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Anti-Money Laundering (AML) and Know Your Customer (KYC) Regulations in Paraguay

Paraguay has specific regulations for Anti-Money Laundering (AML) and Know Your Customer (KYC), which are crucial to ensure the integrity of financial transactions. This guide provides a comprehensive overview of AML/KYC regulations in Paraguay, including identity verification, document requirements, timing, Politically Exposed Persons (PEPs), reliance on external services, and record retention.

1. AML/KYC Overview

Paraguay’s AML/KYC regulations include identifying and verifying the identity of customers, monitoring transactions, and maintaining records. These regulations are essential to prevent money laundering and ensure that financial institutions comply with international standards.

Key Aspects of AML/KYC in Paraguay

  • Identifying and verifying customer identities
  • Monitoring transactions for suspicious activity
  • Maintaining accurate and up-to-date records

2. Identity Verification

Identity verification is a critical component of AML/KYC regulations in Paraguay. It involves checking security features such as holograms, microprinting, and document expiration to ensure that customers are who they claim to be.

Documents Required for Verification

The following documents are considered proof of identity in Paraguay:

  • Identity Card
  • Passport
  • Driving License

For address verification, the following documents are accepted:

  • Current utility bill (issued no more than 3 months ago)
  • Bank statement (issued no more than 3 months ago)
  • Document issued by a government department (showing address and name)

3. Timing of Verification

Identity verification is not a one-time process, but rather required in multiple instances as per recommendations. Financial institutions must verify customer identities at the onset of a business relationship and periodically thereafter to ensure continued compliance.

Periodic Verification

Financial institutions should perform periodic verification on existing customers to ensure that their information remains accurate and up-to-date.

4. Politically Exposed Persons (PEPs) and Enhanced Due Diligence Measures

In the absence of explicit regulations, financial institutions may utilize Enhanced Due Diligence measures for high-risk customers, including PEPs. Shufti Pro provides AML Screening services to help identify potential risks associated with these individuals.

Risk Assessment

Financial institutions should conduct thorough risk assessments on PEPs and other high-risk customers to ensure compliance with AML/KYC regulations.

5. Reliance on External Services

While relying on third-party services is allowed, financial institutions remain liable for maintaining regulatory compliance and fulfilling AML/KYC obligations.

Third-Party Vendors

Financial institutions must carefully select and monitor third-party vendors to ensure that they meet AML/KYC requirements.

6. Record Retention

Paraguay’s regulations require data retention for not less than 5 years as part of AML/KYC obligations.

Accurate Record Keeping

Financial institutions must maintain accurate and up-to-date records of customer information, transactions, and other relevant data to ensure compliance with AML/KYC regulations.