RESTRICTED
WORLD TRADE S/FIN/W/12/Add.45
5December 1997
ORGANIZATION(97-5363)
Original: Spanish Committee onTrade inFinancial Services
COMMUNICATION FROM NICARAGUA
Initial Offer onFinancial Services
Addendum
Thefollowing communication iscirculated attherequest ofNicaragua tothemembers ofthe
Committee onTrade inFinancial Services.
______________
Thisinitial offer, which contains newactivities, suchasinsurance, andagreater number of
subsectors inthefieldofbanking, substantially liberalizes financial services inNicaragua andensures
comprehensive access forforeign suppliers ofthose services.
Theofferisconditional upon asatisfactory outcome ofthenegotiations, anditsmaintenance
willdepend onthelevelofcommitments undertaken bytheother WTO Members.
Nicaragua reserves therighttomodify orwithdraw allorpartofthisinitial offeratanytime
priortotheconclusion ofthenegotiations, inaccordance withtheSecond Decision onFinancial Services
of21July1995 asamended bytheDecision of29May1997.
Nicaragua alsoreserves therighttomake technical changes toitsofferandtocorrect anyerrors,
omissions orinaccuracies initatanytimeprior totheconclusion ofthenegotiations.S/FIN/W/12/Add.45
Page2NICARAGUA
INITIAL OFFER OFFINANCIAL SERVICES
Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
7. FINANCIAL SERVICES
A. Insurance and
Insurance-Related Services
Lifeinsurance (excluding
pension funds) (CPC 8121)
Non-life insurance
(CPC 8129)
Reinsurance and
retrocession (CPC 81299*)Insurance andreinsurance activities canonly
beexercised bylegal persons established and
domiciled inthecountry through public limited
companies, subject tothelegal regime
applicable tosuch companies andtothe
General LawonInsurance Institutions, and
having obtained therequired authorization
from theGoverning Council oftheOffice of
theSupervisor ofBanks. They arealso
subject totheLawCreating theOffice ofthe
Supervisor ofBanks andtotheResolution
authorizing their establishment andoperation.
Services auxiliary to
insurance (including
brokerage andagency
insurance services)
(CPC 8141)Foreign-owned companies aresubject tothe
same obligations asdomestic companies, and
maynotresort todiplomatic channels inany
matter relating totheir operations inthe
country.
Insurance companies mayengage, in
Nicaragua, onlyininsurance andreinsurance
activities specified intheResolution
authorizing their establishment andoperation,
andintheinvestment oftheir capital and
reserves forpurposes permitted under the
Law.S/FIN/W/12/Add.45
Page3Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Prior authorization from theOffice ofthe
Supervisor ofBanks isrequired forthe
initiation ofoperations byinsurance entities or
forentering anewbranch ofinsurance.
(1) Unbound
(2) Unbound
(3) Insurance institutions must invest their
capital, capital reserves andother
reserves inassets laiddown bytheLaw.
TheGoverning Council oftheOffice of
theSupervisor ofBanks isresponsible
fordetermining thepercentages of
reserves thatmaybeinvested abroad.(1) Unbound
(2) Unbound
(3) None
Insurance institutions established inthe
country, whether domestic orforeign,
must have minimum capital holdings in
thefollowing amounts:
(1)Forcausality insurance companies,
US$1,200,000;
(2)forlifeinsurance companies,
US$1,200,000;
(3)forinstitutions operating inboth
branches, US$2,000,000.
TheGoverning Council hasthelegal
authority tomodify theminimum
amounts required forinsurance
companies tooperate, andtheamounts
maybeexpressed innational currency.S/FIN/W/12/Add.45
Page4Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Anatural orlegal person mayonlyissue
insurance policies pending an
authorization orlicence todosoandif
thetransaction iscovered byasecurity
oraguarantee inanamount setbythe
Office oftheSupervisor ofBanks.
Insurance brokers areenterprises
established inNicaragua andengaging
either individually orascommercial
companies, intheir ownname andfor
their ownaccount, innegotiating and
obtaining insurances inNicaragua inthe
name ofinsurants other thanthemselves,
issued byanyoftheinstitutions referred
tointheGeneral LawonInsurance
Institutions anditsRevision. They are
subject totheprovisions ofthe
Commercial Code ofNicaragua inall
matters thatareapplicable tothem and
notcovered bythelaw.
(4) Unbound, except asindicated inthe
horizonal commitments.(4) Unbound, except asindicated inthe
horizonal commitments.S/FIN/W/12/Add.45
Page5Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
B. Banking andOther
Financial Services
(excluding insurance)
Acceptance ofdeposits and
other repayable funds from
thepublic (CPC 81115)
Other bank deposit services
(CPC 81116)
Other deposit services
(CPC 81119)
Financial leasing with
option topurchase
(CPC 8112)
Lending ofalltypes,
including consumer credit,
mortgage credit, factoring
andfinancing of
commercial transactions
(CPC 8113)
Allpayment andmoney
transmission services
(CPC 81339**)Anyprivate bank established inNicaragua
must besetupandoperated asapublic limited
company inconformity withtheGeneral Law
onBanks andOther Financial Institutions, and
withtheLawcreating theOffice ofthe
Supervisor ofBanks, theCommercial Code
andtheother laws applicable tosuch
companies totheextent thattheyhave not
been modified bytheGeneral LawonBanks
andOther Financial Institutions.S/FIN/W/12/Add.45
Page6Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Guarantees and
commitments ofafinancial
nature (CPC 81199**)
Foreign exchange
(CPC 81333)(1) Unbound
(2) Unbound
(3) Banks thatarelegally constituted abroad
mayonlyoperate inthecountry by
setting upabranch office.
Theminimum share capital forabank is
US$2,000,000 ortheequivalent thereof
innational currency, wherever thebank
isestablished within thecountry. This
amount maybemodified bythe
Governing Council oftheOffice ofthe
Supervisor ofBanks.
Branches offoreign banks must appoint a
proxy, whosubmits theapplication to
operate inNicaragua totheOffice ofthe
Supervisor ofBanks together withthe
authentic documentation proving thatthe
bank isauthorized tooperate inits
country oforigin andthatthelaws ofthat
country allow ittoopen branches in
Nicaragua.
Branches offoreign banks areconsidered
tobedomiciled inNicaragua foralllegal
purposes andaresubject tothelaws of
thecountry, without recourse to
diplomatic channels inanymatter relating
totheir operations inthecountry.(1) Unbound
(2) Unbound
(3) NoneS/FIN/W/12/Add.45
Page7Modes ofsupply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Branches offoreign banks maynot
announce orindicate theamount of
capital andreserves heldbytheparent
bank without announcing orindicating, at
thesame time, theassigned capital and
reserves ofthebranch inNicaragua.
Thecapital ofbranches offoreign banks
authorized tooperate inthecountry may
beregistered inaccordance withtheLaw
onForeign Capital Investment of
Nicaragua.
(4) Unbound, except asindicated inthe
horizontal commitments.(4) Unbound, except asindicated inthe
horizontal commitments.S/FIN/W/12/Add.45
Page8NICARAGUA -LIST OFARTICLE II(MFN) EXEMPTIONS
Sector orsubsector Description ofmeasure indicating its
inconsistency with Article IICountries towhich the
measure appliesIntended duration Conditions creating theneed forthe
exemption
Financial services Monetary andfinancial integration,
freetransfer ofcapitalGuatemala, ElSalvador,
Honduras, Costa Rica and
NicaraguaIndefinite TheTreaty onCentral American
Integration anditsrelated instruments
provide forprogressive integration in
different economic areas, including
services ofvarious kinds.