Main modifications to the Money Laundering Law

By Belén González and Iván Sarantes of the Legal & Notarial Department of RSM UY.

On March 11 of this year, the Senate approved reforms to Law No. 19,574 on Money Laundering, introducing significant modifications to the existing system with the aim of broadening its scope and strengthening control mechanisms, adapting to recent changes.

Among the most relevant changes are the following:

Reduction of the threshold for the use of cash.

The regulations governing the use of cash in payments or transfers of money related to any transaction or legal business are modified, establishing a maximum limit equivalent to 200,000 UI (approximately USD 31,000) or 5% of the total transaction amount, with an absolute cap of 450,000 UI (approximately USD 70,000).

Before this modification, the regulations stipulated a limit of 1,000,000 UI (approximately USD 156,000), so the new regulations represent a significant reduction in the permitted threshold and, consequently, a substantial change to the existing system.

Freezing of Funds

The maximum period for freezing funds ordered by the UIAF (Financial Information and Analysis Unit) is extended from 72 hours to five business days in cases where an order is issued to prevent transactions involving funds suspected of being linked to money laundering or predicate offenses. It is also clarified that this measure is distinct from the preventive freezing of funds linked to terrorism or its financing, which must be applied directly by the obligated entity, without the need for prior instruction from the UIAF.

New Obligated Entities

New obligated entities are being added, including:

• Providers of administrative, accounting, and data processing services (back-office services) for individuals or legal entities that professionally and regularly conduct financial activities abroad, and which are not currently supervised by the Central Bank of Uruguay (BCU).
• Trustee providers of non-financial services, to the extent that they are not under the supervision of the BCU.
• Trade unions and business organizations.

Expansion of the Sanctions Regime

The scope of the sanctions regime is extended, stipulating that, in addition to obligated parties, members of the board of directors and senior management of these entities may also be subject to sanctions.

Expansion of Activities Covered by Real Estate Transactions

The scope of covered activities is expanded to expressly include barter, payment in kind, and transactions carried out wholly or partially using virtual assets.

In these cases, lawyers, accountants, and notaries involved in such transactions are designated as obligated parties.

Repeal of the Simple Presumption of Low Risk Due to Bank Transactions

The simple presumption of low risk, which allowed for the application of Simplified Due Diligence measures in cases of bank transactions, has been eliminated. This presumption was incorporated by the Law of Urgent Consideration (LUC).

Consequently, the mere fact of a transaction being conducted through a bank no longer affects the risk assessment of the transaction, which must now be carried out considering the factors established in current regulations.

This amendment aligns local regulations with the FATF standards on due diligence, which establish that the use of banking instruments does not, in itself, determine that a transaction is low risk.

Scope of Due Diligence

The obligation to apply due diligence measures is expressly established not only to the client, but also to their shareholders, partners, investors, or contributors of funds, regardless of the capacity in which they participate.

While this scope may be considered implicit in current regulations, its explicit recognition strengthens its application in practice and reduces the scope for divergent interpretations.

Declaration of Transport of Cash and Other Valuables

The obligation to declare the transport of cash, precious metals, or other monetary instruments exceeding USD 10,000 is expanded to include circulation within the primary zone and the special customs surveillance zone.

The sanctions regime is also adjusted, specifying the basis for calculating fines, incorporating the Customs registry of offenders, and regulating the detention and seizure procedure, as well as the automatic confiscation of goods after six months from the date of seizure.

Modification of Predicate Offenses and Incorporation of a New Offense

The thresholds for establishing predicate offenses are reduced (fraud: 400,000 UI; smuggling, swindling, and misappropriation: 100,000 UI), while the threshold for customs fraud is raised to 400,000 UI. The list of offenses is also expanded to include environmental crimes related to toxic waste and fraud in financial institutions, and the term “computer fraud” is replaced with “cybercrimes,” with a threshold of 100,000 UI (Indexed Units).

Additionally, the crime of Aiding and Abetting Money Laundering is defined, allowing for a clearer distinction between collaboration in predicate offenses and aiding and abetting money laundering itself.

In short, the modifications introduced reinforce the preventive approach of the anti-money laundering system, broadening its scope and adapting it to new economic and technological realities.

In this context, proper implementation not only helps avoid potential penalties but also strengthens transparency and security in operations, aspects that are increasingly valued both locally and internationally.

In this scenario, having access to expert advice is key to correctly interpreting the new obligations and ensuring their proper implementation.