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Money Laundering Legislation in Costa Rica
There is no specific guidance for lawyers. However, the National Notary Office issued Resolution No. 814-2007 of June 21st 2007 whereby it compels registration before the SUGEF of all public notaries that carry out any of the activities described in article 15 of Law No. 8204.
Under what circumstances is a lawyer under the obligation to report?
Article 15 of Law No. 8204 establishes that lawyers who perform, among other activities, the activities mentioned below, are required to report:
- Systematic or substantial operations of money exchange and transfers by means of instruments, such as checks, money orders, bills of exchange or similar.
- Systematic or substantial operations of issuance, sale, rescue or transfer of traveler’s checks or postal money orders.
- Substantial systematic transfer of funds performed by any other instrument.
- Administration of trusts or any type of administration of resources carried out by individuals or companies that are not financial intermediaries.
Individuals or companies that perform the activities indicated in the previous sections and that are not supervised by any of the existing superintendencies of the country, which is the case of attorneys at law and public notaries, must register in the SUGEF, which does not imply an authorization to operate; furthermore, said parties will be under the supervision of the superintendence (SUGEF) concerning all issues of legalization of capitals, established in the Law.
It is mandatory to report:
- Multiple operations that jointly exceed or add up to ten thousand dollars, legal currency of the United States of America or its equivalent in national or foreign currency;
- Cash operations, in national or foreign currency, equivalent to ten thousand dollars or more, United States currency, or its equivalent in other currencies;
- Other non-cash financial transactions that exceed the established limit that, in the opinion of the reporting agent, warrant reporting.
- Suspicious transactions, such as those performed beyond normal parameters, and those which, although not significant, are constant, without apparent legal or economic support.
- Financial institutions and other entities registered with SUGEF, confidentially and immediately must report transactions suspected of being illegal or related therewith, including money transfers from abroad or thereto.
Attorneys at law and public notaries may have a fine imposed upon them by the competent organ of supervision and review, prior warning, in the following instances:
a) A fine of zero point zero five percent (0.05%) of the value of the patrimony, if they:
- Fail to register, in the form indicated by the competent organ of supervision and review, any transaction in cash, in national or foreign currency, in excess of ten thousand US dollars (US$10,000.00) or its equivalent in colones. This applies as well to withdrawal transactions in foreign currency, if in cash and for an amount in excess of ten thousand US dollars (US$10,000.00).
- Handle multiple transactions in cash without recording these in the manner established.
- Do not comply with the terms established by the corresponding organ of supervision and examination for the presentation of forms.
- Do not comply with the rules of client identification in accordance with the terms established in article 16 of Law 8204.
- Refuse to provide to the entities approved by law, the necessary information and documents for suspicious operations, pursuant to article 17 of the law, or provide information to unauthorized persons in violation of article 18 of Law 8204.
b) A fine of zero point one percent (0.1%) of the value of their patrimony, if they:
- (The entities established in article 15 of said Law) refuse to register before the SUGEF (case of the lawyers).
- Have not implemented the procedures for detection, control or reporting of suspicious or unusual financial transactions in the terms established in articles 24 and 25 of Law No. 8204.
- Do not adopt, develop or execute internal programs, regulations, procedures and controls to prevent the crimes identified in the Law; do not appoint the employees responsible for ascertaining the fulfillment of such controls, programs and procedures.
c) Additionally, lawyers may be penalized with imprisonment if they commit or participate in any crime of legalization of capitals.
Client identification and verification
All attorneys and public notaries that practice or specialise in the activities described in article 15 of Law No. 8204 are required to identify their clients and maintain records with this information. The law establishes the following:
Article 16.- “ In order to prevent operations of concealment and mobilization of capitals of doubtful origin and other transactions leading to the legitimization of capitals of criminal origin, institutions submitted to the regulations of this chapter are subject to the following rules:
- Obtaining and keeping information regarding the true identity of the persons in whose benefit an account is opened or a transaction is performed, when there are doubts of whether such client is acting on his behalf or not, specially in case of companies that do not perform commercial, financial or industrial operations in their country of domicile or headquarters.
- Maintaining nominative accounts; anonymous and coded accounts and accounts under fictitious or inexact names are prohibited.
- Recording and verifying, by authentic means, the identity, representation, domicile, legal capacity, occupation or social object of the persons, as well as other data concerning their identity, whether they are occasional or regular clients. Said verification is by means of identity documents, passports, birth certificates, driving licenses, social agreements and statutes, or by means of any other official or private document; it will be carried out at the establishment of commercial relations, particularly the opening of new accounts, and when obtaining deposit books, leasing security boxes, executing cash transactions for sums greater than ten thousand US dollars (US $10,000.00) or the equivalent in other foreign currencies, and in trustee transactions.
- Maintaining, during the effective period of an operation and for at least five years as of the date of the transaction, records of the information and documents required by this article.
- Keeping, for a minimum period of five years, the identity records of the clients, the account files, the commercial correspondence and the financial operations that would permit the reconstruction or identification of the transaction.”
Andrea Hulbert is the Founding Partner and Director of the Law Firm Hulbert Volio Montero and practices as a legal adviser, litigator, arbitrator, as well as legal writer.
Mss. Hulbert is an accomplished dispute resolution attorney; a LITIGATOR AND ARBITRATOR with vast experience in the resolution of legal conflicts and out-of-court settlements. Mss. Hulbert has more than twenty years of practice in the law field and more than ten years in arbitration, having great achievements as party representative and as arbitrator in the most important arbitration centers in Costa Rica. She is well experienced in complex cases in civil and commercial law, responsibility and damages.