Last June, the new Instructions for the Prevention, Detection and Control of Money Laundering, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction, issued by the Attorney General's Office (FGR), under the framework of the Anti-Money Laundering Law (LCLDA), came into force. In its Article 2, the LCLDA establishes that every person must submit information to the FGR that allows demonstrating the licit origin of any transaction he/she carries out. This leads us to conclude, then, that every person must prepare the manual and internal policies for the implementation of a money laundering prevention system, and the continuous development of these.

What is the difference between the new Instructions and the prevention systems elaborated before it came into force? Article 4 of the Instructions requires individuals to apply a risk-based approach, which consists of identifying, assessing and understanding the risks of their sector and operation, and applying resources aimed at ensuring that they are effectively mitigated. Therefore, it is necessary to update the manuals and policies that companies had developed in the past, so that they have a risk-based approach and comply with the new provisions.

From the manuals prepared, it is necessary to comply with other obligations, among them, to develop due diligence and KYC policies to identify the final beneficiary of the company's business relationships, to detect and mitigate all unusual or suspicious transactions and report them to the FGR (not only cash transactions), to train employees, to keep a historical record of the files analyzed, and above all, to appoint a compliance officer.
Why is it important to comply? Article 8 of the LCLDA establishes that, if there is any encumbrance due to negligence, impertinence or ignorance of the directors or employees of the companies, there will be a sanction of two to four years in jail.
Therefore, as a Firm we recommend:

• 1. Identify the company's risks;
• 2. Elaborate and/or update the company's manuals and policies, based on the Risk Based Approach ("RBA");
• 3. Elaborate the Annual Staff Training Plan on the new money laundering prevention system;
• 4. Train the company's personnel on the new money laundering prevention system;
• 5. Appoint or renew the compliance officer, and notify the FGR; and,
• 6. Elaborate the "Know your Client" forms and declarations, based on the risk matrix.

We offer you our services, in order to comply with these legal obligations, so that your company has the peace of mind and support of a money laundering prevention system.
For more information about how this may affect your company, please contact our specialized team at bvaldez@bvaldezlaw.com  or  benjamin@bvaldezlaw.com