Financial Crime World

Anti-Money Laundering (AML) Regulations in Chile

Chile has implemented various Anti-Money Laundering (AML) regulations to prevent and detect money laundering (ML) and terrorist financing (TF). This article outlines key aspects of these regulations, including customer due diligence (CDD), enhanced due diligence for politically exposed persons (PEPs), record-keeping, suspicious activity reports (SARs), penalties, and frequently asked questions.

Customer Due Diligence (CDD)

General Requirements

  • CDD must be conducted by institutions before or during the establishment of a permanent legal or contractual relationship between the customer and the institution.
  • CDD is required for transactions amounting to or greater than USD 1,000 with clients without a permanent legal or contractual relationship.

Enhanced Due Diligence

  • Institutions must apply enhanced CDD measures for high-risk customers, products, or services.

  • Politically Exposed Persons (PEPs) require additional due diligence:

    • Information about the intended nature of the relationship
    • Origin of funds and assets
    • Approval from senior management to begin or continue the legal or contractual relationship

Record Keeping

  • Institutions must keep records for a minimum period of five years.
  • Records include information on cash operations greater than USD 10,000 or its equivalent in Chilean pesos.

Suspicious Activity Reports (SARs)

  • Institutions must have software to detect suspicious transactions and identify potential ML/TF activity.
  • SARs are required for customer refusal to provide required information or documentation.
  • Cash transactions exceeding USD 10,000 or its equivalent in Chilean pesos also require reporting.

Penalties

  • Hiding or disguising illicit funds is punishable by imprisonment and fines.
  • Transporting cash or bearer negotiable instruments without declaration may result in fines up to 30% of the undeclared amount.

Frequently Asked Questions (FAQs)

  1. Is Chile considered a high-risk country for money laundering?

    • No, Chile is not considered a high-risk country for money laundering, as it has low corruption levels and adheres to FATF standards.

  2. Is Chile a member of GAFILAT, an associate FATF-member that includes countries throughout the Americas?

    • Yes