Legal alert no. 72
Regulation of Bank of Portugal No. 2/2018
On September 26, 2018, the Regulation No. 2/2018 of Bank of Portugal on the fight against money laundering and terrorism financing (“AML/CFT”) (hereinafter the "Regulation") was published in the national official journal, which has revised and systematized, in a single Regulation, several matters that were dispersed by different regulatory instruments. It also complies with the multiple mandates required by the diplomas being implemented by the Regulation.
Thus, the Regulation sets forth:
- the conditions of exercise, procedures, instruments, mechanisms, application formalities, reporting requirements and other aspects necessary to ensure compliance with the AML/CFT's preventive duties, in the context of the activity of financial entities, subject to the supervision of Bank of Portugal, under Law no. 83/2017 of 18.08 (AML/CFT measures );
- the means and mechanisms necessary for the compliance, by financial entities, with the duties provided in Law no. 97/2017, of 23.08 (implementation and enforcement of restrictive measures approved by the UN or the EU and their applicable sanctioning regime); and
- the measures that payment service providers must adopt to detect transfers of funds in which the information on the payer or the payee is missing or incomplete and the procedures they must take to manage transfers of funds which are not accompanied by the information required by Regulation (EU) 2015/847 of the European Parliament and of the Council, of 20.05.2015.
The Regulation has finally unified in a single report - the "Prevention of Money Laundering and Terrorism Financing Report" - the information hitherto transmitted to Bank of Portugal by two separate mandatory reports ("RPB" and "QAA").
The requirements for the admissibility of the use of video conferencing and the identification by qualified providers of trust services are also established, as alternative means or procedures for proving identification elements offering identical security levels.
As a transitional provision, it is determined that:
- the financial entities immediately execute or ensure the execution of the updating procedures, depending on the internally defined period, for each category of risk, according to article 40 of Law 83/2017 and article 34 of the Regulation;
- the 5-year retention periods, set forth in Bank of Portugal Regulation No. 5/2013, of 18.12, which are in progress at the date of entry into force of the Regulation, are increased to the new legal periods;
- by December 31st, 2018, financial institutions shall fully implement the information tools or systems (under Article 9/2 of this Regulation) and centralized registers (referred in Article 14 of the Regulation), and ensure that outsourcing agreements, concluded up to the date of entry of the Regulation, comply with the provisions of Article 38 of the Regulation; and
- the rules relating to 'agents and distributors', defined in Article 63º, numbers 5 to 7, shall only apply after the entry into force of the implementing measures of the Delegated Regulation of the European Commission, guaranteeing the financial entities, by that date, the operation of the central contact point under the terms of Regulation No. 5/2013 of Bank of Portugal.
This Regulation repeals the Regulations of Bank of Portugal No. 5/2013, of 18.12, 9/2012, of 29.05, and the Instructions No. 46/2012, of 17.12 and 9/2017, of 3.07.
Finally, the Regulation No. 2/2018 entered into force on November 27th 2018.
Access here the full version of Regulation of Bank of Portugal No. 2/2018.