New regime for the prevention of money laundering and terrorist financing risks

The Superintendence of Companies issued last August 18, 2016, the Basic Legal Circular No. 100.000006, by means of which, in its Chapter X, included changes to the regime applicable to the System of Self-Control and Management of Money Laundering and Terrorism Financing Risk for the Real Sector (hereinafter "Self-Control and Management Systems").

The purpose of the Self-Control and Management System is to prevent and minimize the legal, operational, reputational, financial and contagion risks to which companies may be exposed today.

The fifth paragraph of the aforementioned Circular modified the scope of application of the regulation, indicating that all companies that are subject to the permanent surveillance or control of the Superintendence of Corporations under the terms of articles 84 and 85 of Law 222 of 1995, that belong to any of the following sectors and comply with the following requirements, shall be obliged to comply with it:

Real Estate Sector: That its economic activity registered in the commercial registry or the economic activity that generates the highest operating income or the highest income from ordinary activities, is identified with code L6810 and/or L6820 of the ISIC; and that as of December 31 of the immediately preceding year it had obtained total income equal to or greater than 60,000 SMMLV.

Mining and quarrying sector: That its economic activity registered in the commercial registry or the economic activity that generates the highest operational income or the highest income from ordinary activities is identified with ISIC code B05 and/or B07 and/or B08; and that as of December 31 of the immediately preceding year it had obtained total income equal to or greater than 60,000 SMMLV.

Legal services sector: Its economic activity registered in the commercial registry or the economic activity that generates the highest operating income or the highest income from ordinary activities is identified with ISIC code M6910; and that as of December 31 of the immediately preceding year it had obtained total income equal to or greater than 30,000 SMMLV.

Accounting, collection and/or credit rating services sector: That its economic activity registered in the commercial registry or the economic activity that generates the highest operating income or the highest income from ordinary activities is identified with ISIC code N8291 and/or M6920; and that as of December 31 of the immediately preceding year it had obtained total income equal to or greater than 30,000 SMMLV.

Vehicle commerce sector: That its economic activity registered in the commercial registry or the economic activity that generates the highest operational income or the highest income from ordinary activities is identified with ISIC code G4511 and/or G4512 and/or G4530 and/or 4541; and that as of December 31 of the immediately preceding year it had obtained total income equal to or greater than 130,000 SMMLV.

Building construction sector: The economic activity registered in the commercial registry or the economic activity that generates the highest operating income or the highest income from ordinary activities is identified with ISIC code F4111 and/or F4112; and that as of December 31 of the immediately preceding year had obtained total income equal to or greater than 100,000 SMMLV.

Other sectors: Companies that do not belong to any of the previously mentioned sectors and that as of December 31 of the immediately preceding year had obtained total revenues equal to or greater than 160,000 SMMLV.

The aforementioned Circular brought about changes in the stages and procedures of the Self-Control and Management System, being this stricter in the identification, measurement, control and monitoring of risk; additionally it included greater risk prevention measures such as: 

• Evaluation and analysis of operations, businesses and contracts.
• Due diligence procedures.
• Regulating the handling of the company's cash.
• Controls in the conclusion and execution of business.

The new obliged Companies will have a term of 12 months to implement the Self-Control and Management System as of December 31, 2016.

For the Companies that were already being obliged to implement the Self-Control and Management System, under the terms of the basic legal Circular 100-000005, they will have a period of 12 months from September 1, 2016, to review and adjust their risk prevention and management system policy to the new provisions.

Non-adoption or imperfect adoption of these provisions will make the companies to which the rule is addressed subject to fines that may amount up to 200 legal monthly minimum wages in force.