Money laundering, the financing of terrorism and the financing of the proliferation of weapons of mass destruction (LA/FT/FPADM) are crimes with serious consequences for a country’s economy. Following FATF (Financial Action Task Force) recommendations, most countries in the region have implemented systems for risk prevention and management in the financial sector. However, just a few have understood that LA/FT/FPADM risks are present in various sectors of the economy in addition to the financial sector. Colombia has made progress in this area and recently the Superintendencia de Sociedades has updated the regulations for the prevention of LA/FT/FPADM focused on companies in the real sector. This new regulation, called SAGRILAFT 3.0, is presented in this article.
Money laundering, the financing of terrorism and weapons of mass destruction (LA/FT/FPADM) are crimes with serious consequences for a country’s economy. Following FATF (Financial Action Task Force) recommendations, most countries in the region have implemented systems for risk prevention and management in the financial sector. In Colombia, for example, the ML and FT Risk Management System (Sarlaft), is a system developed for the entities supervised by the Superintendencia Financiera de Colombia to prevent, detect and report the introduction into the financial system of resources coming from ML/FT related activities. However, understanding that the risks of LA/FT/FPADM are present not only in the financial sector, it is necessary to establish regulations applicable to other sectors of the economy.
In Colombia, the entity in charge of monitoring commercial companies, branches of foreign companies and sole proprietorships in the real sector (agriculture, industry and services [BANREP]) is the Superintendencia de Sociedades. This entity strengthened the regulations in relation to LA/FT/FPADM prevention using the most recent GAFI recommendations that emphasize following a risk-based approach. This resulted in the modification of Chapter X of the Basic Legal Circular, by means of External Circular 100-000016 of December 24, 2020 (Sagrilaft 3.0).
First of all, this new regulation redefines the subjects obliged to comply and establishes criteria based on income, assets and economic sectors to which they belong. All companies supervised or controlled by the Superintendencia de Sociedades, regardless of their economic activity, with total revenues or assets as of December 31 of the immediately preceding year equal to or greater than 40,000 SMMLV, must adopt and comply with this regulation [SUPERSO21]. At the sector level, those obliged to adopt the regulation are: commercialization of precious metals and stones sector, legal services sector, real estate sector, accounting services sector, construction of buildings and civil engineering works sector, and supervision or special regime sector. All of the above, leads to an increase from 1377 to 7500 in the number of companies obliged to comply with Chapter X of the CBJ and implementation of Sagrilaft 3.0.
But what exactly will these companies have to do to comply with the regulation?
First of all, they must implement a Self-Control and Risk Management System – (hence the name SAGRILAFT), which must be formalized in a policy and a manual of procedures for LA/FT/FPADM risk management. Given that each sector/company has its own reality established in a set of operations, services, contracts and products, the development of this management policy must be done individually. Each company should conduct an analysis with an approach based on LA/FT/FPADM risk and its materiality, considering the characteristics of the sector and its operation, including but not limited to the final beneficiaries of the products/services, the countries or geographic areas of operation and distribution channels.
The result of such analysis should be reflected in design, approval, follow-up, disclosure and training procedures and included in the LA/FT/FPADM risk management procedures manual.
Another relevant aspect is the incorporation of “due diligence” for the knowledge of its counterparty at the level of business, operations, products, services and the volume of its transactions in order to have continuous control of the business relationship [SUPERSO21]. There is an obligation of “enhanced due diligence” that implies the adoption of additional and more intense measures for the knowledge of the counterparty, particularly when the companies carry out (i) transactions with virtual assets, (ii) there are counterparties located in non-cooperative countries and high-risk jurisdictions, or (iii) transactions with Politically Exposed Persons (PEP).
The traditional definition of PEPs (i.e., public servants in positions with the potential to use political or administrative privileges for their benefit) is also extended to two new categories in this regulation: foreign PEPs and PEPs of international organizations. PEPs of international organizations are those natural persons who exercise managerial functions in an international organization (i.e., UN, OAS, etc.). Foreign PEPs are those natural persons who perform prominent and prominent public functions in another country (i.e., heads of state, ministers, ambassadors, etc.).
Sagrilaft 3.0 seeks that companies have a good LA/FT/FPADM risk management policy, as well as high compliance standards that generate confidence in the economic environment and facilitate the creation of an environment of transparency and trust. ReconoSER ID is a company committed to this objective and supports you with technological tools that allow you to comply with the regulations. We provide “due diligence” services through our Identity and Compliance Console. In this platform we review the binding lists for Colombia (UN, Terrorist Lists of the United States of America, European Union list of Organizations and persons listed as Terrorists [LIST]), binding international lists in countries of the region, national/international/foreign PEPs and more than 25 national sources of tax records, judicial processes, and complementary information. The information necessary for a complete knowledge of your counterpart is available in a single application.
Rubén Manrique
Bibliography
[BANREP] Sector real. Red Cultural del Banco de la Republica. Consultado Mayo 13 de 2021. (https://enciclopedia.banrepcultural.org/index.php/Sector_real). [SUPERSO21] La prevención de lavado de activos y financiación del terrorismo – SAGRILAFT 3.0, Juan Pablo Liévano 2021. (https://www.supersociedades.gov.co/Noticias/Paginas/2021/La-prevencion-de-lavado-de-activos-y-financiacion-del-terrorismo—SAGRILAFT-3-0-.aspx) [LIST] Prevención del Riesgo de Lavado de Activos, Financiación del Terrorismo y Financiación de la Proliferación de Armas de Destrucción Masiva. SuperSociedades. Consultado Mayo 13 de 2021.(https://www.supersociedades.gov.co/delegatura_aec/informes_publicaciones/lavado_activos/Paginas/default.aspx)