The President of the Republic issued Decree 642 of May 11, 2020 , by means of which he regulated the procedures in charge of the state entities that are part of the General Budget of the Nation to recognize and pay as public debt the judgments and conciliations in arrears on May 25, 2019 (called “ Providence ”), which which includes the conclusion of a payment agreement with the Final Beneficiary of the loan.
For these purposes, state entities must publish on their website, no later than May 16, 2020 , a general invitation indicating the minimum requirements of the Decree, as well as contact directly, no later than on June 11, 2020 , to the Final Beneficiary of the Providence to invite him to enter into a payment agreement.
The Decree provides that the state entity is in charge of defining the maximum date for the Final Beneficiary to accept the conclusion of the payment agreement, without exceeding 31 of December 2020 .
Among the relevant aspects, the suspension of interest for 5 months after the subscription of the payment agreement, the requirement related to the withdrawal of the executive demand presented for the collection of the judgment or conciliation, after signing the payment agreement is highlighted. ; and the definition of criteria to determine the state entity that must carry out the process, in the event of solidarity or a collective conviction.
Once the state entity complies with the procedure provided for in the Decree , within the following 30 calendar days the Ministry of Finance and Public Credit will issue an administrative act ordering payment at a charge to the debt service item of the General Budget of the Nation , or through the issuance of TES class B Treasury Securities or through a combination of the two.
With the issuance of Decree 642 of 2020 , the mechanism is started so that the creditors of the judgments and conciliations covered by the norm effectively receive the payment, in turn serving as an instrument to reduce the impact tax derived from judgments and conciliations that constitute a true liability for the State.
In Gómez-Pinzón, our Group of Conflict Resolution and Investment Protection has an expert team in advising national and international companies for the presentation of payment requests before the state entity and the conclusion of the payment agreement for the collection of judgments or conciliations owed by the Colombian State, also counting on the support of our different areas of practice (corporate, tax, financial law, among others) in order to provide comprehensive advice to our clients. If you have any concerns regarding this matter, please do not hesitate to contact us.