Financial Crime World

Chile Takes Tough Stance on Money Laundering, Terrorist Financing, and Bribery

Santiago, Chile - In a bid to crack down on illegal activities, Chile has strengthened its laws and regulations to hold legal entities accountable for money laundering, terrorist financing, and bribery.

Enhanced Due Diligence Measures

Under the new regulations, legal entities must apply enhanced due diligence measures when dealing with high-risk clients, products, or services. This includes:

  • Politically Exposed Persons (PEPs)
  • Individuals and members listed in the UN sanctions committee
  • Countries under international financial monitoring
  • Those with preferential tax regimes

Penalties for Non-Compliance

Fines and imprisonment are now more severe for entities that fail to comply with AML regulations. The penalties include:

  • Hiding or disguising the origin of illicit funds: up to 15 years in prison and a fine of up to one thousand monthly tax units
  • Transporting cash or bearer negotiable instruments exceeding USD 10,000 without declaration: a fine of up to 30% of the undeclared amount

Record Keeping and Suspicious Activity Reports

Financial institutions must:

  • Keep records of customer due diligence for at least five years
  • Report suspicious transactions to the Financial Analysis Unit (UAF)
  • Report cash transactions over USD 10,000 or its equivalent in Chilean pesos

Chile’s Commitment to AML

As a member of the FATF-style regional body GAFILAT, Chile has committed to adhering to international AML standards. The country has made significant progress in reducing corruption and improving its financial sector transparency.

FAQs

  • Is Chile a high-risk country for money laundering? No, Chile is not on the FATF list of countries with strategic AML deficiencies.
  • Is Chile a FATF country? Yes, Chile is a member of GAFILAT, an associate FATF-member that includes countries throughout the Americas and adheres to FATF standards.

With these strengthened regulations in place, Chile is sending a strong message that it will not tolerate illegal activities and is committed to protecting its financial system from money laundering, terrorist financing, and bribery.