Reform to the Instructions for the Prevention, Detection and Control of Money Laundering and the Financing of Terrorism and the Financing of the Proliferation of Weapon Mass Destruction
By: Norma Villalobos
The Attorney General's Office of the Republic, through Agreement No. 476 dated September 05 of this year 2023, approved reforms to the Instructions for the Prevention, Detection and Control of Money Laundering and Financing of Terrorism and the Financing of the Proliferation of Weapons of Mass Destruction, which will come into effect eight days after their publication in the Official Gazette; Therefore, we urge you to pay attention to the corresponding publication.
The approved reforms to the instructions are summarized below:
- The obligation of the highest governing body of the obligated subjects is reiterated, to know the reports presented by the Internal and External Audit, related to LDA/FT/FPADM prevention and to instruct whoever corresponds, to implement the actions to timely correct the observations. or recommendations adopted. Compliance with this obligation must be recorded in the corresponding Book of Minutes of the obligated subject.
- The obligation of the Internal Audit of the obligated subjects to evaluate at least once a year the compliance and effectiveness of the applicable standards, policies and procedures for the prevention of LDA/FT/FPADM is emphasized, and must issue a report of the results. to the highest governing body or whoever takes its place.
The instructions indicate that, in those cases where the obligated entity does not have an internal auditor, the evaluation must be carried out by the External Auditor appointed in accordance with the provisions of the Commercial Code, who must inform the aforementioned Body by means of a management letter.
- The External Auditor of any company, company or entity of any type, national or foreign, that makes up a financial institution, group or conglomerate supervised and regulated by the Superintendence of the Financial System must include in its annual work plans, the evaluation of management and the legal provisions applicable to the prevention of LDA/FT/FPADM and inform the Board of Directors, Senior Management and Compliance Officer on any matter that is known to them in relation to the risks of LDA/FT/FPADM.
- It is added as a standard due diligence measure that the obligation to verify the entity of the client or user is always carried out before establishing the commercial relationship, through official documents issued by the competent public authorities. Likewise, it is established that the identification for legal entities or other legal structures includes: Name, main address in the country, as well as the documents with which it proves its legal existence and names of the people who occupy a position in senior management within the legal person or legal entity.
- It is added as an intensified due diligence measure for counterparties and clients classified as high risk, to obtain the approval of the agency's senior management to establish or continue commercial relationships with those clients or counterparties classified as high risk or categorized as PEP ( Politically Exposed Persons) and their families.
- Article 14-A is incorporated, which establishes that due diligence measures must be applied by obligated subjects according to the LDA/FT/FPADM risk level of their clients or users, as long as any of the following occurs. following circumstances:
- When indicating commercial relationships;
- When its clients or users carry out occasional transactions above the thresholds established in Art. 51 of the Instructions;
- When clients or users carry out occasional transactions through electronic transfers;
- There is suspicion of Money Laundering or Financing of Acts of Terrorism; either
- There are doubts about the veracity or accuracy of the client's identification data previously obtained.
Said provision indicates the obligation to alert the client when suspicion is generated that there may be Money Laundering or Financing of Acts of Terrorism; and must proceed in accordance with the provisions of chapters VII and VIII of Title II of the Instructions; and if the customer due diligence measures cannot be applied, the obligated subjects may terminate the commercial relations with said customer.
Likewise, the provision establishes that the obligation to apply due diligence measures corresponds to the obligated subjects and cannot be delegated to third entities..
- Article 21-A is incorporated, which imposes the obligation to identify and verify the identity of the final beneficiary of legal persons or structures. obtaining the identity of the legal person or entities that, ultimately, are those that have the majority shareholding of the legal entity and for trusts: the identity of the trustor, trustees, protector (if any), beneficiaries and any other natural person who exercises effective and definitive control over the trust.
- Article 21-B is added by which obligated entities that provide life insurance products or other types of insurance policies linked to investments are instructed to apply additional measures to identify final beneficiaries and politically exposed persons.
- The control and identification measures of the subjects involved in electronic transfers are intensified, including those that do not exceed the thresholds established by Law.
- The requirement to have an academic degree at the university level is eliminated for the Compliance Officer of commercial companies, non-profit associations and foundations and other subjects expressly indicated in the reform; as well as for obligated subjects that carry out designated non-financial activities and professions (APNFD).
The complete content of the approved reforms can be consulted in the attached document.