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EL SALVADOR - CENTRAL RESERVE BANK APPROVES TECHNICAL STANDARDS REGARDING MONEY LAUNDERING, FINANCING OF TERRORISM AND FINANCING OF PROLIFERATION OF WEAPONS OF MASS DESTRUCTION RISK MANAGEMENT

Sep/2022

On September 23rd, 2022, the Standards Committee of the Central Reserve Bank of El Salvador approved the NRP-36 named "Technical Standards for the Risk Management of Asset and Money Laundering, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction", which will enter into force on October 26th, 2022, and as of that date replaces NRP-08 "Technical Standards for the Risk Management of Asset and Money Laundering, and Financing of Terrorism" approved on November 14th, 2013.

 

The subjects obligated to comply with this new Technical Standards are, among others, the following: Salvadoran banks, foreign banks established in the country, financial conglomerates, pension fund administrators, insurance companies, stock market participants and auxiliaries, cooperative banks, savings and loan companies and federations, companies that offer complementary services to financial services, companies that provide electronic money, any company or institution that, due to its line of business or commercial activity, or by future legal mandate, is integrated into the financial system. 

 

The aim of NRP-36 is providing the minimum guidelines for the adequate risk management of asset and money laundering (AML), financing of terrorism (FT) and financing of the proliferation of weapons of mass destruction (FPWMD), so entities that are part of the Financial System can prevent such risks, detect unusual transactions, and submit the reports in a reasonable and appropriate way.

 

Likewise, the approval of NRP-36 is consequent to the need to adapt the technical regulations to the Instructions of the Financial Investigation Unit (FIU) approved by means of Resolution Number 380 of the Attorney General of the Republic, which has been in force since June 6th of this year.

 

The most significant provisions of this Technical Standard are the following:

 

1) The evaluations to be made by the Compliance Officer, on the due and timely compliance with the Law Against of Asset and Money Laundering, its Regulations, the FIU Instructions and other related legislation shall be made trimonthly and shall be submitted to the Board of Directors or equivalent body within the three months following the evaluated period.

 

2) In addition to informing the Superintendency of the Financial System of the appointment of the Compliance Officer and Alternate Compliance Officer, the subjects obliged to comply with the NRP-36, must submit to the Superintendence of the Financial System, the following information: the organizational structure of the Compliance Officer's Office, the Annual Training Plan, the report of the Compliance Officer related to the management carried out for compliance with the policies and procedures for the prevention of AML/FT/FPWMD, the result of the evaluation of the internal audit and the policy, manuals and/or internal rules related to the prevention of AML/FT/FPWMD.

 

All of the above must be reported within a maximum period of 10 working days after they are approved or known by the Board of Directors or equivalent body.

 

3) Regarding the measurement of AML/FT/FPWMD risks, it shall be necessary to determine the probability of occurrence of the referred risks and qualitative and/or quantitative criteria may be implemented. In addition, the obligated subjects must define the periodicity for evaluating the risk level by means of their AML/FT/FPWMD risk matrix.

 

In this regard, obligated subject must submit to the Superintendency of the Financial System a report on the results of AML/FT/FPWMD risk management.

 

4) It makes a classification of risk factors that, as a minimum, must consider the variables of customers, employees, products and services, distribution channels and geographic areas. In addition, the same regulation also segments the aforementioned risk factors, considering particular circumstances for each one of them. As an example, the risk factor "customers" is segmented, at least, by economic activity, products and services used, distribution channels, and operations performed.

 

5) Finally, the approved Technical Standards contain complementary obligations to those established in the Law Against of Asset and Money Laundering, its Regulations, the Instructions of the FIU and other applicable provisions, which must be considered in the implementation of the Integral AML/FT/FPWMD Prevention System of each of the obligated subjects.

 

We remain at your service for any queries you may have.

 

´╗┐Fernando Montano

Partner

fernando.montano@ariaslaw.com

 

Mayra Brito

Associate

mayra.brito@ariaslaw.com


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