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High-Risk Third Countries and Remote Contracting: Banks Take Extra Precautions

In an effort to combat money laundering and terrorist financing, banks operating in Portugal have been taking extra precautions when dealing with clients from high-risk third countries.

Enhanced Measures for Client Identification and Verification

According to recent regulations, banks must adopt enhanced measures to identify and verify the identity of their clients, as well as any planned or executed transactions. This includes:

Obtaining additional information about a client’s representatives and effective beneficiaries
Carrying out additional checks to ensure that all transactions are legitimate

Growing Concerns about Money Laundering and Terrorist Financing

The new regulations come in response to growing concerns about money laundering and terrorist financing, particularly in countries considered to be high-risk. In recent years, there have been numerous cases of illegal activities being conducted through the financial system, with banks being used as a means of transferring funds and concealing illicit profits.

Additional Checks and Monitoring

To combat this issue, Portugal has implemented new regulations requiring banks to take extra precautions when dealing with clients from high-risk third countries. This includes:

Conducting additional checks on the client’s identity and background
Monitoring all transactions for suspicious activity

Reporting Suspicious Activity

In addition to these measures, banks are also required to report any suspicious activity to the relevant authorities, including information about: + The person or entity involved in the transaction + Any known information about their activities

This information must be provided to the authorities within a set timeframe, usually 24 hours.

Response from Anti-Money Laundering Groups and Civil Society Organizations

The new regulations have been welcomed by anti-money laundering groups, who see them as a major step forward in combating illegal activities. However, some critics have raised concerns about the impact these regulations may have on civil society organizations.

“These regulations are overly broad and could potentially harm legitimate organizations,” said Joao Costa, director of a local non-profit organization.
“We urge the government to reconsider these regulations and ensure that they do not unduly burden civil society.”

Commitment from the Portuguese Government

Despite these concerns, the Portuguese government remains committed to implementing these regulations. “We believe that these measures are necessary to protect our financial system and prevent illegal activities,” said Minister of Finance, Joao Rebelo.

“We will continue to work with banks and other stakeholders to ensure that these regulations are effective in combating money laundering and terrorist financing.”

In related news, the European Union has recently imposed new sanctions on Russia, prohibiting EU banks from accepting deposits equivalent to more than EUR 100,000 from Russian citizens or legal entities established in Russia. This move is seen as a major step forward in limiting commercial relations between Russia and the EU.

About ECNL and PILnet

The European Center for Not-For-Profit Law (ECNL) is a non-profit organization that aims to support not-for-profit organizations throughout Europe. Based in The Hague, Netherlands, ECNL provides legal advice and assistance to NGOs on issues related to governance, fundraising, and advocacy.

PILnet is a non-profit organization based in New York, USA, that works to empower civil society organizations around the world. With offices in over 20 countries, PILnet provides legal advice and assistance to NGOs on issues related to advocacy, fundraising, and governance.