The Council for Financial Activities Control (“COAF”) published the Resolution COAF No. 41, of August 9, 2022 (“Resolution COAF No. 41/2022”), which will only enter into force on September 1st, 2022.
The Resolution COAF No. 41/2022 provides for mechanisms to prevent money laundering and the financial of terrorism and the proliferation of weapons of mass destruction (“AML/FT”) for factoring companies.
Factoring is a financial transaction by which a company sells its credit rights, which would be paid in the long term, through bonds to a third party, who buys them in cash at a discount.
According to the Resolution COAF No. 41/2022, the factoring companies must implement AML/FT policies, containing at least the following guidelines:
I - Definition of roles and responsibilities in relation to the fulfillment of duties towards COAF;
II – Assessment of new products and services, as well as the use of new technologies, with regard to the risks of money laundering, financing of terrorism and the proliferation of weapon of mass destruction;
III – Internal risk assessment of money laundering, financing of terrorism and the proliferation of weapons of mass destruction;
IV – Promotion of AML/FT organizational culture, considering the employees and outsourced service providers in general, as well as business partners with relevant role in the performance of the activities of a company supervised by COAF;
V – Selection and hiring of employees, outsourced service providers and employees in general, as well as business partners with a relevant role in the performance of the activities of a company supervised by COAF;
VI – Continuous training of employees on the topic of AML/FT;
VII – Periodic assessment of compliance with policy, procedures and internal controls of AML/FT, as well as the identification and remediation of deficiencies found;
VIII – Business conflict of interest prevention;
In addition to the aforementioned guidelines, the AML/FT policy must also contain mechanisms for:
I – Carrying out due diligence for the identification and qualification of customers and others involved, including final beneficiaries;
II – Obtaining information about the purpose and nature of the business relationship;
III – Collection, verification, validation and updating of registration information, in order to know its customers, employees, business partners and outsourced service providers;
IV – Identification of politically exposed persons (PEPs) involved in transactions, including final beneficiaries;
V – Identification of individuals affected by determinations of unavailability of assets from the United Nations Security Council (UNSC) or its sanctions committees;
VI – Record keeping, regardless of how they may be formally designated;
VII – Monitoring, selection and analysis of unusual or suspicious operations (Suspicious Activity Report);
VIII – Suspicious Activity Report to COAF;
IX – Tone at the top to the effectiveness and adequacy of the AML/FT policy, procedure and internal controls.