FINANCIAL ANALYSIS UNIT GETS POWER TO LIFT BANK SECRECY IN MONEY LAUNDERING CASES
New Law Grants FAU Power to Obtain Complete Lifting of Bank Secrecy
In a significant move to combat financial crimes, the Financial Analysis Unit (FAU) has been granted the power to obtain complete lifting of bank secrecy from a judge in suspected money laundering cases. This new law takes effect immediately and requires that a “serious” situation be proven before a major threat or danger is established.
Ensuring Fairness and Protection
As part of its efforts to ensure fairness and protection, the FAU procures equipment for oral hearings, including:
- Folding screens to prevent visual contact between victims and accused individuals
- Closed television circuits allowing witnesses to testify remotely
The FAU operates independently of the Public Prosecutor’s Office and is a constituent unit of the Ministry of Finance. Its primary goal is to combat economic crimes by lifting bank secrecy and obtaining financial information.
Bank Secrecy Remains a Major Hurdle in Economic Crime Investigations
Despite recent efforts to relax bank secrecy laws, significant practical hurdles remain in place, making it challenging for investigators to obtain crucial financial information. Bank secrecy constitutes a major barrier in economic crime investigations due to the evidentiary burden required to lift confidentiality.
- Obtaining bank information can take several days or weeks, as judges require extensive documentation before authorizing requests and defining the scope of permitted disclosure.
- Banks may hesitate to disclose sensitive information, potentially leading to lengthy delays in obtaining the necessary information.
Legislative Efforts to Address Bank Secrecy
A bill currently before Congress aims to address bank secrecy issues specifically related to money laundering investigations. The Revised Bill on Authorization of Lifting Bank Secrecy in Money Laundering Investigations would grant prosecutors, with judicial approval, access to any financial information deemed necessary for the investigation.
Restrictions on Closing Investigations in Corruption Cases
While mandatory prosecution is the general rule in Chile, there are exceptions. In corruption cases, discretionary decisions to close investigations can be made if certain conditions are met, including:
- Absence of evidence
- Lapse of the limitation period
Conclusion
The power to lift bank secrecy granted to the FAU marks a significant step forward in combating financial crimes in Chile. However, practical hurdles and legislative restrictions remain in place, highlighting the need for continued efforts to streamline the process and ensure effective investigations into corruption and economic crimes.