The Superintendence of Financial Services of the Central Bank of Uruguay issued the Circular Nº 2238, giving a new wording to article 302 of the Compilation of Standards for the Regulation and Control of the Financial System, Book III; in relation to the policies for the protection of the financial system against illicit activities. With this setting in the regulations, the international trend is being followed, showing the need of the appropriate knowledge of the customer. In general terms, it is established that the institutions regulated by the BCU must have effective procedures that allow them to take cognizance of transactions made by both individuals and companies that handle third-party funds as usual practice.

The first step is to distinguish between two types of customers, those that are not subject to regulation and financial supervision, and those that are.

For customers that are not subject to regulation that handle third-party funds as usual practice, article 302 provides a list of activities considered to be of higher risk, for which the institution must apply enhanced due diligence procedures:

• Customers making transactions for higher amounts than USD 600,000 in a calendar year, the monitoring should allow identification of the final beneficiary for all transactions exceeding USD 10,000. It is clarified that the identification should include as a minimum, the basic data of the person.

• Customers making transactions for amounts higher than USD 50,000, even though the cumulative does not exceed the amount of USD 600.000, final beneficiaries must be identified.

In practice, it is necessary for the customer to report in a correct and proper way the composition of the final beneficiaries for operations that reach the indicated amounts, and the institution should also keep a control register of these beneficiaries, as a way of accumulating operations. Depending on the amounts related to each final beneficiary and the risk that has been associated with the operation, the institution shall request the additional information deemed relevant for the determination of the legality of the funds.

The article specifically establishes that for those who manage funds from the sale of their own property (built or not) must carry out the same procedures as for customers who manage funds of third parties; having to be applied to the buyers of the properties the same enhanced due diligence procedures.

In the case of customers subject to regulation and financial supervision, it shall be applied the same procedures listed above, with the exception of the transactions with financial institutions with foreign correspondents; or in the case of operations related to institutions that have been evaluated favorably in regards to their policies of prevention and control of money laundering and financing of terrorism. Likewise, information of the customers and the origin of their funds must be obtained when the operation, by understanding of the institution, presents such a risk that requires it.

If the customer, subject to regulation or not, refuses to provide the information of the final beneficiaries to the institution, this one should evaluate the fact of reporting the transaction as unusual or suspicious to the authorities.

Lorena Cortalezzi, Uruguay