Financial Intelligence Unit News on Entities that Purchase and Sell Art, Jewelry, and Luxury Goods

On March 26, 2023, the Financial Intelligence Unit (UIF) issued Resolutions 54/2024 and 55/2024, replacing Resolution 28/2011 and amending the regulatory framework regarding the prevention of money laundering and financing of terrorism (ML/TF) applicable to individuals or legal entities dedicated to purchasing and selling art, antiques, philatelic or numismatic investments, luxury goods, or to  exporting, importing, processing, or industrializing jewelry or goods with precious metals or stones. The aim is to establish and/or adapt the obligations that 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.

Accordingly, individuals and/or legal entities, or other structures with or without legal personality, dedicated to the purchasing and selling art, antiques, philatelic or numismatic investments, and/or luxury goods, or exporting, importing, processing, or industrializing jewelry or goods with precious metals or stones will be considered reporting entities (SO).

It is worth mentioning that the above definition covers the entire production chain, from the mining process to the sale of the final product, thus including the mining sector, intermediary buyers and brokers, gemstone cutters and polishers, precious metal refiners, jewelry manufacturers and craftsmen, retailers, and secondary market sellers such as production traces, among others.

SO will have to:

1.    Prepare a Risk Self-Assessment Technical Report including, at least, these 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.    Carry out an Independent External Review every two years, when the transactions exceed 180 minimum wages (SMVM).
This report issued within the framework of such review must be submitted before the UIF within 120 days as of the deadline to submit the Technical Report.
3.    Make a risk tolerance statement, duly grounded and approved by the administrative body or the highest authority. 
Once approved, it must be submitted before the UIF together with the Risk Self-Assessment Technical Report, before April 30 of the calendar year in which the submission is to be made.
4.    Submit an Annual Systematic Report including general information (name, address, and activity), accounting and corporate information, types and quantity of clients, among others.
5.    Segment clients according to the risk assigned to each one and establish different due diligences accordingly.
6.    Carry out ongoing due diligence on regular clients and update their identification files according to the risk level assigned to them. Regular clients are thus defined as those who carried out more than one transaction within one year.
7.    Detail of the information that the Register of Unusual Operations and the Suspicious Transaction Reports must minimally include.
8.    Finally, incorporating an automatic updating mechanism that adopts the SMVM as a reference parameter.

The Resolutions are in force as of March 26, 2024. That day, Resolution UIF 28/2011 was repealed. However, certain obligations will be required: 

1.    The first Risk Self-Assessment Technical Report, the method used, and the risk tolerance statement must be submitted by April 30, 2026.
2.    The first independent external auditor's report—if applicable—must be submitted by August 31, 2026.
3.    The first Annual Systematic Report must be submitted between January 2 and March 15, 2025.