The Prevention Agreement for Other Financially Obligated Subjects No. 002-2018 of August 21, 2018, issued by the Superintendency of Banks of Panama, establishes the registration process of the exchange offices in the Superintendency of Banks.
The provisions of Agreement No. 002-2018 are applicable to all natural or legal persons that provide services for the purchase and sale of coins, banknotes or other monetary instruments, inside and outside the country, in any form, whether or not their activity principal, excluding those that are subject to the supervision of another regulator.
Based on the Agreement's provisions, the exchange offices must register, as a financial obligation, with the Superintendency of Banks in order to comply with the guidelines of Law No. 23 of 2015 that 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 exchange houses 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 liste don this same Article. The information submitted to obtain the registration must be updated once (1) a year.
In addition to the aforementioned, the Agreement provides that every exchange house must designate at an executive level a person responsable 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 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).
The Agreement establishes that the Superintendency of Banks may cancel the registration of exchange offices that incur the following:
- Do not count on manuals, systems, policies and procedures regarding the prevention of money laundering, financing of terrorism and 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.
- The absance of an effective computer system that allows to identify, 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.
- Not having a compliance officer that meets the characteristics of operational independence and the competencies necessary for the proper performance of their duties.
- Not preparing the Financial Analysis Unit (UAF) in compliance with the provisions of Law No. 23 of 2015.
- Perform prohibited or unauthorized operations for money exchange offices.
- 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 exchange house 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 exchange that has not made the registration process referred to in Agreement No. 002-2018.
This Agreement came into force on September 14th, 2018, the date of promulgation of Agreement No. 002-2018 in the Public Gazette. In the case of exchange houses that are currently operational, they will have up to one hundred and twenty (120) days after the entry into force of the Agreement to begin the registration process with the Superintendency of Banks.
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