DIRECT PROHIBITIONS AND COMMERCIAL INCOMPATIBILITIES
RESTRICTIONS BASED ON FUNCTIONAL CONNECTION
The Commercial Code (Art. 19.4) prohibits public officials from engaging in commercial activities related to their official duties. If they do so regardless, they are considered merchants only for the purpose of civil liability and may face criminal penalties (Art. 24).
IMPROPER USE OF STATE TIME AND PROPERTY
CONTRACTING WITH THE STATE
The Constitution (Art. 236.2) prohibits public servants from entering into contracts with state entities, directly or indirectly. This aims to prevent conflicts of interest and acts of corruption.
CONFLICTS OF INTEREST AND OTHER FUNCTIONAL RESTRICTIONS
REPRESENTATION OR ADVICE TO PRIVATE PARTIES
According to the Public Servant Statute (Art. 10), public officials may not advise, manage, or represent individuals or companies conducting procedures before the administration. Furthermore, Articles 9.6 and 9.7 prohibit participation in administrative matters with personal interest or the pursuit of undue benefits.
CONTRACTUAL INCOMPATIBILITIES
Article 11.1.2 of the Statute forbids engaging in business or contracts related to the official’s responsibilities. The Constitution (Art. 237.3) also deems it incompatible to exercise a profession linked to entities with contractual ties to the State.
PROHIBITION ON RECEIVING BENEFITS
Public officials are not allowed to accept gifts, benefits, or gratuities intended to influence administrative decisions (Public Servant Statute, Art. 14).
LEGAL CONSEQUENCES OF NON-COMPLIANCE
NULLITY OF ACTS
The Civil Code (Arts. 44.II, 555.I.1, 1544) and the Constitution (Art. 122) declare null and void any acts that violate legal prohibitions. For example, a public official cannot acquire assets they manage on behalf of the State.
CRIMINAL LIABILITY
Law No. 004 outlines severe penalties:
- Illicit enrichment (Art. 29): up to 10 years in prison.
- Incompatible negotiations (Arts. 149 and 150 Bis): up to 10 years.
- Breach of duties (Art. 154): up to 4 years.
- Unlawful advantages (Art. 228): up to 8 years.
- Fictitious companies (Art. 229) and receipt of illicit goods (Art. 172 Bis): penalties of up to 4 and 8 years respectively.
- Culpable or fraudulent bankruptcy (Commercial Code, Arts. 1656 and 1657): both civil and criminal liability for negligent or fraudulent merchants.
STATE PROPERTY PROTECTION MECHANISMS
PREVENTIVE ANNOTATIONS
The Civil Code (Arts. 1552.I.6 and 1553.III) allows the Attorney General’s Office and the Ministry of Transparency to request preventive annotations to safeguard state assets.
ACCESS TO FINANCIAL INFORMATION
Law No. 004 (Arts. 20.II and 21.I) authorizes the Financial Investigations Unit (UIF) to request financial information from institutions and individuals involved in corruption investigations.
INVIOLABLE CHARACTER OF PUBLIC ASSETS
The Constitution (Art. 338.II) declares that state assets are inalienable, non-seizable, and cannot be used for private benefit.
In conclusion, the exercise of private entrepreneurship by public officials in Bolivia is strictly limited by constitutional, civil, commercial, and criminal regulations. Non-compliance with these rules may result in nullified actions, financial sanctions, loss of office, and criminal liability. When in doubt, it is highly advisable to seek legal counsel to avoid violations.
If after reading this article you believe you need legal guidance on the matter, contact one of our specialized attorneys. We are here to help.
Frequently Asked Questions (FAQs)
Can a public official own a company?
Yes, but only if the company’s activities are not functionally related to their public duties and it does not contract with the State. Even then, conflicts of interest must be strictly avoided.
Can a public official offer private consulting services?
No, not if the services are related to procedures before the public administration.
What happens if a public servant signs a contract with a state entity?
It constitutes a constitutional violation. The act may be nullified and could lead to criminal liability and disqualification from office.
Can a public official use state resources for their business?
No. Misuse of public goods is a criminal offense.
Is a public official required to declare their assets?
Yes. Officials must submit sworn declarations. The UIF has the authority to investigate their financial situation.
The content of this article does not reflect the technical opinion of Rigoberto Paredes & Associates and should not be considered a substitute for legal advice. The information presented herein corresponds to the date of publication and may be outdated at the time of reading. Rigoberto Paredes & Associates assumes no responsibility for keeping the information in this article up to date, as legal regulations may change over time.
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- CONTRACTS BETWEEN PRIVATE INDIVIDUALS AND THE STATE: VALIDITY AND APPLICABLE LEGAL FRAMEWORK IN BOLIVIA
- CONTROL OF ILLEGAL OR UNAUTHORIZED FINANCIAL ACTIVITIES IN BOLIVIA
- LEGAL REQUIREMENTS TO ESTABLISH AN NGO IN BOLIVIA
- RIGHT TO DEFENSE IN ADMINISTRATIVE PROCEEDINGS IN BOLIVIA
