Financial Crime World

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Anti-Money Laundering Regulations in Colombia: A Comprehensive Overview

Colombia has made significant strides in improving its compliance with international anti-money laundering (AML) regulations. However, there are still certain requirements and guidelines that entities must adhere to.

General AML Regulations

Key Points

  • The US State Department categorizes Colombia as a major money-laundering jurisdiction.
  • Colombia has improved its level of compliance with the FATF Recommendations.
  • Public and private entities from the financial and insurance sectors are obliged to report to the UIAF (Unidad de Inteligencia Financiera).
  • Corporations under the “Superintendencia de Sociedades” which have a monthly income superior to 160,000 minimum wages are also obliged to report to the UIAF.

Customer Due Diligence

Requirements for Financial Service Providers

  • Providers of financial services must perform Customer Due Diligence (CDD) for their customers and counterparts.
  • The business must obtain adequate knowledge of their clients, including:
    • Nature and source of funds
    • Markets in which they operate
    • True beneficiaries in control of them
  • Restrictive lists issued by national and foreign authorities related to Colombians must be consulted permanently.
  • Basic activities for CDD include checking the origin of resources, verifying client’s identity, contact information, and economic activity.

Enhanced Due Diligence

Requirements for Certain Clients

  • Enhanced Due Diligence (EDD) is required for certain types of clients, such as politically exposed persons (PEPs).
  • EDD also applies to any client that requires a higher level of scrutiny due to internal alerts or risk factors.

Reporting Obligations

Public and Private Entities

  • Public and private entities from the financial and insurance sectors are obliged to report to the UIAF.
  • Corporations under the “Superintendencia de Sociedades” which have a monthly income superior to 160,000 minimum wages are also obliged to report to the UIAF.

Fines and Penalties

  • Money laundering is punishable by 10 to 30 years of imprisonment, with a fine ranging from 650 to 50,000 minimum monthly wages.
  • For crimes committed via exchanges, the maximum punishment is up to 40 years of imprisonment.
  • Penalties are increased by 50% for money laundering committed by a legal person or an organization dedicated to money laundering.

Gaming/Gambling Regulations

Overview

Some forms of online gambling were legalized in Colombia in 2016, through the country’s eGaming Act. The following regulations affect online gaming/gambling operators:

  • The Colombian Gambling Act, Law 643 of 2001: Establishes the regulatory framework for the gaming industry.
  • Resolution 20195100044514 of 2019: Imposes AML requirements on operators.
  • Coljuegos Resolution 20215000012784 of May 2021: Complements the KYC due diligence process and expands the list of PEPs.
  • Decree 830 of 2021: Expands the list of PEPs.