Financial Intelligence Unit Amends Regulations Applicable to Real Estate Agents or Brokers

On March 18, 2023, the Financial Intelligence Unit (UIF) issued Resolution 43/2024, amending the regulatory framework regarding the prevention of money laundering and financing of terrorism (“ML/TF”) applicable to Real Estate Agents or Brokers, to establish and/or adapt the obligations they must comply with to manage and mitigate ML/TF risks, in accordance with the Financial Action Task Force’s international standards, guides, and guidelines.

Real Estate Agents or Brokers carrying out the following specific activities ("Specific Activities") will be considered as reporting entities (SO):

• Purchasing and/or selling real estate.
• Leasing real estate for an annual amount, in one or more transactions, equal or higher than 300 minimum wages (SMVM).

The main changes include:

1. Preparing a Risk Self-Assessment Technical Report (“Technical Report”) contemplating, at least, the following risk factors: client, offered services, distribution channels and geographic locations, information provided by the UIF or other authorities about ML/TF risks, and all situations that may affect the ML/TF risk. The Technical Report must be self-sufficient. It must be updated every two years and filed before the UIF before April 30.
2. Carrying out an Independent External Review every two years when the SO's annual income exceeds 875 SMVM, or when they carry out 50 or more Specific Activities in a year. The report issued within the framework of such review must be submitted before the UIF within 120 days as from the deadline to submit the Technical Report.
3. Using red flags alert signals to determine whether a Suspicious Transaction Report should be filed, for example, when the amount, type, nature, and frequency of the Specific Activities clients carry out are inconsistent with the clients' backgrounds and economic activities, when they exceed their usual practices, or when the client tries to carry out transactions with counterfeit money, among others.
4. Submitting an Annual Systematic Report including general information (name, address, and activity), accounting and corporate information, types and quantity of specific activities carried out, among others.
5. Segmenting clients according to the risk assigned to each one and establishing different due diligences accordingly.
6. Carrying out ongoing due diligence on regular clients and updating their identification files according to the risk level assigned to them. In this sense, regular customers are defined as those for whom more than one specified activity is carried out within one year and whose accumulated amount is equal to or higher than 700 SMVM.
7. Detailing the information that, as a minimum, the Register of Unusual Operations and the Suspicious Transaction Reports must include.

Finally, the Resolution incorporates an automatic updating mechanism, which uses the SMVM as a reference parameter.

The Resolution is in force as from March 18, 2024. That day, Resolution UIF 16/2012 was repealed. However, certain obligations will be required:

1. The first Risk Self-Assessment Technical Report and the assessment method used must be submitted by April 30, 2026.
2. The first independent external auditor's report must be submitted by August 31, 2026.
3. The first Monthly Systematic Report must be submitted between February 1 and 15, 2025.
4. The first Annual Systematic Report must be submitted between January 2 and March 15, 2025.