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DECEMBER No. 568

THE LEGISLATIVE ASSEMBLY OF THE REPUBLIC OF THE SALVADOR,

CONSIDERING:

I.- That by Legislative Decree No. 498, dated December 2, 1998, published in Official Gazette No. 240, Volume 341, of 23 of the same month and year, the Law against Money Laundering and Assets was issued.

II.- That the Act referred to in the previous consideration is intended to prevent, detect, punish and eradicate the crime of money-laundering and assets, as well as its cover-up, which shall be applicable to any natural or legal person even if the latter is not legally constituted.

III.- That in order to ensure that El Salvador's legal regulations are in conformity with the International Standards on the Fight against Money Laundering and Assets, the financing of terrorism, organized crime, drug trafficking and any of its variants.

IV.- Taking into account the recommendations of the International Financial Action Task Force (FATF), which seeks to contribute to the adequacy of international standards with relevant legislation in the fight against money laundering and the financing of terrorism.

V.- That for the above reasons, it becomes necessary to issue the relevant legal reforms.

TANTO,

Luis Antonio Almendá Rivas, Ernesto Antonio Angulo Milla, Benito Antonio Lara Fernández, Ramón Arístides Valencia Arana, Sigifredo Ochoa Pérez, Antonio Echeverría Veliz, Rodolfo Antonio Parker Soto, Mártir Arnoldo

DECRETA:

REFORMS TO THE LAW AGAINST THE LAW OF DINERE AND ACTIVES

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Art. 1.- Amend Art. 2, as follows:

"IMPLEMENTATION OF THE LAW

Art. 2.- This Law shall be applied to any natural, national or foreign person and any legal person legally registered under the Laws of the Republic of El Salvador or who are legally registered in other countries shall have such diplomatic relations or not with El Salvador; in addition, all organizations that carry out legal or formal activities in any commercial, financial, investment, development, political, sporting, social assistance or relief activity with national or foreign roots are subject to this Law, and any other proceeds that are unlawfully derived from their activities.

They are considered bound by this Law, especially the following:

(1) National banks and foreign banks, branches, agencies and subsidiaries thereof;

(2) Financial, Micro Financial, Credit Funds, Cooperative and Ownership Banks;

(3) Foreign Currency Exchange Houses;

4) Stock exchanges and stock exchanges;

(5) Bags of agricultural products and services;

(6) Importers or exporters of agricultural products and products and new and used vehicles;

(7) Insurance companies and intermediaries;

8) Emissive Societies of Credit Cards and Related Groups;

9) Institutions and natural persons that carry out systematic or substantial transfers of funds, including the Empeño Houses, Telefónica Operators and others that grant Loans;

10) Casinos and Game Houses;

11) Trade in Precious Metals and Stones;

(12) Real Estate Transactions;

13) Air, Land and Maritime Transport Travel and Business Agencies;

14) Shipping agencies and receipt of shipments and remittances;

15) Construction companies;

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16) Private Security Agencies and Importers and Marketing of Firearms, Ammunition, Explosives and Similar Articles;

(17) Hotel industry;

(18) Political parties;

19) Providers of Societal and Trust Services;

(20) Non-governmental organizations;

21) Sports associations;

22) National and international investors;

23) Drogueries, Pharmaceutical Laboratory and Pharmacy;

(24) Judges, Prosecutors and staff of the Administration of Justice;

25) Media Companies of any modality;

(26) Associations, Consortiums and Business Guilds; and

27) Any Private Institution or Mixed Economy, Association, Trade Society, Group or Financial Conglomerate.

Those who shall comply with the obligations set forth in this Law, and any other that so require. "

Art. 2.- Refer to Art. 4, as follows:

"THE OF DINERAL AND ACTIVES

Art. 4.- Any person who deposits, withdraws, converts or transfers related funds, property or rights directly or indirectly from criminal activities, to conceal or cover up his or her illicit origin, or to help circumvent the legal consequences of his or her actions to whom he or she has participated in the commission of such criminal activities, within or outside the country, shall be punished with imprisonment of five to fifteen years and a fine of fifty to two thousand five thousand dollars in force.

It will also be understood by money and assets laundering, any operation, transaction, action or omission aimed at concealing the illicit origin and legalizing property and values from criminal activities committed within or outside the country.

In the case of legal persons, sanctions will be applied to natural persons over the age of 18, who agreed or executed the act constituting money and assets laundering. "

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Art. 3.- Amend Art. 9, as follows:

"Art. 9.- Persons, institutions or any other person covered by Art. 2 of this Law, they are obliged to report in writing or any electronic means within the maximum period of five working days to the IUF, any cash operation or transaction and/or any other means, whether individual or multiple, carried out by each user or client that on the same day exceeds the Ten thousand dollars of the United States of America or its equivalent in any foreign currency, regardless of whether it is suspected or not. The time limit for submitting the information will be computed from the day after the operation or transaction.

Insurance companies, within the time limit set out in the preceding paragraph, should also inform the IUF of all payments made in compensation for the risks that will ensure in excess of the amount indicated in the preceding paragraph.

For the application of this rule, the rules of procedure to be issued shall be taken into account. "

Art. 4.-Interchange between Art. 9 and Art. 10, Art. 9-A and Art. 9-B, like this:

"Art. 9-A.- Reports of suspicious operations should be forwarded to the Financial Investigation Unit within a maximum period of five working days, counted from the time the institutions determine that there are sufficient evidence to consider them irregular or inconsistent or not related to the type of economic activity of the client.

The amount of transactions or transactions is irrelevant for the purposes of this article.

Subjects referred to in Article 9 of this Law shall also be obliged to report the attempted suspicious transactions. The UIF will issue the form to report this type of operations.

Notwithstanding the provisions of the Special Laws on the subject under Article 9 of this Law, they are obliged to submit a report of suspicious operation where there are reasonable grounds to consider that money or assets are related or could be used for terrorist acts or terrorist organizations, cr imen organized, drug trafficking and any of its variants. "

"Art. 9-B.- The institutions shall establish an internal policy for the identification of persons in all the financial operations carried out by them, especially those listed in Art. 2 of this Law."

Art. 5.- Refer to Art. 10, as follows:

"Art. 10.- In addition to the obligations set out in the preceding article, the institutions shall have the following:

(a) To identify faithfully and with the necessary diligence all users who require their services, as well as the identity of any other natural or legal person, on whose behalf they are acting;

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(b) To archive and retain the documentation of the operations for a period of five years, from the date of the completion of each operation. In the same time period, they must archive and conserve identification data, account files and business correspondence from their clients, from the termination of an account or business relationship. Information on the client and transactions shall be available when required by the competent authorities in due form;

(c) Train staff on processes or techniques of money-laundering and assets so that they can identify abnormal or suspicious situations;

(d) Establish internal audit mechanisms to verify compliance with the provisions of this Act; and

(e) Under the terms provided for in Art. 9-B of this Law, banks and financial institutions, exchange houses and stock exchanges, shall adopt policies, rules and mechanisms of conduct that will be observed by their administrators, officials and employees, consisting of:

(I) To properly know the economic activity that its customers develop, its magnitude, frequency, basic characteristics of transactions in which they are involved and, in particular, those of those who make any kind of deposit in sight, in time, savings accounts, deliver fiducia or fiducia goods; or those that deposit in safe deposit boxes;

II) To establish that the volume, value and movement of funds of your customers are related to the economic activity of them; and,

III) Report to the Office of the Attorney-General of the Republic, through the IUF, in accordance with Art. 9-A of this Law, any relevant information on the management of funds, whose amount or characteristics does not relate to the economic activity of its customers; or on transactions of its users that by the amounts involved, by their number, complexity, characteristics or special circumstances, are removed from the usual or conventional patterns of the transactions of the same genre; and that therefore it may reasonably be concluded that it could be used or intended to use the financial entity to transfer, manage money. "

Art. 6.- Refer to Art. 13, as follows:

"Art. 13.- The institutions must control the transactions made by their clients and users, which exceed the amounts established and the conditions specified in Article 9, paragraph 1 of this Law.

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In order to carry the indicated control, the institutions may automatically capture the relevant data in their systems to identify their customers and users, use the form designed by the Financial Investigation Unit for this purpose, provided that the following requirements are met:

(a) Identification of the person who physically performs the transaction, noting his or her full name, date of birth, nationality, domicile and residence, profession or office, family status, identity card submitted and signature;

(b) Identification of the person whose name the transaction is made, expressing the data indicated in the previous paragraph;

(c) Identification of the beneficiary or destinatory person of the transaction, if any, which shall contain similar information to that stated in subparagraph (a);

(d) Type of transaction in question;

(e) Code identifying the Institution where the transaction was made;

(f) Code of the official or employee of the institution dealing with the operation;

(g) The amount of the transaction; and

(h) The place, time and date of the transaction.

The institutions will submit this form to the IUF. "

Art. 7.- Refer to Art. 14, as follows:

"Art. 14.- The institutions must establish a Compliance Officer by an Officer appointed by the respective Board of Directors or the equivalent agency.

The Compliance Officer must meet the following requirements:

(a) Ratified certification by the Attorney General ' s Office on the prevention of money laundering and financing of terrorism, organized crime, drug trafficking and any of its variants and three years of experience in such branches;

(b) To hold a managerial position;

(c) Skills and knowledge on legal aspects, business and controls; and

(d) To have a university degree and knowledge about administrative and legal aspects, the turn of the business concerned.

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The members of the Compliance Officer shall enjoy independence, having the power to make decisions on their role. They cannot be dismissed, punished or removed from their posts for the fulfilment of their inherent powers.

The structure and operation of the Compliance Officer shall be regulated in accordance with the Regulations of this Law.

In the cases of Financial Conglomerates, in accordance with Article 133(c) of the Banking Act, a same Compliance Officer may perform this function in different companies of the same conglomerate, when determined by the Board of Directors according to the number of clients, number of employees and volume of operations of such companies. "

Art. 8.- Interchange between Art. 15 and Art. 16, Art. 15-A, like this:

"Art. 15-A.- All records and reports required by this Law must be kept and transmitted in paper or electronic form. "

Art. 9.- Refer to Art. 19, as follows:

"Art. 19.- Upon administrative order issued by the Office of the Attorney-General of the Republic, the National Civil Police may register any land, air or maritime vehicle entering the national territory or where it deems it appropriate for those travelling there, withholding it the minimum or necessary time to perform the diligence; as well as to proceed to register or search for suspicious persons and their luggage, handbags or any other receptacle in which it is possible to keep evidence related to the money. The inquiry will be carried out respecting the dignity and the ability of the person.

The National Civil Police may proceed without prior administrative order referred to in the preceding paragraph in the cases provided for in articles 196 and 197 of the Code of Criminal Procedure.

Any person who enters or exits the territory of the Republic by any means, irrespective of his or her nationality, shall declare whether he or she carries tickets, turns, cheques of his or her own or other persons, negotiable instruments to the carrier, in national or foreign currency or in securities, in the amount of ten thousand dollars of the United States of America or more, or the equivalent in foreign currency, according to the fluctuations of the national currency, if not so, shall be determined; "

Art. 10.- Refer to Art. 20, as follows:

"Art. 20.- It is the responsibility of the General Customs Directorate, to verify the veracity of the declarations referred to in Article 19 of this Law.

The falseness, omission or inaccuracy of the declaration will result in the retention of the values and, once established, the data subject will be notified, so that the following thirty working days will demonstrate the legality of the origin of the money and retained values.

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After the period, without the person concerned having been charged to justify in the terms of the preceding paragraph, the total amount of the retained value was entered into the General Fund of the Nation through the corresponding Collective of the Ministry of Finance.

The person responsible for falsehood, omission or inaccuracy shall incur a fine of five per cent of the total amount of the value of the retained, which shall give effect to the corresponding Collecting Office of the Ministry of Finance.

If the legality of the origin of the money and retained values is not proven, they will enter the General Fund of the Nation through the corresponding Collecting of the Ministry of Finance.

The resolutions issued by the Directorate-General for Customs shall be appealable. "

Art. 11.- Refer to Art. 21, as follows:

"Art. 21.- In any state of the procedure that the Directorate-General of Customs shall determine that the probable commission of a criminal act is carried out, shall transmit the proceedings carried out together with the values retained to the Office of the Attorney-General of the Republic, within eight hours of the decision to determine that circumstance, who shall take the procedure in coordination with the National Civil Police; the foregoing, without prejudice to those cases of arrest in flogging. "

Art. 12.-Interchange between Art. 23 and Art. 24, Art. 23-A, like this:

"Art. 23-A.- The Superintendence of the Financial System, in coordination with the Office of the Attorney-General of the Republic and other agencies linked to financial activities, shall conduct annual awareness campaigns for the prevention of the crime of money laundering and assets at the national level. "

Art. 13.- Intercálanse between Art. 26 and Art. 27, Art. 26-A and Art. 26-B, like this:

"Art. 26-A.- The institutions, their legal representatives and employees shall not be liable for any kind of responsibility, for sending to the Financial Investigation Unit the established reports or any information required by the Financial Investigation Unit, as well as for performing the acts in compliance with the provisions of this Law. "

"Art. 26-B.- The person who reveals, discloses or misuses the information, that the persons subject to the control of this Law are obliged to inform the IU of the Office of the Attorney-General of the Republic, shall be punished with imprisonment of three to six years.

Any person who destroys, disables, disappears, alters or impairs the information referred to in the preceding paragraph shall be punished by imprisonment of four to eight years.

The committal of the offences referred to in the preceding paragraphs by the official, employee or public and private authority shall be aggravated by up to one third of the

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as such, just cause for the dismissal of office, prior to the procedure established in the service regime applicable to it.

The application of the sanctions provided for in this Act shall be without prejudice to other criminal, civil or administrative responsibilities involving offenders. "

Art. 14.- This Decree shall enter into force eight days after its publication in the Official Gazette.

DADO en EL SALON AZUL DEL PALACIO LEGISLATIVE: San Salvador, at the five days of December of the year two thousand thirteen.

OTHON SIGFRIDO MORALES, PRESIDENT.

ENRIQUE ALBERTO LUIS VALDEZ SOTO, GUILLERMO ANTONIO GALLEGOS NAVARRETE, FIRST VICEPRESIDENT. SECOND VICEPRESIDENT.

JOSE FRANCISCO MERINO LOPEZ, FRANCISCO ROBERTO LORENZANA DURAN, TERCER VICEPRESIDENT. VICEPRESIDENT FOURTH.

CARLOS ARMANDO REYES RAMOS, QUINTO VICEPRESIDENT.

LORENA GUADALUPE PEÑA MENDOZA, MANUEL VICENTE MENJIVAR ESQUIVEL, FIRST SECRETARIAT. SECOND SECRETARY.

SANDRA MARLENE SALGADO GARCIA, JOSE RAFAEL MACHUCA ZELAYA, TERCERA SECRETARIA. SECRETARY FOURTH.

IRMA LOURDES PALACIOS VASQUEZ, ERNESTO ANGULO MILLA, QUINTA SECRETARIA. SECRETARY SIX.

FRANCISCO JOSE ZABLAH SAFIE, JOSE SERAFIN ORANTES RODRIGUEZ, SEPTIMO SECRETARIO. OCTAVO SECRETARY.

CASA PRESIDENCIAL: San Salvador, on the thirteenth day of January of the year two thousand fourteen.

PUBLIQUESE,

Carlos Mauricio Funes Cartagena, President of the Republic.

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José Ricardo Perdomo Aguilar, Juan Ramón Carlos Enrique Cáceres Chávez, Minister of Justice and Public Security. Minister of Finance.

D. O. No. 9 Volume No. 402 Date: January 16, 2014

JQ/adar 20-02-2014

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