Through a new resolution (Resolution 375, August 17, 2016), the Secretary for the Prevention of Money Laundering (Secretaría de Prevención de Lavado de Dinero, or "SEPRELAD") modified the procedure and information requirements for subjects that are obligated to register with SEPRELAD but are not regulated by a specific government entity, such as the Central Bank or National Stock Commission ("Non-regulated Subjects").
Non-regulated Subjects include (1) national and international non-profit organizations; (2) real estate agents; (3) pawn shops; (4) jewel, metal and precious stones merchants; (5) coin and stamp collectors; (6) art dealers; (7) importers and sellers of motor vehicles; (8) providers of safe deposit boxes; (9) cash transport service providers; and (10) money transfer service providers.
The new procedure extends the time period to present the documents necessary to register from 5 to 10 days, and creates a registry certificate that SEPRELAD issues upon the conclusion of the process.
Under the new procedure, Non-regulated Subjects must first register through the online system. Then, during the next 10 days, they must present to SEPRELAD all documentation required to support the online application. This documentation includes: (1) corporate bylaws (for entities) or national identification card or passport (for individuals); (2) tax registration; (3) record of the last appointment of authorities; (4) commercial license issued by the relevant municipal authority; and (5) a sworn declaration regarding the financial intermediaries with which it does business.
SEPRELAD is a governmental entity that pertains to the Executive branch. It is responsible for enforcing compliance with anti-money laundering norms and has the authority to initiate and conduct investigations into potential violations, and refer cases to the State Prosecutor. Noncompliance with anti-money laundering norms may result in administrative warnings or fines, and may constitute grounds for the initiation of an investigation.
Abbreviated KYC procedure for certain natural person securities investors
Through a new resolution (Resolution 427, September 21, 2016), the Secretary for the Prevention of Money Laundering (Secretaría de Prevención de Lavado de Dinero, or "SEPRELAD") authorized an abbreviated Know-Your-Customer ("KYC") procedure for regulated operators in the stock market, principally brokers operating in Asuncion's Stock Exchange, Paraguay's only stock exchange, with regard to natural persons that wish to invest on their own behalf for annual amounts of up to approximately USD 2,000. In such cases, the operator must only require the completion of an identification form and attach a copy of the person's identification documentation.
Outside of the abbreviated procedure, SEPRELAD's KYC norms require operators to take reasonable measures to (1) obtain and preserve all information that reflects a natural person's ("Client") true identity and that of those acting on the Client's behalf; (2) verify the purpose and nature of the commercial relationship that the Client seeks; (3) implement controls that permit monitoring of the operations made by the Client during the course of the commercial relationship; and (4) implement procedures to maintain the person's registration up-to-date. To comply with these requirements, apart from the person's identity documents, operators generally must ask the Client for: (1) banking, commercial and personal references; (2) a sworn statement of assets identifying the person's business and main activities, with supporting documentation, such as job certificates; and (3) other documents that may be required by the operator's current policies. In addition, the operator must make regular inquiries with the Client in order to keep this information updated.
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