provided by banks, financial societies and other entities subject to their regulation, supervision and oversight in accordance with what is set forth in Law No 316, Law of the Superintendency of Banks and Other Financial Institutions, and the rest of applicable financial laws.
- To the National Commission of Microfinance in the application of what is stipulated in the current law on issues of financial services provided by institutions regulated and supervised by this Commission.
- To the Central Bank of Nicaragua in the application of what is stipulated in the current Law on matters related to the payment systems of the country, including the services of financial technology for service payments; as well as family remittance services and currency trading and/or exchange provided by providers.
- To the Ministry of the Family, Community, Cooperative and Associative Economy, the service of cooperative institutions within the framework of the functions, attributes and faculties that the Law grants it in these matters; and
- To the Ministry of the Promotion of Industry and Commerce in the cases of the complaints of users of non-regulated financial services by none of the previous Regulating Entities.
“Art. 54. On the rights of users of financial services
Users of financial services have the following rights, among others:
- To choose and access financial products or services in the environment of free competition offered by the different entities that provide financial services:
- To be notified in a verifiable way about the negative decision issued on the part of the financial entity about the contracting of products or services requested previously by the user, or about the cancelation or suspension of the contracts of those products or services. Those decisions must be based on explicit laws, norms or resolutions that for that purpose the respective Regulating Entity issues and/or on legally justifiable causes, which must be made known to the user, except in those cases established within the corresponding legal framework. Such decisions must be communicated in the terms stipulated in the current Law or in its absence, in the terms that the respective Regulating Entity sets, and cannot go beyond the affected person. Likewise, the financial entity must notify the Regulating Entities of financial services about said decision.
In the case of the decision of the unilateral cancelation or suspension of the products or services provided by the financial entity, the affected user will be able to present their complaint to the competent administrative bodies for the purpose of requesting the restitution of their rights, if the Regulating Entity thus decides. The right of the user remains intact to claim through the jurisdictional path possible damages or harm that were caused them, all in accordance with the Law on the matter.
“Art. 120 Application of sanctions
Infractions of the precepts of this law, its regulations and the rest of its related dispositions will be administratively sanctioned by DIPRODEC, or by the competent Regulating Entity, without affecting other corresponding penal and civil actions.
The sanctions of a temporary or definitive closure of the establishment will be applied by DIPRODEC, and will be subject to appeal with the Minister of the Ministry for the Promotion of Industry and Commerce.
For the imposition of the fines established in this chapter, DIPRODEC will apply the criteria of proportionality and gradualness, considering the seriousness of the infraction, transcendence of the deed, the record of the offender and the potential or real damage caused; for which it should be circumscribed to objective criteria to appropriately calibrate the sanction to impose.
The different Regulating Entities distinct from DIPRODEC who have not established by law the amounts of financial sanction in this matter, will be empowered to establish and carry out in their own internal norms the types of infractions and the amounts of the fines, applying for that the minimum and maximum ranges established in Articles 122, 123 and 124 of the current Law for slight, serious and very serious infractions.
For the imposition of fines in this matter, the Regulating Entities distinct from DIPRODEC will apply the criteria of proportionality and gradualness, considering the seriousness of the infraction, transcendence of the deed, record of the offender and the potential or real damage caused, for which it should be circumscribed to objective criteria to appropriately calibrate the sanctions to impose.
The imposed sanctions, including the temporary or definitive closure of the establishment, will be applied by the respective Regulating Entities distinct from DIPRODEC through the authority established in their legal regulations and will be subject to appeal to their corresponding hierarchical superior.”
Second Article: Addendum
Let paragraph 22 be added to Article 6 of Law No. 842, the Law for the Protection of the Rights of Consumers and Users, published in La Gaceta, Official Daily No. 129 of July 11, 2013, which will read in this way:
“Art. 6 Rights of consumers and users
Consumers and users will have the following rights, among others:
- To be notified by the providers in a verifiable way of the negative decision issued by the providers about the contracting of goods or services, requested previously by the consumer or user, or about the cancelation or suspension of the contracts for goods or services, except in the cases established in the corresponding legal framework. Said decisions must be legally and juridically justified and must be communicated in the terms stipulated in the current Law or in its absence, in the terms that the respective Regulating Entity establishes, and will not be able to go beyond the person affected. Likewise, the provider of goods and services must notify the Respective Regulating Entity about said decision.”
Third article: Adequacy of the Regulation
The Regulation of Law No 842, Law for the Protection of the Rights of Consumers and Users, must be adapted to what is established in the current law, all in accordance with what is established in paragraph 10 of Article 150 of the Constitution of the Republic of Nicaragua.
Fourth Article: Updating the regulations
DIPRODEC and the rest of the Regulating Entities must update their internal regulations for the application of the dispositions of the current law in a term no greater than 60 days counted from the date of its publication.
Fifth Article: Publication and validity
The current law will take effect based on the date of its publication in La Gaceta, the Official Daily.
Issued in the Session Hall of the National Assembly, in the city of Managua on the fourth day of February of the year two thousand twenty-one.
Deputy Loria Raquel Dixon Brautigam, First Secretary of the National Assembly
Therefore, regarded as Law of the Republic. Let it be published and implemented. Managua, the fourth day of February of the year two thousand and twenty-one. Daniel Ortega Saavedra, President of the Republic of Nicaragua.