On April 9, the Superintendence of Companies ("SS") issued the External Circular No. 100-000004 (the "Circular"). Through this Circular, the SS modified some sections of Chapter X of its Basic Legal Circular, which regulates the obligation to implement a SAGRILAFT for some companies.
Among other matters, the Circular modified the deadline that companies obliged to implement or update their SAGRILAFT in Colombia during 2021 had, extending the said term from 31 May to 31 August 2021.
You can review the Circular at this link (available in Spanish).
The main changes introduced by the Circular consist of:
- The clarification that when the obligated company is a branch of a foreign company, the board of directors, or if it does not have one, the highest corporate body of the parent company must make the appointment of the compliance officer. This corporate body will also be the recipient of the reports that the compliance officer must present annually.
- The inclusion of the obligation that, within the notification of the appointment of the compliance officer to the SS, the obligated company must attach the document that shows the registration of the compliance officer in the SIREL of the UIAF.
- The complementation of the 6-month experience requirement that the compliance officer must meet, accepting that such experience could involve the performance of similar positions or positions aimed at the administration and management of money laundering and terrorist financing ("MLTF") risks.
- Clarification that the incompatibility to act as a compliance officer for those who exercise internal audit or control functions is not extendable to those who support said work.
- The inclusion as a requirement for the compliance officer, being domiciled in Colombia.
- The inclusion as targets of the intensified due diligence of the final beneficiaries of the counterparties that may expose the obligated company to greater MLTF risks.
- Extended due diligence on PEPs (Politically Exposed Persons) to their spouses or life partners, relatives up to the second degree of consanguinity, affinity or first civil, and partners in a legal person in which the PEP holds, directly or indirectly, more than 5% or control.
- Modified the deadline that companies obliged to implement or update their SAGRILAFT in Colombia during 2021 had, extending the said term from 31 May to 31 August 2021..
Possible penalties for not implementing it.
In addition to the risks to which any company obliged is exposed by not having adequate prevention mechanisms to manage its risk of MLTF, by not complying with this regulatory obligation, doing it after the deadline, or incompletely, it can generate an administrative investigation of the SS against the company.
As a result of this investigation, the SS can impose fines of up to 200 legal monthly minimum wages in force (for 2021 they are equivalent to COP 181,705,200 COP ~ USD 50,000). This fine can be successive in case the obligated company remains reluctant to comply with its obligation to implement a SAGRILAFT.
Click here to read the alert in Spanish.