Venezuela: The National Office against Organized Crime and Financing of Terrorism creates a registry for entities that carry out activities that could be used for money laundering

In brief

On 22 February 2021, the National Office against Organized Crime and Financing of Terrorism (ONDOFT) created the Unified Registry of Obligated Subjects before the ONDOFT ("Registry"), which obligates individuals and entities to register if the activities they carry out could be used for money laundering and financing of terrorism (“Rules”).1

Through the Rules, the ONDOFT established the requirements and procedures for the Registry.  The Rules entered into force on 30 March 2021.

Non-compliance with the Rules will result in administrative sanctions, such as fines.2


Contents

In more detail

The Rules’ most relevant aspects are as follows:

  1. Who must register? 

    1. Obligated subjects under the Organic Law Against Organized Crime and Financing of Terrorism, according to their activity (banking sector, securities, insurance, bingos and casinos, nonprofit organizations, political organizations, among others)3
    2. Subjects whose activity is not regulated by a special law and who are not under any entity of prevention, control, supervision and vigilance4
    3. Those that carry out activities that may be used to commit money laundering crimes, financing of terrorism and proliferation of weapons of mass destruction
    4. Those that intervene in the integral system of risk administration and corporate compliance
  1. Registry requirements

The obligated subjects according to item (1) must present the following documents in Spanish:5

  1. General requirements

    1. Identification documents, as applicable, of business owners, legal representatives, and members of the board of directors or administration council
    2. Tax Information Registry (RIF)
    3. Certificate that evidences the registration before the National Registry of Contractors before the National Contracting Service, when applicable
    4. Annual financial statements of the last fiscal year audited or certified by a collegiate public accountant
    5. Licenses or authorizations, or valid equivalent documents, issued by the control entity that supervises the obligated subject, when applicable
    6. Affidavit of the obligated subject that certifies that the information provided is correct
    7. Designation proposal of the compliance officer, when applicable
    8. If an entity different from the ONDOFT regulates the obliged subject, they must also add: (i) authorization letter issued by such entity; (ii) valid identity documents; (iii) CV that includes phone numbers and email addresses; and (iv) proposals of policy manuals for administration of corruption risks.
  2. Additional requirements for commercial entities.

    1. For commercial entities incorporated in Venezuela:
      1. Articles of Incorporation / Bylaws and its amendments, all registered before the Commercial Registry
      2. Power of attorney that authorizes the individual designated by the obligated subject to act in their name (duly notarized); or appointment of a commercial agent registered before the Commercial Registry
      3. Shareholders' Meeting minutes that evidence the appointment of the current board of directors
      4. Descriptive memory of their trajectory and experience in the corresponding sector
      5. Stockholding structure, identifying name, type and identification document of the partners or shareholders, percentage or participation and types of shares or participation quotas
      6. If a shareholder or partner is a legal entity, they must also provide their stockholding structure according to the previous item. In turn, they must provide the stockholding structure of each commercial entity involved through shares or quotas up to the ultimate beneficial ownership.
      7. Certification issued by the board of directors stating that the information provided in points (E) and (F) are consistent with the information included in the stockholders registry book
    2. For commercial entities incorporated abroad:
      1. Incorporation document issued by the corresponding foreign commercial registry
      2. Certificate issued by the Commercial Registry Office in Venezuela6
    3. For commercial entities that are members of a group controlled by a parent company:
      1. Official document that provides the tax information number of the parent company, be it local or foreign
      2. Notarized statement that provides the company names of the entities under the parent company and the types of existing relationships between them, their boards of directors and principal executives
      3. Public instrument that justifies the legal representation of the members of the group under the parent company
  3. Additional requirements for nonprofit organizations

    1. Articles of Incorporation / Bylaws registered before the Public Registry and their amendments, if applicable
    2. Proof of registry before the control entity to where it belongs, according to their nature
    3. Shareholders' Meeting minutes that evidence the appointment of the current board of directors
    4. List of organizations or entities, national or foreign, that provide contributions or donations to the nonprofit organization, issued by the board of directors
    5. Identification of the beneficiaries of the nonprofit organization, issued by the board of directors
    6. List of foreign branch offices of international nonprofit organizations and other nonprofit organizations they have associated with, issued by the board of directors
  4. Requirements for compliance officers

    1. Proof of registry before the control entity that supervises the compliance officer due to the nature of the activity that they carry out
    2. Proof of registry before the registry of compliance officers that the governing body has in matters of organized crime and financing of terrorism
    3. CV that credits academic formation as an expert in matters of administration of corruption risk within the sector where they work in
  1. Registration procedure

    1. Start of the registration. Obligated subjects must request their registration before the ONDOFT within the 30 continuous days after starting their operations, and they must designate an individual to carry out the registration process. 
      1. Such individual must appear before the ONDOFT’s offices or request through electronic means the corresponding credentials for the registration process.
      2. They must complete the required information profiles and attach the required documents stated in item (2) within a term of 30 to 90 continuous days after starting the registration process.
    2. Evaluation of requirements. The ONDOFT will review the requirements within 30 continuous days, starting from the reception date of the last requirement filed.
      1. The ONDOFT may also visit the obligated subject to verify the information provided.
      2. If the information has inconsistencies or is incomplete, the ONDOFT must notify the obligated subject so that they can correct the inconsistencies within five working days after the notification.
    3. Results of the registration process. After the term stated in the previous section elapses, the ONDOFT will notify the obligated subject of the result. If the registration is satisfactory, the ONDOFT will undertake the following:
      1. Generate the corresponding credentials for the legal representative and the compliance officer to comply with their functions.
      2. Issue the registration certificate to the obligated subject. The certificate will be electronic and will contain the corresponding security elements to ensure its authenticity before interested third parties.
  2. Registration update

    1. Term for obligated subjects. Obligated subjects must notify the ONDOFT of any update regarding the information provided upon registration within the 30 continuous days after those changes occur.
    2. Term for subjects regulated by special laws. Obligated subjects under special laws must notify the ONDOFT about the substitution of their compliance officer within 15 days after its approval and authorization by their control entity.
    3. Review and validation. After receiving the information, the ONDOFT will review the requirements within the following 30 continuous days.
      1. If the review is satisfactory, the ONDOFT will make the corresponding changes.
      2. If the documents have inconsistencies, the ONDOFT must notify the obligated subject, who must correct such inconsistencies within five working days after the notification.
    4. Financial statements
      1. From 1 April to 15 April of each year, subjects must, through electronic means,  deliver to the ONDOFT their audited or certified financial statements corresponding to the last financial year.
      2. If the obligated subjects have a fiscal closing date different from the calendar year, they must forward their financial statements within the first 15 days of the month following the one when they make their definitive income tax return.
  3. Registration annulment

    1. Causes for annulment. Obligated subjects may request the annulment of their registration, through electronic means, in the following cases:
      1. The obligated subject is an individual who died and their economic activity was discontinued.
      2. The obligated subject is a legal entity that dissolved or liquidated because of sanctions imposed by competent courts.7\
      3. The obligated subject changed their economic activity for another one not regulated by a law related to the prevention of money laundering, financing of terrorism and proliferation of weapons of mass destruction.\
      4. Two or more obligated subjects merged, extinguishing the legal personality of the subject requesting the annulment.
      5. Two or more obligated subjects merged, extinguishing their legal personalities and prompting the creation of a new legal entity.
      6. Any other circumstance that derives from the law or other legal dispositions applicable to the matter.
    2. Requirements for the annulment. Obligated subjects must address their request through electronic means, explaining the motives to justify the annulment. They must also attach the following documents, as applicable:
      1. Death certificate
      2. Certificate issued by the corresponding municipality, manifesting the closing of the legal entity or the ceasing of the particular economic activity that qualifies them as an obligated subject
      3. Registered Shareholders' Meeting minutes that resolves upon the merger between two or more legal entities
      4. Administrative order issued by a control entity when applicable
      5. Affidavit certifying that the information and documents provided are true, correct and verifiable
    3. Verification. The ONDOFT will review the information and documentation within 30 continuous days after receiving the final requirements.
      1. If the documents contain inconsistencies, the ONDOFT must notify the obligated subject so that they can correct the inconsistencies within 15 working days after the notification.
      2. In the request is duly substantiated, the ONDOFT will revoke the registration and notify the obligated subject of the decision through an official notice.
  4. Transitory disposition

Control entities must deliver to the ONDOFT the information regarding their registered subjects or in the process of registration within a term of 30 continuous days after the Rules’ entry into force (i.e., until 29 April 2021).


1 Administrative Rules No. ONCDOFT-001-2021 of February 22, 2021, issued by the National Office Against Organized Crime and Financing of Terrorism (Official Gazette No. 42,098 of March 30, 2021). here

2 Organic Law Against Organized Crime and Financing of Terrorism (Official Gazette No. 39,912 of April 30, 2012). Article 10: “Obligated subjects will conserve in a physical and digital format during a minimum period of five years, the documents and registries that prove the carrying out of operations and business with clients or users, as well as the documents required for their identification at the moment of establishing business relations with the obligated subject. The indicated term will be counted:

1.- For documents relative to the identification of clients and users (copies or registries of identity documents, such as passports, identity cards, drivers’ licenses or similar documents) starting from the day the relation ends.
2.- For those documents that prove an operation, starting from the day of its execution.
3.- For reports of suspicious activities, starting from its referral.
4.- For commercial correspondence, after concluding a commercial relationship. Non-compliance with this norm will by sanctioned by the control organ or entity of the obligated subject with a fine equivalent to between Three Hundred Tax Units (300 U.T.) and Five Hundred Tax Units (500 U.T.).

3 Organic Law Against Organized Crime and Financing of Terrorism (Official Gazette No. 39,912 of April 30, 2012). Article 9: “The following are considered obligated subjects according to this Law:
1.- Persons and entities, whose activities are regulated by the banking sector law.
2.- Persons and entities, whose activities are regulated by the insurance sector law.
3.- Persons and entities, whose activities is regulated by the securities sector law.
4.- Persons and entities, whose activities is regulated by the bingos and casinos law..
5.- Hotels, companies and tourism centers authorized to carry out currency exchange operations.
6.- Foundations, civil associations and other nonprofit organizations.
7.- Political organizations, elector groups, civil organizations and organizations of people that run for public office.
8.- Public registry offices and public notaries.
9.-Lawyers, administrators, economists and accountants in the free exercise of their profession, when they carry out transactions for clients in the following:
a.- Sale of real estate properties;
b.- Administration of money, securities and other client assets;
c.- Administration of bank accounts, savings or securities;
d.- Organization of funds for the creation, operation or administration of companies;
e.- Creation, operation or administration of entities or structures and sale of commercial entities.
10.- Persons and entities, whose economic activity is:,
a.- Sale of real estate;
b.- Building construction (malls, apartments, offices, among others);
c.- Commerce of jewelry;
d.- Commerce of art or archaeological objects;
e.- Marine merchandise;
f.- Lease and custody services for security cages, securities transportation and the transfer of funds;
g.- Assessment services in matters of investments, placements and other financial matters to clients, whatever their residence or nationality;
h.- Companies that sell ships, planes and automobiles;
i.- Establishments that sell car replacements and used vehicles;
j.- Establishments that sell and provide services regarding new and used cell phones. The category of obligated subject can be extended through law or decree, to other actors whose ends are established in the obligations that are pertinent to their economic activity and the law or decree will determine their corresponding control organ or entity.

4 Organic Law Against Organized Crime and Financing of Terrorism (Official Gazette No. 39,912 of April 30, 2012). Article 7: “The following are control, prevention, supervision and vigilance organs or entities:
1.- The Superintendence for Banking Sector Institutions.
2.- The Superintendence for Insurance Activity.
3.- The Central Bank of Venezuela.
4.- The National Superintendence of Securities.
5.- The Ministry of the public power with competence in matters of interior relations and justice, through its competent organs.
6.- The National Integrated System for Customs and Tax Administration (SENIAT).
7.- The Autonomous Service for Registries and Notaries.
8,- The Ministry of the Public Power with competence in oil and mining, through its competent organs.
9.- The Ministry of the Public Power with competence in matters of electric energy.
10.- The Ministry of the Public Power with competence in matters of planning and finance, through its competent organs.
11.-The National Commission of Casinos, Bingo Salons and Slot Machines.
12.- The Ministry of the Public Power with competence in matters of tourism.
13.- The Ministry of the Public Power with competence in matters of science and technology.
14.- The Ministry of the Public Power with competence in matters of industries.
15.- The Ministry of the Public Power with competence in matters of commerce.
16.- The National Electoral Commission. 17.- Any other designated through law or decree.”

5 If the documents were issued in a foreign country, they must be apostilled or legalized. If they were written in a foreign language, they must be translated into Spanish by a public interpreter.

6 The Rules are not clear in relation to which certificate this item refers to, taking into account that it refers to commercial companies incorporated abroad. It is possible that it refers to branches, although section b. (Iii) already seems to refer to foreign branches registered in Venezuela.

7 Although the Rules do not directly mention it, we assume that the annulment applies to any case of dissolution and/or liquidation of a legal entity.

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