Puerto Rico Removed from Terrorist Financing Watchlist After Implementing Stricter Laws
The US Treasury Department has made a significant move by removing Puerto Rico’s International Banking Entities (IBEs), International Financial Entities (IFEs) and Cooperatives from its list of most significant vulnerabilities and risks related to anti-money laundering/combating the financing of terrorism (AML/CFT) policy.
Improved Regulatory Framework
According to the latest National Money Laundering Risk Assessment (NMLRA) 2024 report, Puerto Rico’s financial entities were previously included in a section dedicated to entities not subject to comprehensive AML/CFT requirements. However, a rule issued by the Financial Crimes Enforcement Network (FinCEN) made the requirement equally applicable to such entities, effective March 15, 2021.
Strengthening Regulatory Framework
The removal from the watchlist comes as a result of Puerto Rico’s efforts to strengthen its regulatory framework and oversight of IBEs and IFEs. The island has implemented stricter anti-money laundering laws and regulations, which have been welcomed by Commissioner Natalia Zequeira.
“We have made significant progress in improving our oversight and demanding strict compliance with applicable laws and regulations,” said Zequeira. “This change reflects a recognition of our efforts and commitment to combating money-laundering and the financing of terrorism-related crimes.”
New Legislation
The Puerto Rico government has also passed legislation aimed at strengthening the regulation and oversight of IBEs and IFEs. The new laws, signed into law by Governor Pedro Pierluisi last Friday, aim to modernize and strengthen existing regulations, making them more efficient, resilient and better prepared to face changes in the markets.
Key Measures:
- Raising minimum capitalization requirements
- Increasing application fees
- Broadening the scope of required investigations
- Increasing the Commissioner’s discretion in granting or denying permits or licenses
- Preventing insolvency and ensuring international financing entities operate honestly, fairly and efficiently
Commitment to Anti-Money Laundering Compliance
“This is a major step forward for Puerto Rico’s financial system,” said Zequeira. “We are committed to maintaining the highest standards of anti-money laundering compliance and protecting our financial institutions from the risks of money-laundering and terrorist financing.”
The removal from the watchlist is a significant victory for Puerto Rico and its financial institutions, demonstrating the island’s commitment to combating money-laundering and the financing of terrorism-related crimes.