Money Laundering in Portugal: Understanding the Risks and Regulations

Portugal has implemented a robust system to prevent and combat money laundering, but like many countries, it faces challenges in its efforts to ensure compliance with international standards.

Assessing Risk and Applying a Risk-Based Approach

Portugal has made significant strides in assessing risk and applying a risk-based approach, earning it a largely compliant rating from FATF. This involves identifying high-risk areas and taking steps to mitigate those risks.

National Cooperation and Coordination

The country’s national cooperation and coordination mechanisms are also considered largely compliant. This enables effective communication and collaboration among various agencies involved in combating money laundering.

Money Laundering Offense

Portugal has a comprehensive money laundering offense in place, with laws that clearly define the crime and its related penalties. However, there is room for improvement in this area, earning it a partially compliant rating.

Confiscation and Provisional Measures

The country’s confiscation and provisional measures are considered compliant, allowing authorities to effectively seize assets linked to money laundering activities.

Portugal has also implemented targeted financial sanctions related to terrorism and terrorist financing, earning it a compliant rating. This includes freezing assets and imposing penalties on individuals or entities involved in such activities.

Non-Profit Organizations

The country’s regulations for non-profit organizations are considered partially compliant, as there is a need for greater transparency and reporting requirements.

Financial Institution Secrecy Laws

Portugal has made significant efforts to reform its financial institution secrecy laws, earning it a largely compliant rating. This involves requiring banks and other financial institutions to disclose information about their clients.

DNFBPs Customer Due Diligence

The country’s regulations for DNFBPs customer due diligence are considered partially compliant, as there is a need for improvement in this area.

Transparency and Beneficial Ownership Requirements

Portugal’s transparency and beneficial ownership requirements for legal persons and arrangements are considered partially compliant. This involves the requirement for entities to disclose information about their beneficial owners.

Cash Couriers

The country’s regulations for cash couriers are considered largely compliant, involving licensing requirements and anti-money laundering obligations.

Statistics

Portugal has implemented robust regulations for statistics, earning it a largely compliant rating. This involves the collection and analysis of data on money laundering cases.

Guidance and Feedback

The country provides guidance and feedback to financial institutions and other stakeholders, earning it a compliant rating. This involves regular updates on regulatory requirements and best practices.

Portugal has implemented robust regulations for targeted financial sanctions related to terrorism and terrorist financing, earning it a compliant rating. This includes freezing assets and imposing penalties on individuals or entities involved in such activities.

Overall, Portugal’s anti-money laundering framework is considered largely compliant with international standards. However, there are areas that require improvement, including the regulation of non-profit organizations, correspondent banking, wire transfers, transparency and beneficial ownership requirements for legal persons and arrangements.

Future Recommendations for Portugal

1. Improving regulations for non-profit organizations, correspondent banking, wire transfers, transparency and beneficial ownership requirements for legal persons and arrangements. 2. Enhancing internal controls and foreign branches and subsidiaries 3. Implementing robust measures for DNFBPs customer due diligence and other measures 4. Increasing transparency and accountability in the country’s financial institutions and regulatory bodies

By implementing these recommendations, Portugal can further strengthen its anti-money laundering framework and reduce the risk of money laundering activities in the country.