Uruguay has updated their anti-money laundering and terrorism laws affecting the free trade zones in the country.
The Uruguayan Parliament has issued a new decree No. 379/018 on 12 November 2018 that updates Law 19.574, which is known as the anti-money laundering law for the free trade zones. The first changes to this law were put into place on 10 January 2018 and covered anti-money laundering and terrorism financing regime and also included new obligations for professionals and organizations. Now this new decree will make the rules applicable to non- financial sectors and put the obligation on them to report suspicious money laundering activities of clients.
The decree contains 14 chapters that are divided into two parts, one is general rules for all of the obligated parties and the other contains specific regulations for these types of activities:
- real estate,
- lawyers, scribes, accountants,
- merchants of antiques, works of art, metals and precious stones,
- free trade zone users,
- service providers,
- non-profit organizations.
The new regulation states that that operators, direct and indirect users of the free zones are obliged to report any unusual or suspicious activities, whether or not they carried out. Any actions without obvious economic or legal justification and are raised with unusual or unjustified complexity, must be reported. These businesses but also have information about their clients and comply with compliance procedures.
This decree was a created because of international requirements that are GAFI recommendations. It states that countries should include these obligations to report by companies that are in non-financial sectors as well in their anti-money laundering laws.
What businesses need to do
Businesses in the free zones will have to follow due diligence on their customers. They will have to obtain, update and keep information about current and potential clients in order to help prevent money laundering. Companies will have to designate a compliance officer who will keep a record of all the obtained information they will also be linked to the Financial Analysis and Information Unit of the Central Bank of Uruguay and SENACLAFT.
In order to know the true identity of their clients, companies must:
- verify the identity of each client,
- identify the final beneficiary,
- obtain information about the activities of the company.
Some information does not to be provided by clients and can be found in public records, UN lists and Politically Exposed Persons (PEPs) lists. Companies have to prepare a suspicious transaction report (ROS) and implement prevention policies for all customers from high to low risk in order to do business.
The new decree states that there may be fines or penalties for improper documentation ranging from of 1,000 IU and a maximum of 20,000,000 IU, depending on the circumstances of the case, the conduct and volume of the business.
Get help from experts
TMF Uruguay has always helped clients to be compliant with all aspects of business no matter where they are located. Our local experts can provide services to help businesses in the free trade zones follow due diligence on their customers and comply to these new rules and regulations.
TMF Uruguay is a financial trust regulated by the Central Bank of Uruguay, with extensive experience in compliance. Talk to us and let us help you and your business.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.