Financial Crime World

Anti-Money Laundering Regulations in Colombia

Colombia has implemented various regulations to prevent money laundering and combat financial crime. The following sections outline key aspects of these regulations, including Customer Due Diligence, Enhanced Due Diligence, Reporting Requirements, and Fines and Penalties.

Customer Due Diligence

Financial institutions, gambling operators, and other service providers in Colombia must perform thorough Customer Due Diligence (CDD) on their customers. This involves obtaining adequate knowledge of clients, including:

  • Nature and source of funds: Understanding the origin and legitimacy of customer funds is crucial.
  • Markets in which they operate: Knowledge of a client’s business or market helps identify potential risks.
  • True beneficiaries in control of them: Identifying ultimate beneficial owners (UBOs) ensures that institutions understand who ultimately controls the account.

Restrictive lists issued by national and foreign authorities related to Colombians must be consulted permanently, ensuring compliance with international standards.

Enhanced Due Diligence

Special measures apply to:

  • Politically Exposed Persons (PEPs): Individuals in positions of power or influence are subject to enhanced scrutiny.
  • Clients from high-risk jurisdictions or sectors: Entities operating in higher-risk areas require more stringent controls.

Enhanced Due Diligence (EDD) involves additional controls, including approval of operations and business with PEPs by an authority higher than the ordinary due diligence process. This ensures that institutions can adequately assess potential risks associated with these clients.

Reporting Requirements

Public and private entities in the financial and insurance sectors must report to the UIAF (Superintendencia Financiera de Colombia). Additionally, corporations under the “Superintendencia de Sociedades” with a monthly income superior to 160,000 minimum wages must also report to the UIAF.

Fines and Penalties

Money laundering is punishable by:

  • 10-30 years of imprisonment: Harsh penalties for individuals involved in money laundering.
  • A fine ranging from 650 to 50,000 minimum monthly wages: Financial consequences for those found guilty.

For crimes committed via exchanges, the maximum punishment is up to 40 years of imprisonment.