Financial Crime World

Anti-Money Laundering Regulations in Chile: A Guide for Financial Institutions

Introduction

Chile has implemented various regulations to combat money laundering (ML) and terrorist financing (TF) within its financial institutions. This article outlines the key points of these regulations, ensuring that affected institutions understand their obligations.

Customer Due Diligence (CDD)

  • Conducting CDD: Financial institutions must conduct customer due diligence before or during the establishment of a permanent legal or contractual relationship between the customer and the institution.
  • Enhanced Due Diligence Measures: Institutions must apply enhanced due diligence measures when there are suspicions of ML/TF.

Enhanced Due Diligence Procedures

  • Politically Exposed Persons (PEPs): Financial institutions must implement enhanced due diligence procedures for PEPs.
  • Electronic Funds Transfers: Regulated entities must apply enhanced due diligence measures to electronic funds transfers considered high-risk.
  • Countries and Jurisdictions under Monitoring: Institutions subject to comply with Chilean AML regulations must implement enhanced due diligence procedures.

Record Keeping

Affected institutions must keep records of the above for a minimum period of five years. Additionally, they must inform the Financial Analysis Unit (UAF) when required, of any cash operation greater than ten thousand dollars USD or the equivalent in Chilean pesos.

Suspicious Activity Reports (SARs)

If during CDD, a customer refuses to provide all or part of the required information or documentation, or submits something false, it should be considered as an alert and sent to the UAF by means of a SAR.

Penalties

Hiding or disguising the origin of illicit funds in Chile is punishable by five years and one day to fifteen years in prison, and a fine of two hundred to one thousand monthly tax units.

Frequently Asked Questions (FAQs)

  • Chile’s AML Status: Chile is not on the FATF list of countries with strategic AML deficiencies.
  • Corruption Level: Chile has one of the lowest corruption levels in Latin America (second only to Uruguay).
  • Regional Cooperation: Chile is a member of the FATF-style regional body—GAFILAT—an associate FATF-member that includes countries throughout the Americas and adheres to FATF standards.