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 in Spanish), came into force. Article 2 of the (LCLDA in Spanish) establishes that all persons must submit information to the FGR to demonstrate the lawful origin of any transaction they carry 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 developed prior to its entry 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 to ensure that they are effectively mitigated. Therefore, it is necessary to update the manuals and policies that companies have developed in the past, so that they are risk-based and comply with the new provisions.


From the manuals that have been developed, there is a need to comply with other obligations, These include developing due diligence and KYC policies to identify the beneficial owner of the company's business relationships, detecting and mitigating all unusual or suspicious transactions and reporting them to the FGR (not only cash transactions), training employees, keeping a historical record of the files analyzed, and above all, appointing a compliance officer.


Why is it important to comply? Article 8 of the LCLDA states that, if there is any negligence, inexperience, or ignorance on the part of the directors or employees of the companies, there will be a penalty of two to four years imprisonment.


Therefore, as a Firm we recommend:

  • Identify the company's risks.
  • Prepare and/or update the company's manuals and policies, based on the Risk Based Approach ("RBA").
  • Draw up the Annual Staff Training Plan on the new money laundering prevention system.
  • Train the company's staff on the new money laundering prevention system.
  • Appoint or renew the compliance officer, and notify the FGR; and,
  • Prepare the "Know your customer" forms and declarations, based on the risk model.