Financial Crime World

Title: Uruguay Cracks Down on Money Laundering with New Financial Compliance Regulations

Uruguay’s new financial regulations, enacted through Law 19,574, aim to strengthen the country’s financial system against money laundering and terrorist financing (AML/CFT). These regulations require both financial and non-financial institutions to implement stringent AML/CFT measures. Here’s a more detailed look into the essential components of these regulations:

Essential Components of Uruguay’s Financial Regulations

  1. Effective Customer Due Diligence Systems Financial institutions must establish robust Customer Due Diligence (CDD) procedures that monitor their client base:

    • Rigorous client identification and verification
    • Ongoing CDD updates

  2. OFAC and Government Lists Screening Institutions must check clients against the Office of Foreign Assets Control (OFAC) and other relevant government lists to prevent illicit funds from entering the financial system.

  3. Suspicious Activity Monitoring and Reporting Institutions must maintain a system for monitoring and reporting any suspicious activity that could indicate money laundering or other criminal activities.

    • Regularly review transactions against specific criteria
    • Reporting any potentially suspicious activity to the regulatory authorities

  4. Risk-Based AML Programs Financial institutions should develop risk-based AML programs tailored to their unique risk profiles.

  5. Customer Due Diligence Programs Detailed CDD procedures should be established, including:

    • Identification and verification of customers
    • Determination of ultimate beneficial owners
      • Can be an individual, trust, investment fund, or legal entity
      • Holds at least 15% of the capital, voting rights, or authority

  6. Establishing the Purpose of Business Relationships Before onboarding a new client, institutions must:

    • Gather information on the purpose of the business relationship
    • Consider potential risks associated with the client or deal

  7. Regular Reviews of Contractual Arrangements and Transactions Institutions must conduct ongoing reviews of client relationships to:

    • Ensure adherence to compliance guidelines
    • Verify the legitimacy of transactions

  8. Reporting Suspicious Activity Institutional obligations include reporting any suspicious activity to the regulatory authorities, such as:

    • Money laundering
    • Tax evasion