The Organic Law for Public Integrity, approved by the National Assembly and ratified by the President of Ecuador, was published in the Third Supplement of Official Gazette No. 68 on June 26, 2025.
The crux of the law is to ensure that citizens receive public services promptly and efficiently and to a high standard of quality, by means of complete and transparent procurement processes.
One of the most important aspects of this reform is the guarantee of sustainability and efficacy of control and accountability systems, explicitly integrating collaboration with State supervisory agencies. This cooperation seeks to reinforce supervision in all stages of procurement to prevent offences being committed.
Also, for the first time, the law directly incorporates the obligation to prevent and combat money laundering, corruption and other forms of organized crime which may infiltrate the National Public Procurement System (known by the Spanish acronym SNCP).
The law redefines the governing principles of the National Public Procurement System, prioritizing integrity, efficiency, transparency, technological innovation, inter-institutional coordination and a decided fight against corruption.
The law also incorporates tax, financial and public service reforms. Some of the most significant changes established by this law are:
Public Procurement:
- Exclusions, changes to procedures and thresholds
The procurement regime for non-profit and social purpose entities is excluded for procurements of up to USD 20,000 per tax year, under social cooperation agreements.
Consultancy services worth more than USD 10,000 shall be procured by means of a public tender; those worth USD 10,000 or less shall be procured by means of a below-threshold process.
- Public procurement portal with an ethical focus, and supported by open data from other entities
This law focuses on the monitoring of the integrity of procedures and contracts arising from the law.
The reform encourages cooperation between institutions and establishes an approach that brings together the different entities responsible for control for all stages of procurement.
Additionally, the public procurement portal will incorporate open data and artificial intelligence for predictive analysis and automated early alerts. It also enhances security, traceability and auditing, requiring documentation to be published with a date and time.
- Expansion of the role of SERCOP and its board of directors
The new law significantly strengthens the role of the national public procurement service (SERCOP). In addition to its technical and regulatory role, it now has enhanced powers to regularly train contracting entities, coordinate with vocational training institutions, supervise citizen watchdogs, sanction suppliers, suspend registered suppliers, set tariffs for services, and exercise control and enforced collections.
- Financing of SERCOP
The law provides for the inclusion of fees, rates and special contributions for suppliers prior to awards.
- The Register of Suppliers (RUP)
The law introduces incentives for suppliers who report verified acts of corruption in the public procurement system, granting them a higher score in the register of suppliers (RUP) and access to preferences in future processes.
It also requires more specific identification of the type of supplier (manufacturer, vendor, importer, etc.), which improves classification and control.
- Electronic catalogue and exceptions
Contracting entities must consult the Electronic Catalogue (a digital register of suppliers and goods) before beginning any other process. They may only procure outside of the catalogue if the external offer is a better price by at least 5% and meets all the technical and quality standards.
- Electronic reverse auction and competitive bidding
The electronic reverse auction for non-catalogued goods and services with a threshold above USD 10,000 remains in place.
Competitive bidding will be used when the auction is not suitable and the good or service is not in the catalog.
- Below-threshold procurement
This is strictly regulated to avoid the fragmentation of contracts and evasion of precontractual procedures.
- Declaration of public use and expropriation
The reform expands and details the procedure for making a declaration of public use.
The law prioritizes reaching a direct agreement with the owner; if an agreement is not reached, the entity can go through the courts to request possession of the asset based on the official appraisal. The law establishes the right to challenge the valuation and the payment, as well as grounds for the reversion of the expropriated asset. It also contemplates special rules for projects under public-private partnerships and for transfers between public entities.
- Contracts
The reform establishes that the contract manager is not responsible for the technical performance of the contract; any exceeding of power by the contract manager generates civil and administrative liability.
In addition, the contracting entity has an obligation to respond in writing to the contractor’s requests within 10 days at the latest.
The contracts must include mandatory clauses such as a declaration by the contractor not to commit illegal practices, and payment processes and timeframes. If there is an unjustified late payment by the contracting entity, it cannot demand progress in the performance of the contract, and the liability will fall on the entity and its officers, who will be subject to administrative, civil or criminal penalties, as applicable.
- Guarantees
The new law eliminates the possibility of providing guarantees through real estate mortgages and various financial instruments and government securities, limiting the forms of guarantee to bank guarantees, insurance policies, and time deposit certificates. It also redefines advance payment bonds and technical guarantees.
What are the next steps?
SERCOP must review and update the Electronic Catalogue and its suppliers within 180 days.
The General Regulations for the Organic Law on the National Public Procurement System will be issued in 45 days.
The Public Procurement Portal and technological systems must be adapted within 120 days from the publication of the Regulations.
- Tax Reforms:
1. Interest for taxpayers
The Law amends Article 22 of the Tax Code, which refers to the interest that the State recognizes in favor of taxpayers. Prior to the reform, balances in favor of taxpayers generated interest equivalent to 100% of the 90-day benchmark lending rate set by the Central Bank of Ecuador.
With the entry into force of the Organic Law on Public Integrity, the applicable interest rate is reduced to 50% of that benchmark rate. In addition, it is established that interest will be calculated from the date on which the refund request or corresponding claim is filed until notification of the administrative decision resolving the matter.
Likewise, it is provided that if the Tax Authority decides to suspend the processing of a refund procedure in order to make a supplementary assessment under Article 131 of the Tax Code, no interest will accrue during the period of suspension.
2. Remission of tax interest, fines and surcharges
A new regime for the remission of interest, fines and surcharges is introduced, applicable to taxpayers who pay all or part of the principal of their outstanding tax obligations to the Ecuadorian Tax Authority, generated up to December 31, 2024. The waiver applies to 100% of the interest, fines, costs and surcharges derived from such obligations, and includes procedural costs, bonds, and/or guarantees that may have been incurred by the taxpayer.
This benefit will only apply if the corresponding principal is paid by December 31, 2025.
Remission is also provided for in cases where the taxpayer has made payments that, when added together, equal the principal of the obligation, in which case the remaining interest, fines and surcharges are forgiven.
Income tax for the 2024 fiscal year is expressly excluded from this remission.
- Financial Reforms:
The Law amends the Organic Code for Planning and Public Finance. The most relevant changes are:
- National state-owned companies and the Central Bank of Ecuador are authorized to participate in risk hedging operations for raw material prices via derivatives, risk insurance, or other mechanisms. The price of these products will be set by the markets and, furthermore, failure to execute a hedge will not be considered a loss to the State for the value paid for it.
Reforms are made to the Organic Monetary and Financial Code, the most relevant being:
- It is provided that the Monetary Policy and Regulation Board and the Financial Policy and Regulation Board shall once again be combined into a single entity, the Financial and Monetary Policy and Regulation Board.
- This entity will be responsible for formulating monetary, credit, financial, securities, insurance and comprehensive health care policies and regulations.
- The terms of the current members are terminated.
- The President of Ecuador will send a list of candidates to the Assembly for the appointment of the members of the new entity. The first members will be named. The Assembly will have fifteen days to make a decision, or they will be appointed.
- The functions of the new entity once it is formed are established.
- It is established that the Central Bank of Ecuador may take out liquidity credits and contingent liquidity credits on its own behalf.
Lastly, the eleventh general provision of the Law establishes that the Financial and Monetary Policy and Regulation Board, within 90 days of its new members taking office, shall issue regulations to identify savings and credit cooperatives that, in order to protect savers and depositors, must be transformed into corporations under the control of the Superintendency of Banks.
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