Financial Crime World

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Nicaragua’s FAU Unveils New Regulation for Compliance Officers

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In a move aimed at strengthening its anti-money laundering and terrorist financing efforts, Nicaragua’s Financial Analysis Unit (FAU) has introduced a new regulation for compliance officers responsible for preventing, detecting, and reporting suspicious transactions related to money laundering, financing of terrorism, and proliferation of weapons of mass destruction.

Key Requirements

  • The FAU Regulation 24, published in La Gaceta, Official Journal on March 20, 2024, replaces previous provisions on the subject and took effect immediately.
  • The regulation outlines key requirements for compliance officers and substitutes, as well as minimum standards for their training and qualifications.

Designation of Compliance Officers

  • All obligated subjects supervised by FAU must designate a compliance officer and substitute, depending on their size and type of business.
  • The compliance officer will be responsible for designing, implementing, and verifying measures to prevent and detect money laundering and terrorist financing, as well as reporting suspicious transactions to FAU.

Qualifications and Training

  • Both compliance officers and substitutes must meet certain minimum requirements, including:
    • Residing in Nicaragua
    • Having received accredited training with a minimum of 8 consecutive hours on ML/FT/FP prevention
    • Meeting specific topics, such as national legal framework, risk assessment, due diligence policy, and monitoring suspicious transactions

Registration and Updates

  • Both compliance officers and substitutes must be registered by the obligated subject through FAU’s electronic platform and keep their information up to date.
  • They cannot be shareholders, partners, directors, or senior executives of the obligated subject, with some exceptions.

Absence from Position

  • The regulation outlines rules for absence from position, requiring a new person to fill the role if the compliance officer is absent for more than 90 business days.
  • FAU must be notified within three working days of any change in the compliance officer or substitute.

Consequences of Non-Compliance

  • Failure to comply with these regulations can result in severe penalties, including:
    • Fines ranging from US$500 to US$1500
    • Suspension of activities
    • Definitive closure of operations

Conclusion

The new regulation aims to enhance Nicaragua’s anti-money laundering and counter-terrorism efforts and ensure that obligated subjects comply with international standards.