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It is no secret that criminal organizations often hide, hedge or
invest the proceeds from their illicit activities (dirty money)
through legal businesses in order to legitimize it. This is
commonly called money laundering. It is also common knowledge that
certain industries, and in particular casinos (both virtual and
actual), car sales, art trading and real estate have been commonly
targeted by criminal organizations for those illegal purposes.
Costa Rica has not been an exception to this trend.
In the last decade, Costa Rica (as most western countries) has
strengthened its legal framework to prevent it from becoming the
"narcos" (drug cartels) dry cleaning. Just about a month
ago, a new executive decree worth commenting upon was published in
the official journal, which regulates certain business activities
and creates a series of new obligations.
It is called the General Regulation against drug trafficking,
money laundry, terrorism financing and organized crime, intended as
a new, modern and effective legal instrument which avowed purpose
is to adequately respond to the new trends in money laundry and
terrorism financing.
To do this, the Regulation develops a set of duties upon certain
business activities (including non-financial activities) to prevent
funds from criminal sources to be legitimized or actions that could
be used to finance terrorist groups and organized crime. Among the
regulated and specifically mentioned non-financial business
activities are the purchase and sale of real estate, cars, boats,
firearms, fine art and jewelry, as well as –in general-
casinos and gambling businesses. Professional services are also
included in the list. The provisions of the newly published
regulation hence call for lawyers, accountants, developers,
realtors and private lenders to register before the Financial
Intelligence Unit (UIF), a specialized section part of the Drug
Control Agency.
Once registered, the now supervised professional will be legally
bound to obtain and keep all information on the identity of their
clients and/or of the final beneficiary of a given service or
transaction, provided the amount of such transactions is at least
US $5,000 (more than likely always the case). The professional must
have any new client fill-in a "know your client"
information form and request the identification document (whether
cédula, dimex or passport), and keep a copy in a file they
need to open for each such client. If this client is a foreign
entity, it is mandatory to request an official certification
–duly legalized- providing the names and data of all
final shareholders (persons) abroad. Needless to say this is seldom
an easy task.
Yet another obligation is that of keeping commercial transaction
logs identifying the clients, the service and the business
transaction, which records must be kept for at least 5 years. Of
course, all this information must be readily available for the UIF
at their simple request.
Finally, control protocols and procedures must be created by the
aimed professionals or service entities in order to allow them to
obtain sufficient information with regards the source of the funds
from which the transaction and their own fees will be paid, with
special attention to those funds wired from abroad, paid in
international or travelers checks or cash. Any suspicious or
unusual transactions must be immediately reported to the UIF, and,
where multiple cash transactions take place during a month by the
same client, or for the profit of a single beneficiary, that exceed
US $10,000, these too must be immediately reported.
As you can see, these new rules apply to all such professionals
and developers, and entail a legal burden on their shoulders that
presumably will affect their business doings, while, in our view,
not necessarily proving to be effective in the fight against
organized crime.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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