Uruguay Cracks Down on Terrorism Financing: Regulations and Enforcement

In a bid to combat the growing threat of terrorism financing, the government of Uruguay has implemented a raft of regulations and measures aimed at preventing money laundering and terror financing. The country’s financial sector is now subject to strict oversight by several key regulatory bodies.

Key Regulatory Bodies in Uruguay

Central Bank of Uruguay (BCU)

Established in 2004 as the country’s central national organisation responsible for gathering, classifying, analysing, and distributing information on suspected financial activity to law enforcement agencies and international financial intelligence units.

Coordinating Commission against Money Laundering and Terrorism Financing

Reports directly to the Republic’s Presidency Office and is responsible for coordinating anti-money laundering efforts and tackling terrorist funding by creating and implementing a knowledge network to assist public bodies in their work, as well as providing statistics and metrics to assess the system’s effectiveness on a daily basis.

National Secretariat for Combating the Money Laundering and Financing of Terrorism (SENACLAFT)

Reports directly to the Republic’s Presidency and exercises technical autonomy. Its functions include developing policies and national strategies to combat money laundering and terrorism financing, coordinating and implementing training programs, producing periodical statistics on the performance of the money laundering system, enforcing financial penalties, and monitoring compliance with rules on prevention of money laundering by non-financial entities.

Unit of Financial Information and Analysis (UIAF)

Created by the Board of Directors of the Central Bank of Uruguay to provide a platform for analysis and dissemination of financial information.

AML/CFT Regulations in Uruguay

Under the 19,574 Law, financial institutions and non-financial entities are required to establish effective customer due diligence systems and monitoring programs. This includes:

• Screening against Office of Foreign Assets Control (OFAC) and other government lists
• Establishing an effective suspicious activity monitoring and reporting process
• Developing risk-based anti-money laundering programs
• Having Customer Due Diligence (CDD) Programs
• Identifying and verifying information about customers using reliable data and information from sources
• Determining the final beneficiary’s name
• Taking fair actions to check it

AML/CFT Reporting Obligations in Uruguay

Law 19,574 requires financial institutions and non-financial entities to submit different reports. Notable reporting obligations include:

• Reporting transactions that are unusual, lack economic justification, or have an unusual or unjustified complexity
• Financial transactions involving assets whose origin is suspected of illegality

Conclusion

The government of Uruguay has taken a proactive approach in combating the threat of terrorism financing by implementing strict regulations and measures aimed at preventing money laundering and terror financing. The country’s financial sector is now subject to strict oversight, and reporting obligations have been established to ensure that suspicious activity is reported and investigated promptly.