Financial Information Unit Amends Regulations on Politically Exposed Persons

On February 28, 2022, the Financial Information Unit (UIF) issued Resolution No. 35/2023, amending the regulatory framework on politically exposed persons (PEP) applicable to the reporting subject (SO) listed in article 20 of the Law No. 25246, to comply with Recommendations 12 and 22 and with the Guide on PEP of the Financial Action Task Force (FATF).

The main changes the resolution introduces include:

• More details for identifying PEP on the basis of family ties or closeness, limiting them to life partners and to those having legal business relationships of an associative type –even if informal– with a PEP.
• Establishment of a twoyear period during which the PEP status will be kept, starting from the moment the position or function that granted such status ceases. Afterwards,  a risk level assessment will be carried out to determine if this category will be kept. The assessment will  take into account, among other factors, the relevance of the position occupied. In this sense,  those whose PEP status arises from family ties or closeness will keep their statuses for the same period of time as the person with whom they have or have had the relationship.
• SO’s obligation  of carrying out enhanced due diligence actions when dealing with foreign PEP.
• Incorporation of the duty to report the PEP status of beneficial owners.
• Obligation to file the PEP status affidavit both at the beginning of the business relationship and when such status is modified (when beginning or ceasing).
• Finally, the obligation to obtain the Compliance Officer’s approval to establish commercial relations or maintain them with this type of clients and their beneficial owners. This applies only to foreign PEP and to local PEP classified as ‘high risk’.

The resolution will be in force as of April 1, 2023. Resolution UIF No. 134/18 will therefore be repealed.