Financial Crime World

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Money Laundering Detection Methods in Puerto Rico

Puerto Rico’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) supervisors are responsible for ensuring that financial institutions comply with federal laws aimed at preventing money laundering and terrorist financing. The Financial Crimes Enforcement Network (FinCEN), a bureau of the US Department of the Treasury, is the primary AML/CTF regulatory body in the United States and Puerto Rico.

Complying with AML/CTF Regulations in Puerto Rico

Puerto Rico is subject to federal laws of the United States, including the Bank Secrecy Act (BSA) and the USA PATRIOT Act. These laws require financial institutions to implement measures to prevent financial crime, such as:

  • Creating anti-money laundering programs
  • Conducting customer due diligence
  • Reporting suspicious transactions

To comply with these regulations, banks are required to:

  • Create efficient BSA compliance systems
  • Set up monitoring and customer due diligence mechanisms
  • Check for matches with other government listings and the Office of Foreign Assets Control (OFAC)
  • Report cash transactions above $10,000 per day
  • Keep records of cash payments made for movable property
  • Report any unusual behavior that may be a hint of crime

AML/CTF Reporting Obligations in Puerto Rico

Banks are required to:

  • Issue currency transaction reports (CTR) and report cash transactions above $10,000 made over a single business day
  • Submit suspicious activity reports (SAR) for any cash transaction that appears to be attempting to circumvent BSA reporting requirements or implies that the customer is engaging in money laundering or other criminal activities

Other financial institutions, such as Money Service Businesses (MSBs), are required to:

  • Record and report certain transactions, including:
    • Cash acquisitions
    • Money transfers
    • Foreign currency exchanges
  • Submit reports electronically to FinCEN within a specified timeframe and keep on file for a period of five years

Conclusion

The detection of money laundering in Puerto Rico requires financial institutions to implement effective AML/CTF programs and report suspicious transactions to FinCEN. This helps to prevent financial crime and protect the integrity of the financial system.