The ISDA Master Agreement is a broad contract that establishes the general contracting conditions between parties wishing to trade over-the-counter (OTC) derivatives, and can be used to perform swaps or exchanges of currencies, securities, stocks and even interest rates, as well as other derivatives that may be subject to OTC transactions.

Although the Foreign Exchange Forward is covered by the ISDA Master Agreement, this type of transactions are regulated in Paraguay by the Foreign Exchange Forward Transactions Regulations. A condition of said Regulations that deserves special consideration is that disputes arising between the parties to a transaction of this type must be settled before the Courts of Asuncion whenever the transactions are with residents of the country.

However, the ISDA Master Agreement as drafted and published provides for the possibility of choosing between two laws, that of New York or that of the United Kingdom; but the aforementioned Regulation does not refer to the applicable law, but only to the jurisdiction. This is very relevant considering the great differences of the Anglo-Saxon legal systems vis-a-vis the Paraguayan legal system.

For more information, please see the attached file. 

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