Financial Crime World

Puerto Rico’s Financial Crime and Terrorism Funding Landscape Under Scrutiny

Combating Financial Crime and Terrorism Funding in Puerto Rico

In an effort to combat financial crime and terrorism funding in Puerto Rico, the US government has been increasing its efforts to regulate anti-money laundering (AML) and combating the financing of terrorism (CTF) measures on the island.

Unique Challenges for Regulation

Puerto Rico’s unique status as an unincorporated territory of the United States may make it more vulnerable to financial crime and terrorism funding. “Puerto Rico’s complex relationship with the US makes it a challenging place to regulate,” said a former FinCEN official. However, experts emphasize that it is crucial to work closely with financial institutions on the island to ensure compliance with federal laws.

Regulatory Requirements for Financial Institutions

To comply with AML/CTF regulations, banks in Puerto Rico must:

  • Establish efficient Bank Secrecy Act (BSA) compliance systems
  • Set up monitoring and customer due diligence mechanisms
  • Check for matches with other government listings
  • Create anti-money laundering programs
  • Maintain records of cash transactions

Additional Requirements for Financial Institutions

Financial institutions in Puerto Rico are also required to:

  • File currency transaction reports (CTR) and report suspicious activity
    • A CTR is required for cash transactions above $10,000 made over a single business day
    • A suspicious activity report (SAR) must be filed for any cash transaction that may indicate money laundering or other criminal activity

Regulations for Money Services Businesses (MSBs)

MSBs in Puerto Rico, including those that offer travellers’ checks and money orders, are subject to strict regulations. MSBs are required to:

  • Record cash acquisitions totalling $3,000 to $10,000, inclusive
  • Gather and record information for each money transfer of $3,000 or more

Consequences of Non-Compliance

Failure to comply with these regulations could result in severe penalties, including fines and even criminal prosecution.

Commitment to Combatting Financial Crime

In a statement, FinCEN said that it is committed to working with financial institutions in Puerto Rico to ensure that they are doing everything possible to prevent financial crime and terrorist financing. “We will continue to work closely with our partners on the island to identify and disrupt illegal activity,” said a FinCEN spokesperson. “The safety and security of our financial system depends on it.”