Colombia Factoring Decree Loses Six Articles in Court
Colombia's top administrative court annulled six articles of Decreto 2669 de 2012, which regulated factoring, for exceeding executive authority. The ruling leaves the rest of the decree intact, including anti-money-laundering duties. The post Colombia Factoring Decree Loses Six Articles in Court appeared first on The Rio Times .
Colombia's top administrative court, the Consejo de Estado, has struck down six articles of the 2012 Colombia factoring decree, ruling that the government overstepped its authority in regulating the factoring industry. The court found that the decree, Decreto 2669 de 2012, exceeded its regulatory power under Ley 1231 de 2008, which allowed commercial invoices to become negotiable instruments to help small businesses access financing.
The annulled articles, specifically articles 2, 3, 4, 5, 12 and 13, defined factoring operations, allowed parties to insure against non-payment, regulated discount rates, governed assignment clauses, limited factors' funding, and listed prohibited operations. The remaining articles, 1, 6, 8, 9, 10, 11 and 14, will continue to apply.
The ruling emphasizes that decrees can shape laws but cannot create new regulations for Congress. Factors' directors will remain responsible for compliance with article 8 of Ley 1231 de 2008, and the Superintendencia de Sociedades will continue to supervise factoring companies and maintain a register of factors. Despite the annulment, the core regulatory framework for factoring companies remains, and the legal basis for factoring remains intact.
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