Financial Analysis Unit Issues A New Mandatory General Instruction As To Ultimate Beneficiary And Mandatory Know Your Costumers' Due Diligence - Finance and Banking - Chile Law Articles in English - Mondaq Business Briefing - Books and Journals - VLEX 688928101

Financial Analysis Unit Issues A New Mandatory General Instruction As To Ultimate Beneficiary And Mandatory Know Your Costumers' Due Diligence

Author:Mr Marcos Ríos, Álvaro Carreño, Nicolás Allamand and Maximiliano Portales
Profession:Carey
 
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On June 12, 2017, the Chilean Financial Analysis Unit ("UAF") issued the General Instruction No. 57  (the "General Instruction") imposing on Reporting Entities (including but not limited to banks and financial institutions, representative offices of foreign banks, private investment fund managers, brokerage firms, securities brokers, insurance companies) additional AML/CTF Know Your Customer controls ("KYC controls"). Reporting Entities now must identify, independently verify and record supporting evidence as to their clients' (legal entities) ultimate beneficial ownership.

Clients who (a) are legal entities; and (b) have a permanent relationship with the Reporting Entity; shall disclose and provide the latter with a list and supporting information about their Beneficial Owner(s) understood as any of the following two scenarios:

Any individual(s) who owns, directly or indirectly, through partnerships or other mechanisms, a stake equal to or greater than 10% of the capital or voting rights of a legal entity; Any individual(s) who, without prejudice to directly or indirectly holding less than 10% of the capital or voting rights of a legal entity, through partnerships or other mechanisms, exercises effective decision-making faculties. In the case of foreign legal entity clients who are permanent clients, Reporting Entities shall require the identity and domicile of individuals holding the highest managerial position abroad and its legal representatives domiciled in Chile, who shall deliver all the information about the Beneficial Owner(s) (listed in points (i) and (ii) above) within a period of no more than 45 business days.

Reasonable measures should be undertaken by the Reporting Entity to independently verify the veracity of the information disclosed by the client.

Although the General Instruction indicates that it will become enforceable 90 days after its publication in the Chilean Official Gazette, this is September 11, 2017, administrative instructions of the UAF have instructed otherwise by imposing the following schedule:

Existing permanent customers until June 12, 2017: Information on beneficial ownership shall be collected, recorded and be available by October 1, 2018; and Permanent customers who enter after June 12, 2017: Such information must be collected before or at the time of establishing the commercial relationship. For transactions...

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