Financial Crime World

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Puerto Rico’s Risk Assessment for Financial Crimes: AML/CTF Supervisors Take Center Stage

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Puerto Rico, an unincorporated territory part of the United States, is subject to numerous U.S. federal laws and regulations aimed at preventing financial crimes such as money laundering and terrorist financing. The Financial Crimes Enforcement Network (FinCEN), a major regulatory body in the United States and Puerto Rico, plays a crucial role in protecting the financial system from unlawful use by gathering, analyzing, and disseminating financial intelligence.

Compliance with AML/CTF Regulations

To comply with anti-money laundering (AML) and combating the financing of terrorism (CTF) regulations in Puerto Rico, financial institutions must implement robust risk assessment programs. The Bank Secrecy Act (BSA) and the USA PATRIOT Act are two primary federal laws that require banks to maintain customer due diligence, screening procedures, and report-filing and record-keeping requirements.

Reporting Obligations

Banks in Puerto Rico are required to submit:

  • Currency transaction reports (CTRs) for cash transactions exceeding $10,000 per day
  • Reports of suspicious activity (SARs) if they suspect money laundering or other criminal activities

Money services businesses (MSBs), including those offering travellers’ checks and money orders, must also report:

  • Cash acquisitions
  • Information on money transfers

Record-Keeping Requirements

MSBs offering money transfer services are required to maintain records of all transactions exceeding $3,000 for a period of 5 years. Exchangers of foreign or domestic currency must retain records of all transactions exceeding $1,000 for the same period.

Conclusion

In Puerto Rico, AML/CTF regulations play a critical role in preventing financial crimes and maintaining national security. Financial institutions, MSBs, and exchangers of foreign or domestic currency are required to implement robust risk assessment programs and maintain accurate records to comply with reporting obligations. The Financial Crimes Enforcement Network (FinCEN) oversees compliance with these regulations, ensuring that the financial system remains secure and free from illicit activities.

Sources

  • U.S. Department of the Treasury, Financial Crimes Enforcement Network
  • Puerto Rico Government, Office of the Commissioner of Financial Institutions
  • Federal Reserve Bank of New York, Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Handbook for Banks and Money Services Businesses