Financial Crime World

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Puerto Rico’s AML/CTF Regulations: What You Need to Know

As an unincorporated territory of the United States, Puerto Rico is subject to many U.S. federal laws, including those related to anti-money laundering (AML) and combating the financing of terrorism (CTF). The Financial Crimes Enforcement Network (FinCEN) plays a crucial role in regulating AML/CTF activities in Puerto Rico.

Complying with AML/CTF Regulations

To comply with AML/CTF regulations, financial institutions in Puerto Rico must adhere to strict guidelines. The Bank Secrecy Act (BSA) and the USA PATRIOT Act are two primary federal laws that require banks to implement measures to prevent financial crime.

  • Under the BSA, banks must create efficient compliance systems, set up monitoring and customer due diligence mechanisms, check for matches with other government listings and the Office of Foreign Assets Control (OFAC), and report cash transactions above $10,000 per day.
  • Banks must also maintain anti-money laundering programs that are risk-based, conduct customer identification and due diligence, and keep records of cash payments.

The USA PATRIOT Act broadens the use of BSA and grants law enforcement additional monitoring authority to combat terrorism-related offenses. The act allows for enhanced surveillance, increased sharing of information between federal agencies, and more stringent penalties for terrorism offenses.

Reporting Obligations

Banks in Puerto Rico are required to file:

  • Currency transaction reports (CTRs) electronically to FinCEN within 15 days of the transaction date for cash transactions above $10,000 made over a single business day.
  • Suspicious activity reports (SARs) for any cash transaction that appears to be attempting to circumvent BSA reporting requirements or for any activity that implies money laundering or other criminal activity.

Money Services Businesses (MSBs)

MSBs in Puerto Rico are required to:

  • Record cash acquisitions totaling $3,000 to $10,000, inclusive.
  • Gather and record information for each money transfer of $3,000 or more and preserve the record for 5 years following the transaction date.

Currency Exchangers

Exchangers of foreign or domestic currency in Puerto Rico are required to:

  • Retain records of all transactions totaling more than $1,000 for a period of 5 years after the transaction date.

In conclusion, financial institutions in Puerto Rico must adhere to strict AML/CTF regulations to prevent financial crime and combat terrorism-related offenses. Understanding these regulations is crucial for compliance and avoiding penalties.