Money and asset laundering are a latent risk for all companies, and they must clearly strengthen their implementation systems for its prevention. Therefore, they must responsibly assume and comply with the sustainable development of a Comprehensive Money and Asset Laundering Prevention System, and commit to the regulatory obligations in this area.
In El Salvador, all commercial companies, branches of foreign companies, non-profit organizations, among others—without exception, regardless of their commercial activity or corporate purpose—are required to register and implement a risk prevention system, an obligation supervised by the Financial Investigation Unit (UIF), attached to the Attorney General’s Office (FGR) .
Therefore, to comply with current regulations, it is necessary to apply the NEW INSTRUCTIONS FOR THE PREVENTION, DETECTION AND CONTROL OF MONEY AND ASSET LAUNDERING, FINANCING OF TERRORISM AND THE FINANCING OF THE PROLIFERATION OF WEAPONS OF MASS DESTRUCTION , which came into force on June 7, 2022 in El Salvador.
In which, we can identify that among its main regulations it establishes that all companies or entities registered in El Salvador are required to appoint a PRINCIPAL COMPLIANCE OFFICER AND AN ALTERNATE.
In this sense, the objective of this publication is to provide our clients with guidelines that allow them to identify the importance of appointing a PRINCIPAL AND ALTERNATE COMPLIANCE OFFICER , in addition to the requirements and aspects that these professionals must meet and which we describe below:
- Compliance Officers must have a university degree;
- Both the Principal and Alternate Compliance Officer must reside in El Salvador;
- Another essential requirement for Compliance Officers is to have specialized knowledge of the financial, operational, and legal aspects of the commercial activity to which the company or entity they represent is engaged;
- Compliance officers must be properly trained in the prevention and management of risks associated with preventing and combating money laundering (ML), terrorist financing (TF), and financing of the proliferation of weapons of mass destruction (FPM).
Other elements that companies or entities must take into consideration regarding the PRINCIPAL AND ALTERNATE COMPLIANCE OFFICER are the following:
- Compliance Officers shall enjoy independence and autonomy in the exercise of their functions and obligations.
- Compliance Officers may not be dismissed, sanctioned, or removed for fulfilling the responsibilities inherent to their functions and obligations.
- If a company or entity wishes to appoint a previously hired employee as Compliance Officer, they may do so provided they perform any administrative duties or positions other than those of an accountant, internal auditor, or others related to these areas, in order to avoid a conflict of interest in the performance of their duties and obligations.
- Finally, it is important to mention that due to the nature of the Compliance Officer’s duties, it is not possible to make appointments through subcontracting; that is, the hiring process must be done directly with the individuals who will hold the position of principal or alternate.
The topic of money laundering is extremely broad, and due to its mandatory compliance, all companies and entities must be aware of the latest updates on this matter in order to avoid any type of risk that a company or branch may incur.
Therefore, if you require specialized advice to develop more information on this and other requirements established by the new regulations, please contact us to schedule an appointment with one of our professionals specialized in the subject matter.