The Prevention Agreement for Other Financially Obligated Subjects No. 001-2018 of August 21, 2018, issued by the Superintendency of Banks of Panama, establishes the registration process for money remittance companies before the Superintendency of Banks.

The provisions of Agreement No. 001-2018 are applicable to all natural or legal persons that provide money transfer services, either through transfer systems or transfer of funds, compensation of funds or by any other means, inside and outside of the country, whether or not its main activity.

Based on the Agreement's provisions, money remittance companies must register, as a financial obligation, with the Superintendency of Banks in order to comply with the guidelines of Law No. 23 of 2015 which adopts measures to prevent money laundering, financing of terrorism and financing the proliferation of weapons of mass destruction. The aforementioned Law is intended for supervisory bodies, among others, to establish measures to identify, evaluate and understand the risks and consequences of money laundering, as well as establish the appropriate controls for their mitigation.

Article 4 of Agreement No. 001-2018 establishes the requirements for the registration of the money remittance company as a financial obligor. For said purposes, whoever requests the registration must present through a suitable lawyer an application for registration accompanied by the documentation that is listed on this same Article. The information submitted must be updated once (1) a year.

In addition to the aforementioned, the Agreement provides that every money remittance company must designate at an executive level a person responsible for compliance, who will perform the functions of preventing money laundering, financing terrorism and financing the proliferation of weapons of mass destruction. Said executive will be responsible for ensuring the implementation of a compliance program, which refers to the set of policies and procedures that guide the employees of the said company to comply with the legal provisions and current internal policies on prevention. The person in charge of compliance will also be the liaison person with the Superintendency of Banks and with the Financial Analysis Unit (UAF).

Remittance companies must (i) pay special attention to client's transactions whose remittances are directed or come from persons in territories or countries not belonging to the Financial Action Task Force (FATF) or to any of the regional groups of similar nature or are subject to special measures for not applying the FATF Recommendations; (ii) to perform enhanced due diligence on the transactions of clients made to countries or jurisdictions considered high risk and those that maintain relations with said countries; and, (iii) have evidence of the management they perform for high-risk transactions.

The Agreement establishes that the registration of remittance companies may be canceled by the Superintendency of Banks if they incur in the following:

  1. Do not count with manuals, systems, policies, and procedures regarding the prevention of money laundering, financing of terrorism and the financing of the proliferation of weapons of mass destruction. They must be effective in assessing risks considering the products, jurisdictions, distribution channels and type of customers they serve.
  2. The absence of an effective computer system that allows identifying, monitor, detect alerts, accumulate alerts to process and monitor operations and compliance with regulations on the prevention of money laundering, financing of terrorism and financing of the proliferation of weapons of mass destruction.
  3. Not having a compliance officer that meets the characteristics of operational independence and the competencies necessary for the proper performance of their duties,
  4. Not preparing the Financial Analysis Unit (UAF) reports in accordance with the provisions of Law No. 23 of 2015.
  5. Perform prohibited or unauthorized operations for money remittance companies.
  6. Do not present the yearly update of the registration documents.

Said Agreement also indicates that in the event that the Superintendency of Banks has knowledge or well-founded reasons that indicate that a natural or legal person is exercising the activity of money remittance company without the corresponding registration, it will be able to examine its books, accounts and other documents, in order to determine such a fact. Additionally, by virtue of what is stated in article 15-A2 of Agreement No. 9-2015, through which the sanctioning administrative procedure is established for possible infractions, the Superintendency of Banks may request cancellation from the Ministry of Commerce and Industry, removal or suspension of the license or other authorizations granted to the money remittance company that has not completed the registration process referred to in Agreement No. 001-2018.

This Agreement came into force on September 14th, 2018, the date of its promulgation in the Public Gazette. In the case of money remittance companies that are currently operational, they will have up to ninety (90) days after the entry into force of the Agreement to begin the registration process with the Superintendency of Banks.

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