Politics - May 20, 2026, 6:49 PM

Paraguay’s Chamber of Deputies Passes Law Against ‘Promissory Note Mafia’ but Excludes Electronic Documents

Paraguay’s Chamber of Deputies approved a bill requiring original credit instruments to be deposited with the courts and returned to the debtor after the debt is paid, aiming to combat the scheme known as the ‘Promissory Note Mafia.’ However, the final version excluded electronic promissory notes, contrary to a recommendation from the Supreme Court. A second bill, imposing a 20% fine on creditors who fail to return documents within five days, passed in general and will be reviewed article by article next week.

Câmara dos Deputados do Paraguai enfrenta prazo final para aprovar lei contra a 'Máfia dos Pagarés'

Paraguay’s Chamber of Deputies approved and sent to the executive branch a bill establishing a judicial deposit regime for original credit instruments or documents in civil proceedings. The measure is a legislative response to the criminal scheme known as the ‘Promissory Note Mafia,’ which is said to have made about 17,000 victims. The approved text determines that promissory notes and other original collection documents remain under court custody during the process and are returned to the debtor once the debt is paid, preventing the same instrument from being executed more than once.

The bill was developed in conjunction with the Supreme Court, which recommended including electronic promissory notes, considering that this modality is expanding. However, the Cartista majority in the lower chamber adhered to the Senate version, which does not cover digital documents. Deputy Héctor ‘Bocha’ Figueredo (ANR) justified the exclusion by arguing that electronic executive instruments still lack clear regulation and that their inclusion could generate conflicts. The decision was criticized by sectors pointing out that the loophole could be exploited by the criminal scheme.

Separately, deputies approved in general, and postponed for a week the article-by-article analysis, a second bill that establishes the return of promissory notes upon extinction of the obligation and provides a sanctioning regime. The proposal, which already has approval by the Senate, requires creditors to return the documents within five business days after payment of the debt, subject to an administrative fine of 20% of the total obligation amount. Deputy Néstor Castellano (ANR) highlighted that the measure aims to curb the practice of retaining already paid promissory notes to resell them or execute them judicially again.

The leader of the Cartista bench, Miguel Del Puerto, requested postponement of the detailed study to introduce unspecified ‘small modifications.’ If changes are made, the bill will need to return to the Senate for a third legislative procedure. The Chamber’s Board of Directors gave priority to the issue, which has automatic approval scheduled for June 2.