The new IMPIC Regulation on prevention and combat of money laundering and terrorist financing in the real estate sector
On the 2nd of July of 2021, it was published in the Portuguese Official Gazette the Regulation No. 603/2021 of 8 June (hereinafter, "the Regulation"), which approved the Regulation of Institute of Public Markets, Real Estate and Construction, I. P. ("IMPIC, I. P.") on the rules that govern the prevention and combating money laundering and the financing of terrorism in the real estate sector, and which revoked Regulation No. 276/2019.
From the comparative analysis between the two diplomas referred to above, we highlight the following changes:
General identification and due diligence procedures:
- In order to comply with the duty of identification and due diligence established in Article 23 of Law no. 83/2017 of 18 August (hereinafter "the Law"), entities that carry out real estate activities as defined in sub-paragraphs (i) to (iv) of Article 2(b) of the Law must, in addition to the circumstances provided for beforehand, collect the identification elements concerning, among others, their clients, each of the parties involved in the real estate transaction and, if applicable, their respective representatives, namely when:
a) It is suspected that the transactions, regardless of their value and any exception or threshold, may be related to money laundering or terrorist financing;
b) There are doubts about the veracity or adequacy of the customer identification data previously obtained.
- On the other hand, the Regulation has extended the scope of the entities bound by the duty to appoint the Compliance Officer or "RCN". Until the approval of these regulation, this obligation was reserved exclusively to i) private limited companies or sole proprietorships, whose number of employees, under a labour or services contract, was greater than five and b) public limited companies.
Therefore, all entities that carry out real estate activities in national territory are now subject to this duty, regardless of their legal nature, and whose number of employees in the commercial or administrative areas is greater than five. These entities must designate, pursuant to Article 16 (1) of the Law, a member of their senior management or equivalent, provided that he/she has the necessary powers and competences to monitor compliance with the regulatory framework on the prevention and fight against ML/FT.
- This regulation has also clarified that, in matters of prevention and fight against ML/FT, the RCN shall be the privileged element of contact between the company and IMPIC, I. P., as well as the police and judicial authorities competent in this matter.
Duty of Training:
- The wording of paragraph 5 of Article 11 of these Regulations clarifies which entities are subject to the training duty set out in Article 55 of the Law, as well as, their internal departments to which training actions must be provided. Thus, the attendance and the format of the training programmes shall be carried out as follows:
a) Entities provided for in paragraphs 1 and 2 of Article 1 of the Regulation, which in the effective exercise of their functions in national territory, whatever their legal nature, with one to five employees, in administrative or commercial department: one training action every two calendar years
c) Entities foreseen in article 1, no. 2 of the Regulation, which in the effective exercise of their functions on national territory, whatever their legal nature, with six to ten employees, in the administrative or commercial department: one training action every calendar year;
a) Entities foreseen in paragraphs 1 and 2 of Article 1, which in the effective exercise of their functions in the national territory, whatever their legal nature, with more than ten employees, in the administrative or commercial departments, and ensure in a rotational manner that their employees receive adequate training in the prevention and combat of ML/FT: at least one training session should take place every civil year, with the presence of the NCR designated by the entity.
- In order to comply with the provisions of Article 21 of Law No. 83/2017 of 18 August and paragraphs 1 to 3 of Article 10, paragraph 2 of Article 13, paragraphs 2, 5 and 6 of Article 16 and paragraph 2 of Article 28 of Law No. No. 97/2017, real estate entities must adopt the necessary means and mechanisms to, as executing entities, ensure compliance with the duties provided for in the aforementioned Law No. 97/2017 regarding the enforcement of restrictive measures approved by the United Nations or the European Union.
-With regard to the mandatory communications to IMPIC on the transactions carried out by the real estate entity foreseen in article 14 of the Regulation if these are carried out by any other mandated individual person other than the obliged entity, the powers of attorney referred to in article 16(3) and (4) which must accompany this communication, will only have to be attached to the first communication to be carried out in each of the quarters referred to in article 20, producing effect only and during the course of these quarters.
Communication of real estate transaction and real estate rental contract information:
- Also of note is the revision of the deadlines for compliance with the obligation to communicate elements of real estate transactions and lease agreements whose value of the monthly rent is equal to or greater than €2500, set forth in sub-paragraphs b) and c) of number 1 of Article 14 of the Regulation. This communication, which until now had to be made every six months, shall now be made every four months. Thus, obliged entities must report to IMPIC through the relevant platform
a) Real estate transactions and lease contracts carried out in the first quarter of each year, by 30 June following;
b) Real estate transactions and lease agreements made in the second quarter of each year, until the following 30 September
c) Real estate transactions and lease agreements made in the third quarter of each year, until the following 31 December
d) Real estate transactions and lease agreements made in the fourth quarter of each year, until 31 March of the following year;
Regulation no. 603/2021, of 8 June came into force on the first working day following its publication in the Official Gazette.
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