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On March 20, 2017, the Executive Decree that issued the Regulation for the application of the Law for the Prevention of Money Laundering and the Financing of Crimes entered into force.

The most relevant regulations for the application of the aforementioned law are

Entities and subjects bound by this law

  • The definition of regularity, stating that, this action is configured when enterprises and natural persons, whose main line of business, are: car, aviation and boat dealerships, as well as, real estate brokerage and construction; make a transaction that exceeds the legal threshold for the period of 4 months. 

Measures to be taken by the subjects required to report financial operations and transactions 

  • A Money Laundering Prevention and Crime Financing manual must be developed and implemented in order to assess, prevent and detect cases related to money laundering or the financing of crimes.
  • The aforementioned manual must be presented to the Unit of Financial and Economic Analysis. This institution has to approve the latter, in order to be implemented by the company.
  • The Institutions of the Financial System must comply with an extra requisite, the approval and implementation of an Ethics Code, in order to ensure the adequate functioning of the Risk Assessment Program.

The following information must be required and registered through reliable means by the entities bound by this law.

  • Registration of the client’s information (applies to companies and natural persons): names, addresses, identification number (passports for foreigners), nationality, and single taxpayer registration number.
  • The aforementioned information must also be provided regarding the beneficiaries of the transactions.
  • Concerning the transaction(s), the following information must be provided: date, type of transaction, acts or contracts carried out, currency used and the city where the transaction took place.

Acts of control that can be carried out by the Unit of Financial and Economic Analysis:

  • Require any document, paper or electronic, that is related to the business or operations that are bound by this law. The subject or entity cannot oppose to these requirements, not even by pleading it is confidential information.
  • These requirements and controls can be performed in situ o extra situ.

Requirements to be met by the Compliance Officer

  • The Compliance Officer must obtain a registration code from the Unit of Financial and Economic Analysis within 30 days of this Regulation coming into law.
  • Compliance Officers must have at least 120 hours of training to be approved by the governing body, in order to perform its compliance duties inside the financial institutions.
  • Large corporations are allowed to have only one compliance officer for all the subsidiaries and companies that make up the enterprise.
  • This obligation does not apply to natural persons.

Article 15 sets out the duties for Compliance Officers. Amongst them we highlight:

  • Carrying out the corresponding controls on operations and transactions that exceed the legal threshold.
  • Sending the reports established by the Law to the Unit of Financial and Economic Analysis.
  • Planning and training the personnel from the company in order to comply with the institution’s Money Laundering Prevention and Crime Financing manual.

The specific reports that have to be sent to the authorities have been addressed in a previous article about the AML, and are set on article 19 of this law. However, this Regulation sets out a new report for Unusual and Unjustified Operations, which is an analysis of the transactions made by companies or natural persons that do not correspond with their economic and behavioral profile. It also covers, economic transactions in which the resources have not been justified.

There are two types of sanctions to be applied by the Unit of Financial and Economic Analysis to the Compliance Officers. The severity of these sanctions depends on the seriousness of the offense. A temporary suspension will be imposed to the Compliance Officer when he or she has not verified compliance with the prevention manual.

A cancellation of the registration will be imposed when: the causes for temporary suspension have not been corrected and when the irregularities committed were known and abetted by the compliance officer.

Politically Exposed People

These are people who work or have worked for the state in the past year. As such, a list of these public officials will be created for Compliance Officers to report and have tighter controls over the transactions and commercial relations these people establish. This Regulation also covers their families and related persons transactions and commercial relations.

When entering into business or signing contracts with a Politically Exposed person or their family, an extensive due diligence must be performed by the authorities or governing bodies.


Martin Gangotena received his LL.M from Loyola University Chicago, has a diploma on International Criminal Law from Leiden University and is currently a PhD candidate for Universidad Castilla La Mancha.