Published legislation and draft legislation - Uruguay
New anti-money laundering and combating the financing of terrorism legislation
At the end of last year the comprehensive law against money laundering and the financing of terrorism (Act 19754) was passed in Uruguay. This new law consolidates all the country’s legislation -previously disperse- into a single document on anti-money laundering and combating the financing of terrorism, while also incorporating into this legislation the latest recommendations from the Financial Action Taskforce (FATF). We consider the most important amendments below:
A Commission to coordinate anti-money laundering and combating the financing of terrorism (“the Commission”) has been set up, reporting to the Office of the Presidency of the Republic. Its responsibilities include developing and rolling out an information network to support the work of the public authorities, and producing statistics and indicators to review the effectiveness of the system on a regular basis.
The Commission may propose that financial countermeasures and sanctions be imposed on countries that are considered to pose a high money laundering risk.
The law also refers to other public bodies, such as the National Secretariat for Anti-Money Laundering & Combating the Financing of Terrorism, which will also report into the Office of the Presidency of the Republic and will have technical autonomy. Among its functions, it will be in charge of: i) designing the general action plan in the battle against money laundering and the financing of terrorism, ii) preparing and coordinating the enforcement of national policies, iii) defining training programs, iv) monitoring compliance with AML/CFT regulations, v) reaching agreements with national and international bodies to comply with its functions, and vi) enforcing any financial sanctions that may be imposed.
All regulated entities, whether financial or otherwise, will be required to report to the Financial Intelligence Unit (UIF) any operation or transaction, completed or not, that they come across that is not supported by a clear economic or legal explanation, or that appear to be unjustifiably complex. They will also have to report all transactions that are unusual or suspicious, or that involve assets of suspicious origins.
Another of the amendments brought in with the law is the inclusion of notaries, lawyers and accountants for the first time as non-financial regulated entities. The obligation of notaries and lawyers to report suspicious transactions is restricted to those operations in which they act on behalf of their clients, unless this comes about as a result of the advice that the professionals have given these clients.
The accountants’ obligation holds for both the transactions and exceptions applicable in the case of lawyers and notaries, and also for those transactions resulting from the drafting of limited-scope reports and the auditing of financial statements.
Due diligence measures
All regulated entities will be required to define and implement due-diligence policies and procedures for their clients, in order to identify them properly and to learn some information about them (KYC), depending on the volume and type of business in which they engage.
These policies and procedures should be applied to all new clients, or to existing clients when commercial relationships are initiated or when they conduct occasional transactions that breach the thresholds for each activity. The regulated entities themselves may decide on the degree to which due diligence measures will be applied, depending on a risk analysis, which should be set out in writing, together with the type of client, their businesses, products and transactions.
Simplified measures can be applied in those cases where clients, products or transactions are low risk, and, by contrast, intensified measures in cases of higher risk.
Special due diligence procedures should be defined for:
- Politically exposed persons, that is, people who hold or have held in the last 5 years important public posts in the country or abroad.
- Legal persons, and particularly companies with bearer shares
- Trusts, in order to establish their control structure and beneficial owners
In any event, entities must keep a record of all transactions conducted with their clients, and all the information that has been obtained from the same during the due diligence process.
Other areas regulated by the law focus on the information exchange between the UIF and its opposite numbers and specialist public bodies, the transport of cash, monetary instruments and precious metals, the crimes of money laundering, special investigation techniques and international criminal cooperation.