Preventive and repressive measures against money laundering and terrorist funding entered in force last September, 17 by means of Law no. 83/2017, of August 18. Some of the measures within a pack of prevention and repression were forecast for regulation. New concepts, such as the “beneficial owner” are in the actual debate as the respective national register regime will be inforce only in November.
The law introduces important and significant changes:
- The concept of “politically exposed person” was broadened to include close family members and people recognized as closely associated. The new law shows an evident broadening of its subjective scope (actually dealers operating bingo halls (although with the possibility of total or partial exemption by the Government, with the exception of casinos, according to a specific risk assessment); real estate entities that dedicate themselves to leasing; economic operators engaged in auctioning, import or export of rough diamonds; entities engaged in the distribution of funds and securities; certified accountants, are now obliged entities).
- As for financial entities, now also affected will be: (i) payment institutions and electronic money institutions based in another Member State of the European Union acting in national territory through agents or distributors; (ii) real estate investment companies and self-managed real estate investment companies; and (iii) social entrepreneurship societies and self-managed specialized alternative investment companies.
- The new law also strengthens internal control measures and procedures, being worthy to note the reinforcement of the duty of regular (and registered) training, the need for segregation between the administrator in charge of the compliance group (and even the board itself), and the compliance responsible within the new law (a kind of head of compliance adapted to the new legal regime), resulting from independence and decision autonomy.
- It also reshapes the configuration of the criminal type of laundering and dramatically amplifies neocriminalizations. The breach of the duties and obligations provided for in the new law constitute a wide range of offenses which, in the limit, may amount to € 5,000,000.00 (in the case of a legal person or similar entity) and € 1,000,000.00 (in the case of natural people), maximum limits that may even be raised to double if there is a financial benefit of more than € 500,000.00.
- In the case of legal entities which are credit or financial institutions, gambling operators in casinos and dealers operating bingo halls, betting and lottery winners and entities covered by the Legal Framework for Online Gambling and Betting, the offenses may correspond to 10% of the total annual turnover, if it’s a higher value than the regular and aforementioned limits.
- Regarding additional penalties, the loss of the economic benefit obtained and the closure of a commercial establishment can also be applied, while still highlighting the prohibition of business dealings with the State and the impossibility of applying for European Funds.
- Companies must turn to their own partners to map them; if they do not cooperate, they can lose their holdings in favor of the company for the balance sheet price. Public authorities may request information on the prevention of money laundering and terrorist funding, access mechanisms, procedures, documents and information regarding the duties of identification, effective diligence and conservation of beneficial owner information, while ensuring the proper functioning of the automatic exchange of information required in the field of taxation.
- Giving greater visibility to sanctioning, the new law requires that the conviction be published on the internet site of the supervisory and control authorities. If an administrative decision is challenged in court, or in the case of an appeal, the recurrent may be confronted with an even more severe condemnation overriding the general principle of prohibition of the reformatio in pejus.
- The State declared a genuine fight against money laundering and terrorist funding, which also involves, among other mechanisms, as informed in previous posts on Global Compliance News, the prohibition of cash payments in excess of € 3,000.00 and the abolition of bearer securities, namely shares.