In June 2016, Ecuador promulgated the Law of Prevention, Detection and Eradication of the Crime of Asset Laundering and the Financing of Crimes ("Law"), which is a new version of the previously repealed Law Against Asset Laundering that was promulgated in 2005, which created the Financial Analysis Unit – UIF, and that was later re-named the Law of Prevention, Detection and Eradication of the Crime of Asset Laundering and Financing of Crimes, and under which the Financial Analysis Unit – UAF was created. The new Law went into effect on July 21, and implements the following principal changes to the previous anti-money laundering ("AML") regime:
- The Financial Analysis Unit – UAF was modified to become the Financial and Economic Analysis Unit ("FEAU"), which is now an entity with administrative, financial and operational autonomy, attributes that the UAF previously lacked. The FEAU is responsible for enforcing compliance with the Law and is authorized to initiate and carry out investigations, hold administrative proceedings and issue sanctions. In contrast, its predecessor enforcement entity, the Financial Analysis Unit, worked in collaboration with the Superintendence for Companies, Stocks and Insurance and the Superintendence of Banks, which were the entities ultimately responsible for imposing sanctions for noncompliance.
- It broadens the subjects obligated to make reports, adding artistic promoters and raffle organizers. In addition, it preserves the reporting obligations of the following persons and entities: (1) branches of foreign banks, (2) stock exchanges, (3) fund and trust administrators, (4) cooperatives, foundations and non-governmental organizations, (5) persons and entities that commercialize motor vehicles, ships and aircraft, (6) international and national money transfer services; (7) national and international postal shipping services; (8) postal services, including their operators, agents and agencies; (9) tourism agencies and tour operators; (10) individuals dedicated to investment in real estate and construction; (11) race tracks; (12) pawn shops; (13) jewel, metal and precious stones merchants; (14) dealers of antiques and art; and (15) notaries.
- It significantly decreases the fines applicable for noncompliance. The fines for noncompliance under the Law start at approximately USD 7,320.00 and may go up to twenty times that amount. Under the previous law, the fines started at approximately USD 20,000.
The Law was proposed by President Rafael Correa, who referenced the United Nations Conventions on Drug Trafficking (1998) and Organized Crime (2000), as motivating factors for its implementation.
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