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Chile's KYC Rules: Verifying Identities, Preventing Laundering

· 2 min read
Daniel Smith
Money Laundering Specialist

KYC Requirements in Chile's Banking Sector​

This article provides an overview of the legal framework, relevant authorities, and customer due diligence requirements for Anti-Money Laundering (AML) compliance in Chile. Below, we discuss the Know-Your-Customer (KYC) guidelines and regulations, which aim to verify the identity, suitability, and potential risks involved in establishing and maintaining business relationships.

National Regulatory Framework and Effective Date​

  • AML in Chile is primarily governed by Law No. 19,913, enacted in 2003 [1]
  • Established the Financial Analysis Unit (UAF) and amended provisions relating to money and asset laundering.
  • Other relevant regulations: Law No. 20,393 (2009) and Law No. 20,730 (2014) [2]

Relevant Authority and Purpose​

  • UAF: a decentralized public service under the Ministry of Finance [1]
  • Responsible for implementing and enforcing AML controls in Chile [1]
  • Objective: to prevent and hinder the use of the financial system and economic activities from being used to commit crimes related to money laundering and terrorism financing [1]

Customer Due Diligence​

  • Informing Entities [1], including banks, financial institutions, and other specified entities, are obliged to identify and know their customers [1]

Requirements​

Informing Entities must request and maintain specific customer information and records:

  1. Customer Due Diligence and Customer Knowledge Register
  2. Establishing a relationship or executing transactions above a specified threshold
  3. Instances of high-risk situations, such as suspected money laundering or terrorist financing [1]

Third-Party Dependence​

  • No reliance on third parties to meet AML regulations [1]
  • Not authorized to comply with AML regulations on behalf of other entities in Chile [1]

Entities and Individuals Subject to KYC Requirements​

  • Banks, financial institutions, factoring companies, foreign exchange offices, and various financial services companies [1]
  • Individuals transporting cash or negotiable instruments over USD 10,000 [3]

Reporting Suspicious Transactions​

  • Required information not provided or determined to be false or untrue [1]
  • Report to UAF as a suspicious transaction [1]
  • Update customer files annually or upon significant changes [1]

[1]: Law No. 19,913, 2003 [2]: Law No. 20,393, 2009 and Law No. 20,730, 2014 [3]: Chilean Customs regulations