Portugal Cracks Down on Money Laundering Techniques

Portugal has made significant strides in combating money laundering and terrorist financing, resulting in positive outcomes in recent years. Despite its geographical location posing risks, the country’s authorities have implemented robust measures to prevent financial crimes.

The Financial Intelligence Unit (FIU)

Established in 2002, the FIU is responsible for combating money laundering and tax crimes. It operates independently under the Portuguese Judicial Police, dealing with executive matters rather than regulating financial activities.

Improved AML Compliance Policies

Portugal’s entry into the Financial Action Task Force (FATF) in 1991 marked a significant milestone in improving its Anti-Money Laundering (AML) compliance policies. In 2004, the country enacted Law No. 11/2004, implementing specific requirements to comply with FATF and EU regulations.

Recent Evaluations and Achievements

According to a 2017 FATF evaluation, Portugal was found to be compliant with 12 of the 40 recommendations and largely compliant with 22. This assessment removed Portugal from FATF’s list of AML-deficient countries.

The Banco de Portugal

As both the central bank and financial regulator in Portugal, the Banco de Portugal is responsible for implementing AML/CFT measures and publishing regulations for financial institutions to follow. These regulations are designed to be compatible with FATF and EU laws.

Recent Strengthening of AML Legislation

In recent years, Portugal has strengthened its AML legislation. In 2017, the country introduced new laws reducing cash transaction limits, establishing a national register of recipients for financial transactions, and obliging attorneys to report suspected money laundering cases to authorities.

• New laws also proposed easing bank confidentiality and granting tax inspectors access to information about suspicious accounts.
• Entities are required to identify clients, conduct due diligence for business relationships or transactions exceeding specific thresholds, and report instances of suspicious activity to the authorities.

Non-Compliance Penalties

Non-compliance penalties in Portugal include imprisonment, with a maximum sentence of 12 years. Legal entities can be fined, with the court determining the appropriate penalty based on their financial situation and employee-related expenses.

Effective AML Compliance Measures

To ensure effective AML compliance, Portugal-based businesses are advised to implement robust measures, including:

• Risk assessments
• Policies
• Training
• Internal controls

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