Financial Crime World

Banking Regulation in Chile: A Guide to Anti-Money Laundering and Combating Terrorism Financing

Overview

This article provides an overview of the key requirements and regulations for financial institutions in Chile related to anti-money laundering (AML) and combating the financing of terrorism (CFT). It highlights the importance of adhering to these regulations to prevent criminal wrongdoing and ensure compliance.

Reporting Requirements

The Financial Analysis Unit (UAF) requires financial institutions to report on various activities, including:

  • Suspicious transactions: Any transactions that appear unusual or suspicious must be reported.
  • Cash transactions exceeding US$10,000: Institutions must report cash transactions exceeding US$10,000 on a semi-annual basis.
  • Documents and antecedents related to previously reported or detected suspicious transactions: Institutions must maintain records of previously reported or detected suspicious transactions.

Liability for Criminal Wrongdoings

Law No. 20,393 extends liability for criminal wrongdoings related to money laundering, financing terrorism, and bribery of civil servants to legal entities if such crimes are committed directly and immediately in the entity’s interest or for its benefit by owners or controllers.

Anti-Money Laundering Systems

The CMF requires banks to have specific anti-money laundering systems in place based on the “know-your-customer” system, as outlined in Chapter 1–14 of the Updated Compilation of Rules (Recopilación Actualizada de Normas) of the CMF.

Author Expertise

  • Diego Peralta Valenzuela: Partner at Carey and co-head of the firm’s Banking and Finance Group. He focuses on financial products, business financing, purchases and sales of companies, debt and equity securities issuance, and financial regulatory matters.
  • Fernando Noriega Potocnjak: Associate at Carey since 2007 and member of the firm’s Banking and Finance and Capital Markets Groups. He has worked on banking law, lending transactions, project financing, and capital markets.

Key Takeaways

Financial institutions in Chile must adhere to strict regulations related to AML and CFT. Failure to comply can result in liability for criminal wrongdoings. It is essential for institutions to implement effective anti-money laundering systems and maintain accurate records of suspicious transactions.