Registration With SUGEF: Does It Affect Me?

The Costa Rican Government has been focusing on improving the regulatory framework for the prevention of money laundering and financing of terrorism for years now.

Such attempts have intensified with the publishing of bylaws and guidelines for Law 7786: “Law on Narcotic Drugs, Psychotropic Substances, Unauthorized Drugs, Related Activities, Legitimation of Capital and Financing Terrorism”.

Who Needs to Comply with the SUGEF Requirements? 

Articles 15 and 15 bis of Law 7786 define who needs to be registered with the General Superintendency of Financial Entities (Superintendencia General de Entidades Financieras, SUGEF).

By 2018, bylaws to register and deregister required subjects per law 7786 were published, making it mandatory for certain parties to get registered with SUGEF starting January 1st, 2019. Basically, all companies that fit any of the following criteria must comply: 

• Systematic activities: carried out in an organized and habitual way; and/or

• Substantial financial activities: for amounts equal to or greater than $400,000 USD in a 12-month period.

For example, the exchange of money and money transfers, the administration of financial resources, remittances, and the issuance and operation of credit cards.

As well as: casinos, pawnshops, the purchase and sale of real estate (including intermediaries and developers of real estate projects), dealers of metals and precious stones or of products that contain them (jewelers), to non-profit organizations that receive or send money to jurisdictions internationally classified as risky, law firms and accountants and the same lawyers and accountants who carry out the purchase and sale of real estate, and individuals and legal structures, to those who manage their clients’ money, trustees (excluding trustees of guarantee trusts, testamentary trusts, or custody of assets) and to those who grant credit facilities.

What should I do?

Among the several actions required to be compliant, bound subjects must:

• Define a person who will act as representative (holder of a digital signature) with the SUGEF. Keep in mind this person will also need to meet minimum criteria.
• Get registered with SUGEF through their Registration System of Obligated Persons created by the SUGEF on the site web and register.
• Prepare a Compliance Manual based on your business model and related SUGEF guidelines.
• Prepare a “Know Your Client Policy”.
• Prepare a “Know Your Employee Policy”.
• Keep records of documentation related to clients and employees.
• Keep all information updated.
• Provide mandatory training to all staff.

I was already registered, am I missing something?

During November and December 2019, a new bylaw with corresponding guidelines was created to regulate the “Risk of Legitimation of Capital, Financing Terrorism and Financing the proliferation of weapons of mass destruction” for those required per law 7786, the main innovation being the classifying of existing reported parties into different categories and the creation of a “Liaison person”.

In conjunction with these regulations, SUGEF made public their External Notice SGF-1153-2020 on April 3, 2020 where it establishes: 

• Months of May and October 2020 as the months to complete the aforementioned classification.
• Need of a mandatory update every 6 months, specifically during the first 15 business days in April and October of each year.
• SUGEF will notify the registered party of its corresponding category in November 2020, same that will prevail from January 2021 to December 2022.
• The classification process will be performed by SUGEF every 2 years.
• Designation of a “Liaison person” or “Compliance Officer”.

In a nutshell:

If you fit into the required persons criteria, you must register with SUGEF as soon as possible.

If you were already registered, you need to update your records and send them to SUGEF during the month of May so that they can categorize you.

If you want more information on this subject, contact us. We offer comprehensive assistance with the SUGEF registration process, you can review the details following this link.