Financial Crime World

Puerto Rico’s Anti-Money Laundering Landscape: AML/CFT Regulations, Enforcers, and Compliance

In the tranquil waters of the Caribbean Sea lies the unincorporated territory of Puerto Rico, a precious jewel under U.S. jurisdiction. With its tropical climate and warm hospitality, it invites tourists and businesses alike. However, the paradise is not without challenges: Puerto Rico, like the rest of the United States, must adhere to Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regulations.

AML/CFT Regulations in Puerto Rico

Federal Laws Applicable in Puerto Rico

As part of the U.S. family, most federal laws apply to Puerto Rico, including the Bank Secrecy Act (BSA) and the USA PATRIOT Act. These laws establish the framework for protecting the financial system from illicit activities and combating money laundering.

FinCEN: Primary AML/CFT Regulator in Puerto Rico and the U.S.

The Financial Crimes Enforcement Network (FinCEN) serves as the primary AML/CFT regulator in Puerto Rico and the United States. FinCEN’s responsibilities include:

  1. Ensuring financial institutions establish adequate BSA compliance programs and customer due diligence systems
  2. Data collection, analysis, and dissemination
  3. Strategic partnerships with international organizations

Complying with AML/CFT Regulations in Puerto Rico

BSA & USA PATRIOT Act Obligations

To uphold AML/CFT regulations in Puerto Rico, banks and financial institutions must develop robust compliance programs. This includes:

  1. Implementing effective systems of internal controls
  2. Customer due diligence
  3. Risk assessments
  4. Transactions monitoring

Under the Bank Secrecy Act:

  1. Banks must file Suspicious Activity Reports and Currency Transaction Reports
  2. Screening against Office of Foreign Assets Control (OFAC) lists and other government sources

BSA imposes specific obligations on US financial institutions, including:

  1. Keeping records of cash purchases of negotiable instruments
  2. Maintaining customer identification programs
  3. Training appropriate personnel

In contrast, the USA PATRIOT Act expands law enforcement’s surveillance powers and information-sharing capabilities to better identify and prevent terrorism.

MemberCheck: Assisting Financial Institutions in Puerto Rico

Amid the complex web of AML/CFT responsibilities, services like MemberCheck offer support to financial institutions in Puerto Rico. MemberCheck efficiently screens for politically exposed individuals and high-risk names against global sanction, regulatory, law enforcement, and other official lists, saving time and resources.

Additional Resources

  • If you wish to explore how MemberCheck can help you meet your AML obligations and demonstrate compliance for auditing purposes, request a demo here.
  • Remember that this article is intended as general information only and should not be relied on as the sole source of information for your AML obligations and AML program. Please consult your local regulatory authorities for the most up-to-date and complete information.