admin23Public Law & Compliance
When people hear “conflict of interest,” the reflex is to think of the public official. Executive Decree 77 of October 27, 2026, which regulated Law 316 of 2022, forces that reflex to be corrected: the duties to declare, prevent and abstain are no longer only the public servant’s. They now reach —with concrete deadlines and penalties— the companies that contract with the State, their directors, shareholders, attorneys-in-fact and beneficial owners, and the non-profit organizations that receive public funds. And the clock is already running: the rule takes effect ninety days after its promulgation.
1. What changed: from public office to private business
Law 316 of 2022 set the framework to prevent, identify and sanction conflicts of interest in public office. What was missing was the regulation to make it operational. That regulation arrived with Executive Decree 77, published in Official Gazette No. 30643.
The relevant novelty is not that the official is regulated —that was expected— but that the regime extends over the private sector that deals with the State. For a supplier company, for whoever sits on a board of directors, or for whoever is listed as the beneficial owner of a contractor company, conflict of interest has stopped being someone else’s matter and has become their own obligation.
2. Who does it actually reach?
The regulation defines three groups of obligated parties. The third is the one that brings the private sector into the equation.
| Group | Who becomes obligated |
|---|---|
| Public sector | Ministers, vice-ministers, heads of entities, municipal authorities, handling officials and senior authorities, including deputies, magistrates, judges and prosecutors. |
| NGOs | Board members of organizations that have received or receive funds, capital or assets from the State. |
| State contractors | Individual awardees, and board members, officers, shareholders, beneficial owners and attorneys-in-fact of companies awarded public tenders. |
One important nuance avoids alarmism: for these purposes, the regulation covers public tenders for goods, works and services above B/.50,000. Not every company that once sold to the State is automatically covered; the criterion is the threshold and the status of awardee.
3. What it requires: the sworn declaration and its deadlines
The core of the regime is a sworn declaration of interests. Its content is broad: professional, economic and trade-association activities; business relationships; corporate holdings; public contracts; and relevant family ties.
The deadlines are concrete and worth noting now:
- Initial filing within 30 business days of becoming subject to the obligation.
- Annual renewal during the first 10 days of the year.
- Final declaration upon ceasing to be an obligated party.
- In public procurement, one declaration per tender awarded: it is a contractual obligation and a requirement for endorsement.
This last point has an immediate practical effect: without the declaration, the contract is not endorsed. It stops being a later formality and becomes a condition of the relationship with the State.
4. Which conflicts it regulates: actual, potential and apparent
The regulation is not limited to the consummated conflict. It distinguishes three categories —actual, potential and apparent conflicts— and regulates their consequences: disqualifications, duties to abstain, and the treatment of gifts and invitations.
The inclusion of the apparent conflict is significant: it does not require that the private interest actually influenced the decision; it is enough that, to a reasonable observer, it could appear to have done so. The standard, therefore, is not only the honesty of the conduct, but also its appearance of impartiality.
5. Oversight and penalties
Verification does not stay on paper. The regulation empowers ANTAI to cross-check the declared information with the Public Registry, the Directorate General of Revenue (DGI), the Public Procurement system and, under the conditions the law allows, the beneficial-owner registry. It is, in practice, the convergence of several registries that until now operated separately.
| Type of breach | Penalty |
|---|---|
| Defective declaration | Fine equivalent to two months of salary. |
| Omitted declaration | Fine equivalent to three months of salary. |
| False declaration | Fine equivalent to four months of salary. |
To the fines are added, as applicable, disciplinary, criminal and contractual consequences. For a company, the risk is not merely financial: a poorly managed declaration can compromise the endorsement of a contract and the commercial relationship with the State.
6. What to do before the 90 days run
The window until the rule takes effect is the chance to prepare, not to react. A minimum recommended order:
- Map the exposure: identify whether the company contracts, or could contract, with the State above the B/.50,000 threshold.
- Identify the obligated parties within the group: directors, officers, shareholders, attorneys-in-fact and, especially, the beneficial owners.
- Verify registry consistency: that what is declared matches the Public Registry, the DGI and the beneficial-owner registry, because that is where ANTAI will cross-check.
- Design an internal protocol: who declares, when, with what supporting documentation, and how it is updated each year and for each tender.
This article is for general information purposes only and does not constitute legal advice. The specific scope of Law 316 and Executive Decree 77 over a particular company or person requires individualized analysis and must be confirmed against the text published in Official Gazette No. 30643.
Conclusion: transparency is no longer optional
Executive Decree 77 closes a gap that had been open for years: it turns a general principle —not mixing private interest with public decision— into concrete obligations, with deadlines, information cross-checks and fines, that now also weigh on the private sector benefiting from State contracting.
For companies, the question is not whether the rule reaches them, but whether they will arrive at the 90-day mark with their structures, their beneficial owners and their declarations in order. Those who prepare today will declare calmly; those who leave it for later will do so under the pressure of a contract at stake.
Does your company contract with the State or take part in public tenders? At EDTIJ we review your exposure to Law 316 and prepare your conflict-of-interest declarations and protocols.