Norm Reforming Articles 8, 10, 11, 12, 13, 14, 15, 16, 21, 26 and 28 of the Standard for the Management of Prevention of Money Laundering, Goods or Assets; and Terrorism Financing Risks

Resolution No. CD-SIBOIF-721-1-MAR26-2012
Date: March 26, 2012

STANDARD REFORMING ARTICLES 8, 10, 11, 12, 13, 14, 15, 16, 21, 26 AND 28 OF THE STANDARD FOR THE MANAGEMENT OF PREVENTION OF THE RISKS OF MONEY LAUNDERING, GOODS OR ASSETS; AND TERRORISM FINANCING

The Board of Directors of the Superintendence of Banks and Other Financial Institutions, after deliberations on the matter,

CONSIDERING

SOLE PROVISION

That it is necessary to reform the Standard for the Management of Prevention of the Risks of Money Laundering, Goods or Assets; and Terrorism Financing, based on experiences in the supervised sectors.

THEREFORE

In accordance with the above and based on and in exercise of the authority granted by Articles 3, numeral 13), and 10, numeral 5), of Law No. 316: “Law of the Superintendence of Banks and Other Financial Institutions”, and its reforms; and Article 36, second paragraph, of Law No. 285: “Law on Narcotics, Psychotropics and Other Controlled Substances; Money Laundering and Assets Proceeding from Illicit Activities”.

In exercise of its powers,

RESOLVES

To issue the following:

Resolution No. CD-SIBOIF-721-1-MAR26-2012
STANDARD REFORMING ARTICLES 8, 10, 11, 12, 13, 14, 15, 16, 21, 26 AND 28 OF THE STANDARD FOR THE MANAGEMENT OF PREVENTION OF THE RISKS OF MONEY LAUNDERING, GOODS OR ASSETS; AND TERRORISM FINANCING

First: Amend subsection e) of Article 8 of the Standard for the Management of Prevention of the Risks of Money Laundering, Goods or Assets; and Terrorism Financing contained in Resolution CD-SIBOIF-524-1-MAR5-2008, dated March 5, 2008 and published in the Official Gazette, La Gaceta, editions numbers: 63, 64, 65, 66 and 67 corresponding to days 4, 7, 8, 9 and 10 of April 2008 and its reforms (hereinafter, AML/CFT Standard), which shall read as follows:

“e) The Supervised Entity must not initiate, establish, accept, maintain, execute or develop:

i.- Anonymous accounts and/or business relationships, or those under fictitious, inaccurate, coded, fantasy or encoded names; or that in any way are not in the name of the client-holder of the same. Every account or business relationship must be in the name of a client identified and identifiable in an unequivocal manner, whether a natural person or a legal entity. When it comes to temporary associations or partnerships recognized by law but without granting them legal personality, or when it comes to clearly specified projects financed by specialized funds or organizations recognized for these purposes, the accounts and/or business relationships may be named after said association or with references to said project, but additionally must be accompanied by the name of the natural or legal person who is their main link and/or manager and/or executor and/or responsible party, which latter, for all effects, is the person considered the client of the Supervised Entity.

ii.- Accounts of a person (natural or legal) used to serve as a nest or bridge with the purpose of depositing, handling or facilitating the transfer of funds from businesses and/or income belonging to another person (natural or legal), whether or not of the account holder, and with which the supervised entity has no contractual relationship or reasonable justification for the operation.

iii.- Any commercial relationship or transaction with high-risk clients who, even applying what is provided in Article 6, subsection “l” and Article 11, subsection “g” of this Standard; do not present the complete information required to obtain full certainty about their identity, the purpose of said relationship and the specific justification of the origin of the funds or assets handled or to be used.”

Second: Amend the first paragraph of Article 10 of the AML/CFT Standard, which shall read as follows:

“The Supervised Entity, when initiating a business relationship with a client and without prejudice to other Standards of the Superintendence and Internal Regulations and Policies of each Entity, in the application of the CDD policy in the matter of AML/CFT must require the following documents, as appropriate in each case; these documents must be valid at the time of account opening or initiation of the relationship, as established by the laws on the matter:”

Third: Amend subsection a) of Article 10 of the AML/CFT Standard, which shall read as follows:

“a) Legal, official, valid, reliable and undeniable Identification Document for natural persons, in accordance with the laws on the matter:

i.- Identity Card for Nicaraguans residing in the country. ii.- Identity Card or Residency Card and/or Passport for Nicaraguans not residing in the country. iii.- Residency Card for foreigners residing in the country. iv.- Passport with valid entry stamp for non-resident foreigners. In the case of non-resident foreigners who have not entered the country, it will not be necessary to require the entry stamp. v.- Passport or Identity Card for non-resident foreigners from a CA-4 member country. vi.- Card or official document issued by the competent national authority, for foreign members of representations or organizations with diplomatic rank; and/or the Passport issued by their respective country.”

Fourth: Amend subsection i) of Article 10 of the AML/CFT Standard, which shall read as follows:

“i.- RUC Card (Unique Taxpayer Registry) for legal entities or equivalent document from the corresponding country for legal entities not domiciled in Nicaragua, in accordance with the law and regulations on the matter.”

Fifth: Amend subsection l) of Article 10 of the AML/CFT Standard, which shall read as follows:

“l.- Personal, banking or commercial references in favor of the client, as appropriate. The number of references and the manner of obtaining them will be defined in the internal policies of each Supervised Entity according to the level of CDD applicable. The following exceptions or differentiated treatment regarding this requirement are established:

i.- For accounts in the name of government entities, it will not be necessary to require references. ii.- When it comes to deposit accounts for payment and withdrawal of the client's salaries or wages, only the reference of the employer who in turn is a client of the supervised entity with an account for payroll or salary will be required. iii.- If the contractual relationship is limited to loan operations, it will be sufficient for the Supervised Entity to require the client's references through loan application forms, which must be verified by acceptable means, such as telephone, fax, email, mandatory consultation to the Risk Central of the Superintendence, and Private Risk or Credit Information Centers when the latter have established this in their policies, and additionally, leave written evidence of the manner in which such verification was executed. This exception also applies to the case of loans where the client must open a deposit account for the exclusive purpose of crediting the disbursement thereof, making deposits for payment and/or depositing funds resulting from their economic activity according to the declared Profile.”

Sixth: Amend subsection i) of Article 11 of the AML/CFT Standard, which shall read as follows:

“i) Verify, within the legal framework and according to the AML/CFT risk level, the origin of the funds, assets or merchandise deposited by the client, or that intervene in the transaction, in the following cases:

i.a.- At the initiation of the contractual relationship. i.b.- When during the course of the relationship alerts, changes, variations, inconsistencies or disproportionate or atypical or significant increases occur in the client's behavior or in their accounts or transactions with respect to the information on their economic activity, income or expected monthly activity declared by the client. i.c.- In significant transactions with occasional clients with whom there is no contractual relationship. i.d.- Whenever it concerns clients classified as high risk. i.e.- When it concerns clients from whom entities have received information requests from competent authorities.”

Seventh: Amend subsection a) of Article 12 of the AML/CFT Standard, which shall read as follows:

“a) Data on the client - natural person:

i.- Names and surnames according to official, valid and undeniable identification document; number, date of issue, date of expiration and issuing country of the identity document; sex, marital status, date of birth, country of birth, nationality. ii.- Name by which, socially and/or publicly, they are known. iii.- Home or mobile address and phone, contact phone, personal email address, profession and current occupation, as applicable. Name and address of their workplace, job title and monthly salary, as applicable. Income range in which they qualify. iv.- REPEALED. v.- Data on records and/or licenses and/or permits, or equivalent documents, as applicable by the client's activity; including entity that issued it, date of issue and expiration. vi.- Account numbers and/or business contractual relationships maintained between the client and the Entity, including types, dates of linkages, currency, initial deposit, and payment methods as applicable. vii.- Annual income and/or approximate sales volume obtained or generated by the client. viii.- The origin of the funds and assets to be handled, purpose and nature of the relationship. ix.- Volume of normal and/or expected monthly activity and/or transactions of the client in each of their accounts and/or contractual relationships with the Entity, including number of transactions, amounts in debits, credits, transfers and average balances, among other criteria, that allow their monitoring and comparison in an agile and timely manner with the client's real activity. x.- General data on accounts and/or business relationships with other financial institutions, national or foreign. xi.- The AML/CFT risk level of the client according to their own risk classification system. xii.- Data on references in favor of the client, including name of the grantor, number of their identification document, address, contact phone, workplace, time of knowing the referred client, and brief description of the result of the verification of the references indicating the employee who verifies it, date, time, name and signature of the verifier. xiii.- The names of their major clients and suppliers, as applicable. xiv.- The set of information established in Articles 8 to 11, inclusive, of this Standard, as applicable.”

Eighth: Amend subsections e) and f) of Article 12 of the AML/CFT Standard, which shall read as follows:

“e) The Supervised Entity must not create, update and modify the CIP unofficially. The creation and update of the CIP must be based on information given by the client and verified by the Supervised Entity. The update of the CIP will be made in the following cases, requiring the client the explanations and necessary supports that justify it:

i.- Every two years when it comes to high-risk clients. This periodicity may be shorter considering the importance of commercial relationships and AML/CFT risk levels according to the Entity's own policies. For Medium or Low risk clients, when atypical or significant changes, variations or increases are reflected. ii.- When their economic activities in terms of markets, sales and/or annual income experience changes, variations or atypical or significant increases in relation to their original CIP. It is the responsibility of each Supervised Entity to define in their AML/CFT prevention policies from what percentage or reasonable parameter they will consider it a significant variation.

iii.- When atypical or significant changes, variations or increases are reflected in the real activity with respect to the originally declared expected monthly transactional activity. It is the responsibility of each Supervised Entity to define in their AML/CFT prevention policies from what percentage or reasonable parameter they will consider it a significant variation. iv.- When new accounts are opened and/or new business relationships are established with the client. f) The CIP must, in addition, attend to the following guidelines:

i.- The initial CIP must be signed by the client, by the official who fills it out and reviews it, and by the official who authorizes it. In the case of subsequent updates of the CIP, both for natural and legal persons, it is not necessary for the client to sign again. Its update may be carried out by the entity through the use of means or mechanisms that allow it to receive and documentally evidence the pertinent information endorsed by the client and/or by those authorized by the client to modify their information, such as: email, fax, scanner, internet. The entity must keep records and/or a log that allows reconstructing the information changed in the CIP, date of each update, the executive who performed it and the official who authorized it.

ii.- Before the client's signature, there must be a note that says: “I authorize the entity to verify, by any legal means, all the information I have provided for the purposes of the relationships or accounts that support this Profile”. iii.- In updates of the CIP for natural or legal client persons, the signature of the latter will not be mandatory and may be done directly through mechanisms that allow evidencing that an update of the information was performed, such as: email, fax and scanner, and leave evidence in the system of the date of the last update and of the executive who performed it. iv.- When the update of the information on the client is performed through online banking and/or electronic service, the Supervised Entity must take the measures that are necessary to give security and reliability to the entered information, in correspondence with Article 25 of this Standard.”

Ninth: Amend Article 13 of the AML/CFT Standard, which shall read as follows:

“Art. 13.- Client File
The Supervised Entity must form and conserve, in good condition and updated, a physical file for each client, in which a copy of the initial CIP and its updates, the supports of the application of the CDD according to the risk level, as well as all the information and documents indicated in Articles 8 to 11, inclusive, of this Standard, in what is applicable for each type of client, must be archived.”

Tenth: Amend Article 14 of the AML/CFT Standard, which shall read as follows:

“Art. 14.- Standard CDD a) The Supervised Entity must apply a standard or ordinary CDD to clients and operations that according to their risk level classification matrix, classify as medium or normal risk clients; applying the measures provided in Articles 8 to 13, inclusive, of this Standard, as appropriate. b) The Supervised Entity, based on risk sensitivity, must apply a differentiated or stepped CDD in terms of intensifying or simplifying it with respect to the standard CDD, according to the variation of the risk levels of the clients or the commercial relationship according to updates of their matrix; considering the changes that occur, among others, in the following circumstances:

i.- The legal structure of the client and their background. ii.- The geographic location, jurisdiction or country of origin of the client, and of the origin of the funds to be used. iii.- The economic sector where the client operates and their activity within the sector. iv.- The client's work and professional environment, including the determination of whether they occupy a significant public or private position. v.- The characteristics, complexity and changes in the transactions, product or service required by the client. vi.- Significant changes in the expected monthly activity declared by the client with respect to their real activity. vii.- The channels and means of delivery or distribution of services and products, including the use of intermediaries, agents, brokers, managers or electronic banking. viii.- The use of complex and low-transparency legal or fiduciary structures and uses of bearer instruments or bearer shares. ix.- The payment means used. x.- The use of intermediaries and third parties. xi.- The linkage of accounts, or business with family members, representatives, or with the Supervised Entity or a group affiliated with it. xii.- Any other indicator that each Supervised Entity deems pertinent according to its own business and risk level, or according to any directive or other mechanisms issued by the Superintendence or competent authority.”

Eleventh: Amend Article 15 of the AML/CFT Standard, which shall read as follows:

“Art. 15.- Intensified CDD a) Intensified CDD (ICDD), reinforced, improved or expanded, is the set of policies, procedures and measures of internal management and control that are reasonably more robust, rigorous, demanding and exhaustive than the Supervised Entity must establish for clients classified by regulatory provision, or by their internal policies, or international standards as high risk. The ICDD must be applied in accordance with the following provisions:

i.- Clients classified in subsection c) of this article and/or in accordance with international standards as High Risk Clients, the supervised entity must apply ICDD to them. ii.- Clients not covered by the provision of the previous numeral, and to which the supervised entity qualifies as High Risk when applying their individual AML/CFT risk level classification matrix in which they combine, at least the risk factors indicated in subsection b) of this article, must apply ICDD to them. iii.- The Supervised Entity must apply at least one Standard CDD (SCDD) to the clients indicated in subsection d), numeral i), of this article, only in the cases where applying their individual AML/CFT risk level classification matrix of their clients justifies that they did not require an ICDD. iv.- For clients that the entity initially qualifies as high risk in accordance with what is established in numeral ii) of this article, and that in subsequent updates and/or application of the individual AML/CFT risk level classification matrix, the result reflects a lower risk, the entity must define policies, procedures, criteria, controls and authorized instances to authorize their transfer to the lower category; keeping records and/or logs that allow reconstructing the different risk levels assigned to a client during the contractual relationship and subsequent to the initial level, date of change, criteria or determining variables of the change, name and position of the official or instance that authorized it. b) The risk factors are all those circumstances and characteristics of the client, their activities and operations that generate a greater probability of AML/CFT risk and therefore merit special attention and an intensified CDD. Without prejudice to the AML/CFT risk factors that each supervised entity may additionally include based on its own policies, procedures, methodologies and internal processes, it must consider, combine and weigh in their individual AML/CFT risk level classification matrices of their clients or as instructed by another authority with competence in the matter, or as recommended by international best practices in prevention, at least the AML/CFT risk factors indicated in subsection d) of this article.

c) For the purposes of this Standard and in accordance with the main international standards, the following must be considered as high-risk clients to whom the supervised entity must apply Enhanced Due Diligence (EDD-I):

i.- Clients dedicated to activities or business lines, such as: Currency Exchanges and Money Changers; Individuals or companies dedicated to the handling, transportation, or physical transfer of money or securities, and/or sending of funds or remittances; Non-Bank Financial Institutions that provide services or carry out operations with electronic money; Casinos and companies or businesses of Games of Chance under any of their modalities; Civil Associations Without Profit Motive; Foundations or Non-Governmental Organizations (NGOs); Individuals or entities dedicated to unregulated financial or credit activities, Savings and Credit Cooperatives, Microfinance institutions or microfinance entities, Pawnshops, Loan Granting Societies and Individual Lenders. The risk will be even greater when, being obliged by national legislation, they do not develop AML/CFT programs, or, when developing them, they are not subject to an effective AML/CFT regulatory and supervisory regime, or when subject to it, this is inadequate.

ii.- Auto lots, dealers or lessors or providers of services of watercraft or aircraft.

iii.- Dealers under Multi-Level or Pyramid Sales Systems (network marketing) schemes;

iv.- Dealers of antiques, jewelry, metals and precious stones, coins, art objects and postage stamps;

v.- Dealers of weapons, explosives and ammunition.

vi.- Politically Exposed Persons (PEPs), national and foreign, including close family members, associates and close collaborators of such persons. When the PEP has ceased to hold public office, the financial institution may apply Standard Due Diligence (EDD-E) in accordance with its risk-based EDD policies, provided that, from the application of its individual risk level matrix for AML/CFT, it is justified that it did not require EDD-I.

vii.- Commercial Companies or Companies with bearer shares or convertible to bearer.

viii.- Trusts or legal structures especially when they function as Shareholding Holders (holding) abroad for the administration of assets and property, or as providers of fiduciary services.

ix.- Companies, businesses or establishments that offer or whose transactions are not conducted "face-to-face" or whose execution does not require the physical presence of the parties or that facilitate anonymity.

x.- Legal entities constituted, and/or established, and/or domiciled, and/or with presence or operations in territories known as tax havens or Off Shore.

xi.- Clients who have been the subject of a Suspicious Transaction Report (STR) and/or clients on whom investigative and/or judicial authorities have requested information on AML/CFT matters and/or any other manifestation of organized crime. Without prejudice to the functions and powers of the competent authority to analyze STRs, information on these clients is only for the exclusive consideration and internal management of the reporting Supervised Entity, which must not disclose the names of its clients that are being analyzed or considered for a possible STR or when such Report has been submitted, in correspondence with what is provided in article 29, letter "e", of this Standard, and what is provided in the banking law.

d) Based on international standards and best practices, supervised entities must assign weights or scores to the following factors along with the variables or categories belonging to each of them, and combine them in the individual risk level matrix for AML/CFT of clients, to determine the type of EDD corresponding to each level on a risk-based management basis for AML/CFT and in accordance with the policies, procedures and methodologies that each entity must have in its AML/CFT SIPAR. These factors with their variables or categories are the following:

i.- Factor: Client: The individuals dedicated to activities and/or categories that form part of the variables to be considered in this, and without prejudice to others determined by the entity, are the following:

i.a- Free Trade Zones.

i.b.- Investors, merchants and/or Real Estate Agencies;

i.c.- Foreign individuals and those domiciled abroad.

i.d.- Vehicle leasing companies

i.e- Clients with accounts and/or transactional activity presenting high activity in handling cash funds and/or transfers, and/or in instruments of consignment and/or in exchange desk operations or buying and selling of foreign currency.

i.f.- Clients constituted by professionals who individually, in partnership, alliances, consortium or firms, are providers of Legal, Notarial or Accounting services, provided the following characteristics are present:

i.f.i- That their services are related or directed habitually to the buying and selling or intermediation of real estate and commercial, industrial or financial entities; or to the administration on behalf of third parties, of accounts, securities, funds or other assets; or, to advice, constitution, creation, organization, operation or administration of companies, businesses, legal entities or legal structures or provision of domiciliary addresses, shareholders, executives or nominal representatives.

i.f.ii- That they are not subject to an effective regulatory and supervisory regime in matters of AML/CFT prevention and obligation to Report Suspicious Transactions.

i.g.- Notoriously Public Persons (NPP).

i.h.- Clients or users who recurrently or habitually use transactional channels that are not "face-to-face", or that do not require or minimize the physical presence of the parties, and/or that facilitate anonymity.

i.i.- Clients dedicated to international land transport and/or international excursions.

i.j.- Natural persons who individually or jointly, maintain in the Supervised Entity balances and/or debit flows and/or credit flows monthly, whether in passive, active or trust operations through accounts and/or transactions under any business modality, for amounts equal to or greater than two hundred thousand United States dollars (US$ 200,000.00), in national currency or any other, and that, in addition, these do not relate to their profile.

i.k.- Clients or habitual or recurrent users of private banking and/or correspondent banking and/or Trusts and/or Payable Through Accounts services.

i.l.- Natural or legal persons with financial, economic or commercial activity in countries, territories or jurisdictions that are considered by specialized international bodies in the matter as non-cooperators in the fight against AML/CFT; and/or as tax havens and/or high banking secrecy; and/or with low, poor, weak or null legislation and supervision in AML/CFT matters.

ii.- Factor: Products, and/or Services, and/or High-Risk Accounts: The products, services or activities that form part of the variables to be considered in this, are the following:

ii.a.- Private Banking.

ii.b.- Correspondent Banking and/or Correspondence Relationships.

ii.c.- Electronic Banking, via Internet or Telephone, or other forms of sophisticated electronic technologies for the provision of financial services, and/or businesses or transactions that are not "face-to-face", or that do not imply the physical presence of the parties, or that facilitate anonymity.

ii.d.- Electronic or cable transfers of funds.

ii.e.- Monetary instruments.

ii.f.- Safety Deposit Boxes.

ii.g.- Exchange Desk or Buying and Selling of Foreign Currency.

ii.h.- Loans guaranteed with liquid collateral (cash previously deposited in accounts, commercial securities, Time Deposit Certificates, Government Bonds, etc).

ii.i.- Trusts and asset administration services.

ii.j.- Payable Through Accounts services.

ii.k.- Accounts managed by Representative Offices.

ii.l.- Broker accounts, intermediaries or investment agent accounts or those acting on behalf of third parties.

iii.- Factor: Distribution Channels: The distribution channels and/or provision of products and/or services that form part of the variables to be considered in this, are the following:

iii.a.- Electronic Banking, via Internet or Online Branches.

iii.b.- Telephone Banking.

iii.c.- ATMs.

iii.d.- Financial services provided through the use of sophisticated electronic forms and/or cutting-edge technology that decrease or do not require the physical presence of the parties, facilitating or potentially facilitating anonymity.

iii.e.- Businesses or transactions through agents or intermediaries.

iv.- Factor: Countries, Jurisdictions and/or Geographic Areas: The following form part of the geographic variables to be considered in this:

iv.a.- Those considered by specialized bodies such as FATF, as non-cooperators or whose AML/CFT risk prevention systems are considered non-existent or, if existing, are not applied effectively.

iv.b.- Those considered by international bodies, such as the UN, as collaborators of international terrorism.

iv.c.- Those considered of special attention due to their high incidence in the production, and/or trafficking and/or consumption of illicit drugs.

iv.d.- Those considered by international bodies working in the fight against AML/CFT and/or in favor of international transparency; as offshore financial centers, tax havens, with high banking and fiscal secrecy, or with a high level of perceived public corruption.

iv.e.- Those that have been subject to sanctions by international bodies or included in special attention lists due to the high AML/CFT risk they represent.

iv.f.- National or internal geographic areas of the country itself, when there is public information from official entities that these are being frequently used for the transit or trafficking of illicit drugs, illegal immigrants or any other form of human trafficking, smuggling of merchandise, or illegal smuggling or trafficking of cash.

iv.g.- Those identified by the Supervised Entity itself as deserving special attention based on its experience with them, by the history of monitored transactions originating from them, by the presence of high indicators of public corruption, among others.”

Twelfth: Amend letter d) of article 16, of the AML/CFT Standard, which shall read as follows:

“d) Require updated Financial Statements or a photocopy of the most recent tax declaration, from high-risk clients that are legal entities.”

Thirteenth: Amend letter k) of article 16, of the AML/CFT Standard, which shall read as follows:

“k) The Supervised Entity must also apply Enhanced Due Diligence to clients and transactions that, originally considered of normal risk, present any of the following circumstances:

i.- There are doubts about the validity or sufficiency of the information on the client derived from the identification and verification process.

ii.- The client is included in lists of persons convicted, prosecuted or under investigation for AML/CFT matters by competent national authorities; or appear in national, foreign, international or specialized organism lists, on persons linked to these risks; or by any other information of which the Entity itself has knowledge.

iii.- There are sudden and unjustified changes by the client.

iv.- It concerns transactions and commercial relationships with clients who are operating from, countries, jurisdictions and geographic areas of high risk that do not comply with or sufficiently implement international standards in AML/CFT prevention matters.

v.- The Entity itself has suspicion or reasons to suspect that there is AML/CFT risk, regardless of the amount of the operation or the type of client; or, when such client has been the subject of a Suspicious Transaction Report (STR) and the Entity decides to continue with the contractual relationship.”

Fourteenth: Amend letter a) of article 21, of the AML/CFT Standard, which shall read as follows:

“a) In the case of National or International Electronic Transfers of Funds and Remittances or Money Sending, whether habitual or occasional; the Supervised Entity when acting as originator, intermediary or beneficiary, must:

i.- Include in the electronic fund transfer forms, in the corresponding automated system and in the related messages connected through the payment chain, the exact, precise and valid information on the client sending or receiving said transfer (name, type and number of identification, address, telephone and account number). This requirement must be complied with at least in the first and last link of the payment chain, as applicable.

ii.- Ensure that the aforementioned information is maintained with the transfer and messages throughout the entire payment cycle.

iii.- Examine more thoroughly fund transfers that do not contain complete information on the sender, or abstain from receiving them.

iv.- When it concerns family remittances from abroad, banks must keep records of the name of the originator and country of origin where the remittance comes from, as well as the beneficiary's data (name, type and number of identification and address).”

Fifteenth: Amend letter b) of article 26, of the AML/CFT Standard, which shall read as follows:

“b) When the Supervised Entity through its monitoring system for the early detection of unusual and/or suspicious activities, transactions or operations or in any other way, has knowledge of these in correspondence with the previous letter, it must carry out its examination, scrutiny or documented analysis by applying enhanced due diligence measures within fifty (50) days following their detection, for the purpose of determining whether to discard the suspicion or to proceed with sending the Suspicious Transaction Report to the competent authority. From this process and its conclusions, written evidence must be left and archived for the legal period.”

Sixteenth: Amend letter c) of article 28, of the AML/CFT Standard, which shall read as follows:

“c) The STR must also be presented:

i.- When the Supervised Entity cannot comply with enhanced due diligence.

ii.- When in the scrutiny process, request for information to the client for the justification and analysis of the transactions, operations or activities detected from the implementation of monitoring procedures and systems; the Supervised Entity could thereby directly or indirectly alert said client that they are being analyzed for a possible STR. In this case, the scrutiny process and request for information to the client must also be discontinued.

iii.- When it concerns clients whose actual movements and balances in accounts and/or in business relationship with the Supervised Entity, are not congruent with the expected activity according to the Client Comprehensive Profile (CCP); and/or that do not relate to the nature and size of business or occupation of the client, without reasonable justification duly documented.

iv.- When the Supervised Entity cannot determine the origin of the funds to be used in the accounts and/or in the business relationship.”

Seventeenth: This reform standard shall enter into force from its notification to the Banks and Non-Bank Financial Institutions subject to the supervision of the Superintendence of Banks, without prejudice to its subsequent publication in the Gaceta, Official Diary.

(f) illegible (Alberto Guevara Obregón) (f) V. Urcuyo V. (f) Gabriel Pasos Lacayo (f) illegible (Silvio Moisés Casco Marenco) (f) Fausto Reyes B. (f) U. Cerna B.

URIEL CERNA BARQUERO

Secretary of the Board of Directors SIBOIF