The effective implementation of administrative and financial sanctions is necessary for the proper functioning of the enforcement of the Decretal Federal Law No. (14) of 2018 Regarding the Central Bank & Organization of Financial Institutions and Activities as amended (the Central Bank Law).

The Central Bank Law set out the administrative and financial sanctions to be applied to Licensed Financial tostitutions. Those sanctions apply to all violations under the Central Bank Law and require a reasoned assessment of the appropriate sanction and the level at which it is to be applied٠ However, some violations, by their very nature, do not require such an assessment, as the responsibility on the Licensed Financial Institution to comply with the legal requirement does not necessitate any excuse or explanation, except in case of an event of force majeure. Such violations are strict liability violations.

Strict liability is imposed on elements of a variety of regulatory obligations. Typically, such obligations relate to routine, administrative activities that have to be performed often, if not at appointed periods of time. The repetitive nature of the activity does not however belie its importance on the regulatory obligation of the Licensed Financial Iostitutions.