Q24N — The Daniel Ortega regime ordered the reform of the Law Against Money Laundering, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction (Law 977) and the Law of Financial Analysis Unit (Law 976), with which it will increase the control and surveillance of remittances that arrive in Nicaragua.
In the case of the Law on Money Laundering, in the statement of reasons, the regime indicates that with the new modification, a redistribution of supervision is made in which information will be requested from the originators and recipients of family remittances.
“Supervisors are required to establish standards for obtaining information on originators and beneficiaries of electronic transfers, remittances and virtual asset service providers,” the document states.
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In effect, with the new reform, the UAF will be able to obtain information on remittances, freeze funds and report suspicious senders to the police.
It adds that it clearly defines that Financial Groups must implement their risk prevention programs for the entire Group, including all their branches, subsidiaries, majority-owned affiliates and representative offices abroad.
“The reforms in general are intended to integrate changes in international standards, as well as to overcome gaps that could be improved, identified during the ongoing evaluation processes to which the country is subject by international regulatory bodies in the field,” they indicate.
On the other hand, in the amendment to the Financial Analysis Unit Law (Law 976), the changes ordered directly by Ortega will allow the UAF to profile remittance senders and beneficiaries within Nicaragua, freeze money expeditiously and report to the Police and the Prosecutor’s Office people who are classified as “investigated.”
In short, the UAF will be in charge of monitoring remittance agencies regarding the movements made by their users in the management of sending assets to Nicaragua, and they will be obliged not only to report their movements, but also those intermediary entities that participate in the process of sending money.
In addition, in the event that companies do not provide this type of information, the UAF may impose administrative and criminal sanctions against the managers and directors of remittance agencies, “especially those who fail to comply with the duties of identifying the client and the final beneficiary.”
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These changes are contained in article 12 “Prohibition of disclosing that suspicious transactions have been reported” of the Financial Analysis Unit Law (Law 976).
It establishes that “The above prohibitions will not prevent the disclosure of information or communications on suspicions of ML/FT/FP and preceding crimes associated with ML between directors, administrative managers, compliance officers and employees of the Obligated Subject and legal advisors, branches, subsidiaries and affiliates of the same financial group and competent authorities, whenever required within the exercise of their functions.”
To article 9, which refers to the “obligated subjects” to inform the UAF directly, the “virtual asset service providers (PSAV)” are added at the end of the first text and at the end of section “a” of point 3.
The “obligated subjects” must provide information about their clients to the UAF “without being able to claim reserve or secrecy of any kind.” With this, the State can order the immobilization “without delay” of the funds or assets of natural persons, legal persons or criminal organizations that have been designated.
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In article 32, two new points (8 and 9) are added in which virtual asset service providers (PSAV) registered in Nicaragua are prohibited from maintaining relations with similar businesses from other countries that are not duly registered and foreigners are required to “comply with the requirements demanded by their prudential regulator in Nicaragua.”
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