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Ecuador Introduces Enhanced Customer Due Diligence Measures
QUITO, ECUADOR - The Ecuadorian government has implemented new regulations requiring financial institutions to implement enhanced customer due diligence measures to prevent money laundering and terrorist financing.
New Regulations
Under the new rules, financial institutions must conduct thorough background checks on individuals and members of politically exposed persons (PEPs) listed by the United Nations. PEPs include high-ranking government officials, their family members, and close associates. The regulations also require senior management approval before establishing relationships with PEPs.
Application
The new measures apply to non-face-to-face transactions and correspondent banking relationships. Financial institutions must implement policies and procedures to prevent or detect unusual and suspicious operations performed among domestic and/or international legal entities.
Reporting Requirements
In addition, the regulations require financial institutions to report any suspicious activity to the Ecuadorian Financial Intelligence Unit (UAF). The UAF is responsible for analyzing and disseminating information related to money laundering and terrorist financing.
Data Protection
The new regulations also emphasize the importance of data protection. Financial institutions are required to implement measures to ensure the:
- Confidentiality
- Integrity
- Availability of customer data
Key Requirements
- Conduct thorough background checks on individuals and members of PEPs listed by the United Nations
- Obtain senior management approval before establishing relationships with PEPs
- Implement policies and procedures to prevent or detect unusual and suspicious operations performed among domestic and/or international legal entities
- Report any suspicious activity to the UAF
- Implement measures to ensure the confidentiality, integrity, and availability of customer data
Penalties for Non-Compliance
Financial institutions that fail to comply with the new regulations may face penalties, including fines and suspension or revocation of their licenses.
Effective Date
The new regulations are effective immediately.
Contact
For more information on the new regulations, please contact the Ecuadorian Financial Intelligence Unit (UAF) at www.uaf.gob.ec.