Comprehensive amendment to the Superintendence of Companies Resolution on AML/CFT/FPWMD – New “SAGRILAFT” measures

On December 24^th, 2020, the Superintendence of Companies issued External Resolution No. 100-000016 (the “New AML/CFT/FPWMD Resolution”).  The New AML/CFT/FPWMD Resolution comprehensively amended existing AML/CFT/FPWMD Resolution regarding Money Laundering (“ML”), Financing of Terrorism (“FT”) and Financing of Proliferation of Weapons of Mass Destruction [1] This is a new risk that was not comprehended as part of the previous regulation.  (“FPWMD”) (“SAGRILAFT” [2] Before the new regulation, the system was called SAGRLAFT. ).

Please find below a summary of the most significant changes and new measures adopted in this matter:

Companies obliged to implement a SAGRILAFT or other AML/CFT/CFPWMD measures

The new regulation significantly increased the number of companies required to implement a SAGRILAFT, since the criteria that ultimately determines the obligation to implement such risk management system was modified.

Among the included amendments are, among others, (i) the inclusion of Virtual Assets [3]  A Virtual Asset is digital representation of value that can be digitally traded or transferred, and can be used for payment or investment purposes, as an economic sector; and (ii) the value of total assets or gross income required for each economic sector, as provided by the New AML/CFT/FPWMD Resolution, was significantly reduced.

The New AML/CFT/FPWMD Resolution adopted the definition of NFDPA to refer to the designated non-financial business/professional activities of companies, which have special implications for the purpose of the new resolution, that is: (i) real estate agents’ sector; (ii) precious metals and precious stones trading sector; (iii) account services sector; (iv) legal services sector; (v) building and civil engineering construction sector; (vi) Virtual Assets sector.

Additionally, the New AML/CFT/FPWMD Resolution provides that NFDPA that do not comply with some of the requirements to be obliged to implement a compliance systema under section 5 of said resolution must, in any case, comply with the Minimum Measures Regime provided for in section 6 of the New AML/CFT/PFWMD Resolution.

Important amendments introduced to the SAGRILAFT

A new risk to manage

The New AML/CFT/FPWMD Resolution includes, among the risks to be managed as part of the SAGRILAFT, the FPWMD risk.  Thus, it is necessary to update all documents associated with SAGRILAFT, as well as the risk matrices, in order to provide measures for the management and administration of said risk.

Notions

As part of the New AML/CTF/FPWMD Resolution, new notions relevant to the SAGRILAFT were adopted, and others that were already established in the previous regulations were amended. Among others (i) the inclusion of a definition for Virtual Assets; (ii) amendments to the PEP concept; and (iii) adjustments to the final beneficial owner’s definition.

Corporate structure – responsibilities over the SAGRILAFT

The New AML/CFT/FPWMD Resolution introduced important amendments in relation to the previous regulation applicable to the Compliance Officer, among which are the inclusion of new duties and new requirements and restrictions for its appointment.

Likewise, new roles and responsibilities regarding SAGRILAFT were included and amended regarding the board of directors and legal representatives.  In contrast to the previous regulation, special mention is made in relation to the duties of the statutory external auditor in this regard.

Due diligence

The New AML/CFT/FPWMD Resolution establishes several changes in relation to the applicable regulation to the due diligence procedures.  It is particularly important to mention the inclusion of the obligation to perform an intensified due diligence procedure on counterparties that represent a higher ML/FT/FPWMD risk.

Sanctions

The New AML/CFT/FPWMD Resolution provides that not only the company is responsible for the adequate implementation of the SAGRILAFT or the Minimum Measures Regime, but also the compliance officer, the administrators, and the statutory auditor in their respective areas of responsibility.  Therefore, said officers and directors may also be subject to and administrative investigation by the Superintendence of Companies and may be sanctioned with fines of up to 200 MLMW.

Conclusion

The New AML/CFT/FPWMD Resolution substantially amended and supplemented the previous AML/CFT/FPWMD regulation.  Thus, many companies will now be obliged to implement a SAGRILAFT or the Minimum Measures Regime. Also, many of the companies already obliged under the previous regulations will have to substantially amend their ML/FT/FPWMD management and risk administration systems.

The deadline for implementing the SAGRILAFT or making the corresponding amendments for it to comply with the new regulations is May 31^st of 2021.