Uruguay has long been regarded as a regional financial center, receiving significant cash and investments from outside, mostly from neighboring nations. Furthermore, it has consistently provided a variety of appealing corporate and financial products to non-resident investors. Within this environment, the nation poses a naturally serious danger in terms of the deposit of profits from foreign-committed crimes, which is its biggest concern in terms of money laundering.
AML/CFT Regulators in Uruguay?
The Coordinating Commission against Money Laundering and Terrorist Financing of the Central Bank of Uruguay (BCU)
Its mission is to coordinate anti-money laundering activities and combat terrorist financing. It reports to the Presidency Office of the Republic. Its responsibilities include developing and executing a knowledge network to support government agencies in their work, as well as providing data and analytics to analyze the system's success on a daily basis. In addition, the Commission may propose that nations with a high risk of money laundering implement financial countermeasures and penalties.
National Secretariat for Combating Money Laundering and Terrorist Financing (SENACLAFT)
The National Secretariat for Combating Money Laundering and Terrorist Financing is a decentralized organization that documents straight to the President of the Republic and has technical autonomy. The 19,574 Law assigns the following tasks to SENACLAFT:
- Create national policies and strategies to fight money laundering and terrorist funding
- Coordinate and carry out the necessary training programs
- Produce and publish periodic statistics on the performance of the money-laundering system
- Enforce the corresponding financial penalties
- Monitor compliance with the regulations on money laundering prevention by non-financial entities bound by law (namely, accountants, lawyers, notaries, direct and indirect users and operators of free zones, real estate companies, and so on).
Know-your-customer (KYC) Requirements in Uruguay
Obligated entities are required to know who their customers are. According to Law 17.835, all obliged companies are required to adopt AML rules, such as adequately identifying consumers, logging transactions over $10,000 in internal databases, and reporting suspicious transactions to the financial intelligence unit (FIU). All financial intermediaries, including banks, currency exchange houses, stockbrokers, insurance firms, casinos, art dealers, and real estate and fiduciary businesses, are subject to this requirement. In addition, lawyers, accountants, and other non-banking professionals who often conduct financial transactions or operate commercial organizations on behalf of other parties are also obligated to identify consumers whose transactions surpass $15,000 and report any suspicious activity.
AML Regulation: Law 19,574
The Uruguayan Parliament enacted Law No. 19,574 on January 10, 2018, which consolidates all anti-money laundering legislation and information into a single text, including the repercussions of noncompliance. The legislation outlines the goals of the Anti-Money Laundering (AML) and Terrorist Financing Commission (FTC), which is overseen by the government and comprised of Ministers and the Presidency Secretary. The FTC will collaborate with the Central Bank of Uruguay's anti-money laundering section. Financial and non-financial entities are required by the 19,574 Law to have the following adequate consumer due diligence procedures and monitoring processes:
- Check against the Office of Foreign Assets Control (OFAC) and other government databases.
- Create an efficient mechanism for monitoring and reporting questionable activities.
- Create anti-money laundering programs that are risk-based.
- Have Customer Due Diligence (CDD) programs in place.
- Identify and validate consumer information using credible data and information from sources.
- Determine the ultimate beneficiary's name and take reasonable steps to verify it.
- Obtain information on the objective of the business relationship and the nature of the companies that will be formed, which should be based on the risk allocated to the client, commercial relationship, or kind of transaction to be made.
- Conduct frequent assessments of the contractual arrangement and transactions, if feasible, to verify that they are in accordance with the information available from the client's expertise and the risk profile assigned to it, including the source of funds.
- Report any strange activities that might indicate criminal activity (e.g., money laundering, tax evasion)