Law 976, Law of the Financial Analysis Unit (Ley de la Unidad de Análisis Financiero), was duly published in the Official Gazette No. 138 of July 20, 2018 and has derogated Law 793, Law of the creation of the Financial Analysis Unit (Ley Creadora de la Unidad de Análisis Financiero), its regulation Decree 07-2013 and its amendment Decree 19-2014.
Below please find a brief review of what we consider important for you to know about its content:
* As stated by Article 2 titled “Definitions”, a suspicious operation is, any act, operation or transaction, isolated, repeated, simultaneous or serial, regardless of the amount thereof, made or attempted by any person natural or legal, which according to the regulations in force, the use or customs of the activity in question, is unusual or lacking of apparent economic or legal justification.
* Regarding the powers granted to the Financial Analysis Unit (UAF): According to Law 976, it has the power to receive and request reports of suspicious transactions, or any other information related to said reports to the obliged subjects. Notwithstanding the foregoing, the UAF may directly request that the obligated subjects and any public or private entity, including mercantile companies, cooperatives, (that among the activities carried out with their associates, include financial intermediation) and Non-Profit Organizations, provide financial or legal information related to operations allegedly related to Money Laundering / Financing to Terrorism / Financing the Proliferation of Weapons of Mass Destruction (onwards ML / TF / FP) and predicate offenses associated with Money Laundering (onwards ML).
* Regarding the obligation to report, this is contained in Article 8 of Law 976, which among other obligations mandates that the obliged subjects who suspect that a client’s assets are linked to ML / FT / FP and Previous offenses associated with the ML at the time of performing or attempting to perform an operation that it requests or upon completion of the analysis of its operations, must report these suspicions immediately to the UAF. In the same way, they will report the operations and assets of fund providers, services, associates, employees, partners and business allies that are suspected to have a relationship with ML / FT / FP and preceding crimes associated with ML. Likewise, said article indicates that natural persons, public and private entities and obligated subjects will be relieved of their duty of secrecy, regardless of whether this has been established by laws or contracts, including, without limitation, banking secrecy, reservation of Microfinance operations, tax secrecy and professional secrecy.
* Article 10 establishes the obligation for the Association of Public Accountants of Nicaragua to establish an entity that centralizes the information of unusual operations or situations identified by the Obliged Subjects under its jurisdiction.
* According to Article 12 of Law 976, it is established that under no circumstances are the obligated subjects, their directors, administrative managers, compliance officers or employees to reveal to their clients, suppliers of funds, services, associates, employees, partners and allies of business or to third parties that:
-Information was sent to the UAF. In this case, the violation of this mandate will be subject to criminal or administrative liability, as appropriate.
-A report concerning suspicious transactions related to ML / FT / FP and preceding crimes associated with ML was sent, has been sent or will be sent to the UAF.
-A criminal investigation regarding their business is in process, or has been concluded in relation to ML / FT / FP activities and preceding crimes associated with ML.
-The decision not to provide a product or service when it has been determined, based on suspicions that the client’s assets come from ML / FT -FP activities.
Additionally, and in accordance with what is indicated in the preceding paragraphs, Law No. 977, Anti-Money Laundering Law, Financing of Terrorism and Financing the Proliferation of Weapons of Mass Destruction (Ley No. 977, Ley Contra el Lavado de Activos, el Financiamiento al Terrorismo y el Financiamiento a la Proliferación de Armas de Destrucción Masiva), has also been enacted and published in the Official Gazette No. 138 of July 20, 2018.
In this Law, Chapter II Article 9, establishes that whose who are considered obligated subjects must inform the UAF directly and without being able to claim any type of secrecy, the natural or legal persons that carry out activities as Financial Institutions, and Activities and Non-Financial Professions, these being the following:
1.Financial Institutions supervised by the Superintendence of Banks and other Financial Institutions:
a. Banks,
b. Financial institutions,
c. Insurance, reinsurance and security companies and insurance intermediaries,
d. Companies of general warehouses of deposit
e. Stock exchange companies,
F. Central of securities,
g. Stock exchange positions,
h. Liquidation and settlement companies,
i. Fund management companies,
j. Investment companies,
k. Pension Fund Management Companies.
l. Representation offices of banks and foreign financial entities,
m. Companies of special regime referred to in the General Law of Banks, Non-Banking Financial Institutions, and Financial Groups.
2. Entities supervised by the National Microfinance Commission:
a. Intermediary Microfinance Institutions
b. Microfinance Institutions.
3. The following entities will be supervised by the UAF in matters of ML / FT / FP prevention:
a. Companies that do not maintain ownership, administration, use of corporate image or links/relationships with banks or other regulated non-banking financial institutions when carrying out the following activities:
i. Issuance and Administration of means of payment.
ii. Factoring operations.
iii. Financial leasing.
iv. Remittances v. purchase and / or exchange of currency.
b. Microfinance institutions that are outside the regulation of CONAMI, regardless of their legal status.
c. Cooperatives that, within the activities carried out with their associates, grant any form of financing or that includes financial intermediation.
d. Pawn and loan houses.
e. Casinos,
F. Real estate brokers,
g. Merchants of precious metals and / or precious stones,
h. Dealers of new and / or used vehicles,
i. Fiduciary service providers.
4. Authorized Public Accountants, registered in the Public Accountants Association of Nicaragua.
5. Any other natural or legal entity that in accordance with Law 977 (or any other specific law that creates it), has been designated as an obligated subject.
Please note that both Law 976, Law of the Financial Analysis Unit and Law 977, Law Against Money Laundering, Financing Terrorism and Financing the Proliferation of Weapons of Mass Destruction must still be regulated, so once the regulation is published, we will expand the information.
If you require additional information please contact Fabiola Urbina at furbina@alvaradoysociados.com.ni