Portuguese Anti-Money Laundering Regulations: A Comprehensive Overview

LISBON, PORTUGAL - As part of its efforts to combat money laundering and terrorism financing, Portugal has implemented a robust anti-money laundering (AML) regime that applies to various economic operators, including those involved in the importation or exportation of rough diamonds, precious metals, and other high-value goods.

Entities Subject to AML Requirements

Who is Required to Comply?

According to Portuguese law, entities subject to AML requirements include:

Operators importing or exporting rough diamonds
Entities authorized to exercise activities related to transportation, custody, handling, and distribution of funds and values
Traders dealing in goods of high unit value, including gold, precious metals, precious stones, antiques, aircraft, ships, and motor vehicles
Other entities/persons trading in goods where payment is made in cash
Entities carrying out activities with virtual assets

Additionally, crowdfunding platforms, loan and capital-type managing entities, and non-profit organizations are also subject to AML requirements.

AML Requirements for Cryptocurrency Industry

Transposition of EU Directive 2018/843

The Portuguese cryptocurrency industry is subject to AML requirements under Law 83/2017. This law transposes EU Directive 2018/843, which aims to prevent money laundering and terrorism financing in the virtual currency sector.

Prior to this legislative amendment, the Bank of Portugal prohibited credit, payment, and electronic money institutions from buying, owning, or selling virtual currency due to risks associated with money laundering.

Compliance Programmes

Maintaining an Effective Compliance Function

Financial institutions and auditors are required to maintain an independent, permanent, and effective “function of compliance” to monitor and enforce internal control procedures regarding AML and other risks. The Bank of Portugal and the Portuguese Securities Market Commission define several requirements for this function.

Reporting Suspicious Activity

Duty to Report Suspicious Transactions

Article 43 of Law 83/2017 imposes a duty on entities to report suspicious transactions if they know, suspect, or have grounds to believe that certain funds or assets originated from criminal activity or are related to terrorism financing.

Collaboration and Cooperation

The Financial Intelligence Unit (FIU) is the authority responsible for collecting, centralizing, and analyzing information resulting from AML communications. The FIU also plays a central role in cooperating at the international level with counterpart units and collaborating with government authorities.

Beneficial Ownership Information

Public Corporate Registry

A public corporate registry provides access to information about beneficial ownership and control of legal entities. This information is available to financial institutions for customer due diligence purposes and to government authorities.

Payment Orders and Instructions

Accurate Information Required

Accurate information on originators and beneficiaries must be included in payment orders for funds transfers, as well as in payment instructions to other financial institutions.

In conclusion, Portugal’s anti-money laundering regime aims to prevent money laundering and terrorism financing by applying AML requirements to various economic operators, including those involved in the importation or exportation of rough diamonds and precious metals. The regime also ensures that accurate information about beneficial ownership and control is maintained and available to government authorities and financial institutions.