New applicable Anti-Money Laundering and Financing of Terrorismregulations apply to Pension Fund Managers

Through Resolution No 282/2008 (“Resolution 282”), published in the Official Bulletin on September 22, 2008, the Financial Information Unit (“the UIF”) implemented the rules to be followed by Pension Fund Managers (“AFJP’s”) in their capacity as reporting entities under Section 20, Subsection 1 of Law No 25,246 (the “Anti-Money Laundering Law”). 

The rules to be followed by the AFJPs pursuant to Resolution 282 are similar to the ones already established by the UIF for other categories of reporting entities. In general, UIF’s directives require the implementation of “Know Your Customer” procedures and the storage of documentation; list examples of suspicious transactions and establish the procedures to report them. In particular, Resolution 282 defines the guidelines to be followed by AFJPs in order to monitor direct deposits made in an affiliate’s account in excess of the mandatory contributions -- including voluntary contributions of the affiliate or agreed deposits by its the employer or a third-party --, and report transactions deemed unusual or suspicious. 

1.    Solicitation, registration and storage of information

In furthering the “Know Your Customer” policy, Section III of Exhibit I establishes that compliance with such policy must begin at the time of affiliation of an individual with the AFJP, in addition to the mandatory compliance with the requirements imposed by the AFJPs’ Regulatory Agency.

Under the Section entitled “General Requirements”, Resolution 282 lists the information that must be required when a direct deposit is made in an AFJP by either (i) an affiliate; (ii) an employer or third party; or (iii) public officers.

In addition to the general requirements, Resolution 282 provides that further identification procedures must be adopted when customers or third parties are not physically present for proper identification. Also, if an agent acts on behalf of the principal, measures intended to obtain information about the true identity of the principal must be taken.

Section IV of Exhibit I lists the minimum information that an AFJP must register regarding each affiliate, such as (i) identification of the affiliate, the employer or the third-party that makes the deposit; (ii) details of payments, and (iii) transactions that imply money transfers from abroad. The registry must include information about all the direct disbursement transactions, regardless of their amount. 

The information gathered under the “Know Your Customer” policy must be kept and stored for a minimum period of five years from the execution of the transaction and original documentation or certified copies by AFJP regarding each transaction must be stored for a minimum period of five years counted from their execution. Contracts for agreed deposits must be kept and stored permanently in accordance with current regulations.

2.    Monitoring and reporting of unusual or suspicious transactions

Section VI of Exhibit I provides that procedures for reporting unusual or suspicious transactions must be based on (i) the AFJP’s regular market practices, (ii) the experience and expertise of the reporting entities, and (iii) the implementation of “Know Your Customers” policies. 

A “Procedure for Unusual or Suspicious Transactions Detection” (the “Procedure”) is included under Section VI. This procedure establishes a mechanism intended to obtain proper identification of all the customers, according to risk management policies implemented by each AFJP. As part of the Procedure, the monitoring of transactions defined as direct deposits and their systematization under a risk matrix are required in order to match the transaction with the customer’s profile.

With respect to the opportunity to report suspicious transactions, Resolution 282 establishes that once the transaction deemed unusual or suspicious is detected, a Report of Suspicious Transaction (the “Report”) must be prepared. The Report and the supporting documentation must be filed with the UIF within 48 hours from the time the decision to prepare the Report was reached. Resolution 282 provides that not only suspicious transactions that are effectively executed must be reported, but also those that are merely attempted.

3.    Unusual or Suspicious Transactions Guide for AFJPs

Exhibit II of Resolution 282 provides an “Unusual or Suspicious Transactions Guide for AFJPs” (the “Guide”). The transactions listed in the Guide are examples of transactions that could be used for money laundering and terrorism financing purposes.

Finally, Exhibit III of Resolution 282 contains a model of the Report to be completed and filed with the UIF if unusual or suspicious transactions are detected.