Resolution No. JPRM – 2024 – 018 – M

Resolution No. JPRM-2024-018-M (“Resolution”), issued on September 4, 2024, by the Monetary Policy and Regulation Board (“JPRM”), enacted the “Regulation governing payment methods, systems and fintech activities in Ecuador.”

The Resolution, which replaces Resolution No. JPRM-2023-014-M (“Repealed Resolution””) introduces necessary reforms to ensure the application of the Law for the Development, Regulation, and Control of Technological Financial Services – Fintech Law.

The Resolution generally maintains the content of the Repealed Resolution; however, it introduces the following reforms:

  1. It modifies the concept of electronic wallets, establishing that these are payment methods that, through a technological application or online service on an electronic device, allow users to make payments, collections, and transfers and send and receive financial remittances in real-time.
  2. It defines the processing of electronic payment methods as the service provided by auxiliary service entities to banks, credit unions, and mutual savings and loan associations to process payment methods that allow their clients or members to make payments, collections, and transfers.
  3. It establishes that auxiliary financial service entities specifically authorized to provide electronic payment methods may operate electronic wallets.
  4. It establishes that fintech entities providing digital credits may also participate in the Auxiliary Payment Systems. Thus, the following are recognized as participants of the Auxiliary Payment Systems (“Participants”): financial entities, auxiliary service entities of the financial system (transactional, payment, network, and ATM services, and card administrators), fintech entities (neobanks and digital credit providers), specialized electronic deposit and payment companies (“SEDPES”), and Auxiliary Payment System Administrators (“ASAP”).
  5. It establishes that Clients shall be considered those natural or legal persons who enter a contractual relationship to use services offered by a Participant, whereas Users shall be those who utilize the services without having a contractual relationship with the Participant.
  6. It introduces the obligation for the Central Bank of Ecuador (“BCE”) to keep the registry of Participants updated and published, which will include details of the services each Participant provides.
  7. It establishes that Participants must allow Users to customize their maximum transaction amounts and implement due diligence controls and policies related to the frequency of daily payments they can execute.
  8. It introduces the obligation for Participants to inform Users about existing security measures and the available channels for resolving claims related to such events. Participants must ensure the privacy and security of the information provided by Users.
  9. The services that Participants may provide have been reformed and are now categorized according to the following: payment aggregation, payment gateway, electronic payment processing, transactional switch for payment services, money remittances, collection of public resources, and clearing.
  10. The Central Bank of Ecuador (BCE) must respond to Participants’ requests for operational authorization within 30 days. Furthermore, the process for terminating the administrative act by which the operational authorization is granted is established.
  11. The services that SEDPES may offer are expanded to include sending remittances and services established for Participants, which they can provide exclusively to their clients.
  12. The Superintendence of Banks is no longer required to issue a license or authorization for SEDPES activities.

General provisions of the Resolution establish the following:

  1. The reserve requirements for SEDPES must be met within three months of the operational authorization’s issuance.
  2. The BCE will notify the Office of the Attorney General of individuals or entities engaging in activities regulated by the Resolution without the corresponding authorization.
  3. All individuals or legal entities with a Tax Identification Number must offer their customers at least one electronic payment channel.
  4. The operational authorizations issued by the BCE to SEDPES or ASAP will be notified to the Superintendence of Banks and the Superintendence of Popular and Solidarity Economy for their knowledge.
  5. In-person transactions with credit, debit, prepaid cards, or electronic wallets must be conducted in the customer’s presence. To this end, establishments must ensure that the point-of-sale (POS) device is in a position that allows the customer to observe the insertion, swipe, or tap of the card.
  6. A license from the Superintendence of Banks will only be required in cases determined by the JPRM.

Within two months, the BCE will have to adjust existing regulations to incorporate provisions of the Resolution.

Within six months, the BCE will review the services provided by qualified Participants and classify them by the provisions of the Resolution.

 

Juan Fernando Riera, Associate at CorralRosales
jriera@corralrosales.com
+593 2 2544144

© CORRALROSALES 2024
NOTE: The above text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused by actions taken or not taken based on the information contained in this document. Any specific situation requires the specific opinion and advice of the firm.

CORRALROSALES

Ecuadorian Government Launches Tender for Electrical Interconnection with Peru

Through Press Bulletin No. 70 dated September 2, 2024, the Ecuadorian government, through the Ministry of Energy and Mines (“MEM”) and the Ecuadorian Electricity Corporation (“CELEC EP”), announced an international public tender for the development of several projects involving the construction of civil works, supply of materials, equipment, electromechanical assembly, testing, and commissioning of the 500-kilovolt (kV) Electric Interconnection System between Peru and Ecuador (the “Project”).

The tender is divided into two blocks:

  • Lot 1: The Pasaje Substation at 500/230 Kv and the expansion of the Chorrillos Substation at 500 Kv, with a reference value of approximately USD 80 million.
  • Lot 2: The Chorrillos – Pasaje Transmission Line at 500 Kv (206.97 km), the Pasaje – Border Transmission Line (500 Kv) spanning 77.88 km, and the sectioning of the Minas San Francisco – San Ildefonso Transmission Line at 230 Kv, with a reference value of USD 184 million.

All civil works, material supply, equipment, electromechanical assembly, testing, and commissioning of the Electric Interconnection System are expected to be completed by April 2026.

According to the schedule established by MEM, all bids must be submitted by Friday, September 22, and will be evaluated by December 2024. Contract signing will take place between January and March 2025. Finally, the Project is expected to begin operations between June and August 2026.

The Project will be financed by international banks and the Ecuadorian state. The Inter-American Development Bank (“IDB”) will finance 43%, and the European Investment Bank (“EIB”) will cover another 43%. The remaining 14% will be financed by CELEC EP. The Project already has the Environmental License, granted by the Ministry of the Environment, Water, and Ecological Transition (“MAATE”), a document necessary for obtaining financing and executing the required works.

This Project is part of the Master Electricity Plan, which considers international interconnection as a mechanism for energy exchange based on commercial agreements and regulatory frameworks for regional integration.

carlos-torres

Carlos Torres, Senior Associate at CorralRosales
ctorres@corralrosales.com
+593 2 2544144

© CORRALROSALES 2024
NOTE: The above text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused by actions taken or not taken based on the information contained in this document. Any specific situation requires the specific opinion and advice of the firm.

CORRALROSALES

Protection and processing of sensitive and confidential data in medical-occupational contexts

On July 11, 2024, the Constitutional Court issued Ruling 59-19-IN/24 (the “Ruling”), declaring Ministerial Agreement 0341-2019, titled “Application of Occupational Medical Records” (the “Agreement”), unconstitutional. The Court found that the Agreement and its related forms violated privacy and personal data protection rights.

From the Ruling, we highlight the following:

  • The Constitutional Court reviewed whether the State’s actions had a legitimate aim and whether the Agreement met the requirements of proportionality, suitability, and necessity when limiting workers’ rights to privacy and data protection.
  • The Ruling determined that there is no proportionality between the constitutionally valid aim and the challenged regulation, as it is contradictory and inappropriate to require workers to provide sensitive data (such as sexual orientation, gender identity, and religion).
  • Based on these grounds, considering that the Agreement creates an illegitimate limitation on workers’ rights, and given that this information is not directly related to the performance of the worker’s duties or the specific needs of the job, the Constitutional Court declared the Agreement unconstitutional.
  • From the publication of the Ruling in the Official Gazette (which has not occurred as of the date of this bulletin) and until the adoption of new regulations on the application and management of Occupational Medical Records, occupational physicians, public or private entities, as well as the national health authority, will not be able to request workers to provide data related to sexual orientation and gender identity. Data concerning religious beliefs will be optional.

 

Rafael-Serrano-abogados-ecuador

Rafael Serrano, Partner at CorralRosales
rserrano@corralrosales.com
+593 2 2544144

María Victoria Beltrán, Senior Associate at CorralRosales
mbeltran@corralrosales.com
+593 2 2544144

© CORRALROSALES 2024
DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused because of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

CORRALROSALES