Financial Crime World

Portugal’s Crusade Against Money Laundering: A Compliance Success Story

Portugal, located in the heart of Europe, has long been aware of the risks posed by financial crimes and has taken strides to counteract them. The country’s commitment to fighting money laundering and tax crimes is reflected in its robust regulatory framework.

Portugal’s Efforts to Combat Money Laundering

  • Key Unit Against Money Laundering and Tax Crimes: Portugal’s Financial Intelligence Unit (FIU) was established in 2002 to deal with executive matters against money laundering and tax crimes.
  • Regulatory Framework: Portugal has shown significant progress in strengthening its anti-money laundering (AML) policies. It is a member of the Financial Action Task Force (FATF) since 1991.
  • Law No. 11/2004: The first official action against money laundering in Portugal came with this legislation, which established requirements in line with FATF and EU regulations.
  • Banco de Portugal: The central bank is responsible for implementing AML measures nationally.

Portugal’s achievements in AML Regulations

  • FATF Compliance: Portugal was found to be compliant with 12 out of 40 FATF Recommendations, and largely compliant with 22 in its 2017 evaluation, which freed it from the FATF list of AML-deficient countries.
  • “Jurisdiction of Primary Interest”: In the 2018 International Narcotics Control Strategy Report, Portugal was identified as a “Jurisdiction of Primary Interest,” recognizing its AML laws and enforcement mechanisms consistent with global standards.

Expanding AML Requirements

As AML requirements expand beyond the financial sector, high-risk sectors such as gambling, real estate, and law must rigorously identify clients, conduct due diligence, and maintain AML compliance programs. Failure to comply results in:

  • Severe Penalties: Perpetrators face fines or even imprisonment for up to 12 years, while legal entities face fines equivalent to a month of imprisonment for each day.
  • Repeat Offenders: Harsher sentences are given to repeat offenders.

Maintaining AML Compliance

  • Documenting Beneficial Ownership Information: Entities must document beneficial ownership information in a Central Register.
  • Correspondence Relationships: Maintaining correspondence relationships with reputable institutions is necessary to ensure AML compliance.

Assisting Portuguese Entities

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