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Uruguay

Last Updated: 26/05/2009

CENTRAL AUTHORITY FOR REPORTING

The Central Bank of Uruguay (Unit of Financial Information and Analysis), is the agency in charge of receiving reports from reporting persons.

Also, this Unit receives information regarding financial transactions involving assets that are suspected to have arisen from illegal activities, in order to prevent the crime of money laundering.

Uruguay is not part of the Egmont Group.

OTHER ANTI-MONEY LAUNDERING REGULATOR(S)

  • The National Drugs Committee.

    A public organization that has, among other duties, the mission to develop the guidelines related to national policy planning in drug related matters, directed to the repression of money laundering and connected crimes.
  • National Drugs Secretariat.

    A public organization in charge of coordinating the execution of the investigation, prevention, treatment, rehabilitation and repression policies, in compliance to the guidelines developed by the National Drugs Committee.
  • The Money Laundering Prevention Training Center (CeCPLA).

    Guided by the National Drugs Committee, the CeCPLA is in charge of coordinating and executing the training programs regarding money laundering.

  • The Unit of Financial Information and Analysis.

    This office located within the Superintendence of Financial Brokerage Institutions of the Uruguayan Central Bank has the following responsibilities, inter alia:

    1. To receive, ask, analyze and send to the competent Court any information referred to financial transactions that involve assets potentially arisen from illegal activities;

    2. To submit bills related to general regulations or give specific instructions in the context of its jurisdictions.
  • The Coordinating Commission Anti-laundering.

    Part of the National Drug Committee. Its duties include:

    1. Designing the national policies regarding money laundering and putting them forward for consideration to the National Drugs Committee;

    2. Proposing to the Executive Power the national strategy to fight against money laundering;

    3. Promoting the development of actions coordinated by the organizations with jurisdiction on this matter, in accordance with the established aims and plans.

ARE LAWYERS COVERED BY MONEY LAUNDERING LEGISLATION?

The law, which regulates the Prevention and Control System of Money Laundering and Terrorism Financing (Act No. 17.835), does not establish that lawyers, who, in the context of their private practice, find out about suspicious transactions have the duty to report this information.

Notwithstanding the foregoing, section 2 of the referred Act sets forth that natural persons or legal entities who, on the behalf of third persons, perform financial transactions or run businesses on a regular basis (provided the businesses are not a consortium or an economic group) will have the obligation to inform about:

  • Transactions that, according to general commercial practice of the respective activity, can be considered unusual;

  • Transactions that arise without clear economic or legal justification;

  • Transactions with an unusual or unjustified complexity;

  • Financial transactions involving assets for which there are suspicions of illegality concerning their origins.

Therefore, if a lawyer makes one of these transactions, he will be bound by the referred rules.

LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS.

It is important to point out that none of the said regulations in principle are applicable to lawyers in the context of their private practice.

ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?

Foreign lawyers are not allowed to practice law in Uruguay unless they validate their foreign law degrees and are admitted by the Uruguayan Supreme Court.

Notwithstanding the foregoing, once in the Uruguayan territory they are bound by the Uruguayan laws.

LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE.

There are no specific guidelines for lawyers regarding AML. Nevertheless, taking into consideration the FATF 40+9 recommendations, the following measures were recommended by GAFISUD in 2007 for university professionals:

  1. Application of due diligence measures to their clients and conservation of registries when planning or carrying out transactions for their clients, related to the following activities:

    a) Real state purchase;

    b) Administration of money, negotiable securities, or other assets of the client;

    c) Administration of banking accounts, saving accounts or negotiable securities;

    d) Organization of contributions for the creation, operation or administration of companies;

    e) Creation, operation or administration of companies or legal entities, and purchase of legal entities.

  2. Obligation on lawyers in some cases to report suspicious operations when acting by themselves or in representation of a client, unless the relevant information was obtained in circumstances protected by the attorney-client privilege.

  3. Tipping-off prohibition preventing lawyers from warning their clients about the fact that a report of suspicious operations has been filed.

Click here to see all the presentations prepared to university professionals in Uruguay regarding AML.

IS THE LAW SOCIETY/BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?

The Code of Professional Responsibility of the Uruguayan Bar Association (CAU) states that “the lawyer should refrain from performing any act likely to attempt the dignity of the profession”.

It also points out that “the lawyer should refrain from advising in any transaction if he considers that there are signs that it could entail the commission or concealment of an illegal act”.

The Bar can sanction a lawyer whose behavior does not adjust to the principles and rules laid down in the Code.

It is important to point out that it is not mandatory for lawyers to be part of the Uruguayan Bar Association in order to practice law. In Uruguay the legal profession is not self-regulated as it is, for instance, in the United States.

DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.

There is no regulation about special precautions regarding clients.

However, in order to avoid lawyers becoming involved in money laundering, several law professors recommend that attorneys refrain from advising in transactions they consider suspicious. In this sense, it is usual practice for affidavits to be created where the clients state that all their funds come from legal activities and in compliance with the Uruguayan legislation.

DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?

N/A.

ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?

N/A.

ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES?

There are no simplified due diligence measures for certain types of clients.

However, lawyers sometimes research potential clients before accepting them. There are ways of accessing information regarding publicly held corporations, for example through public registries where any person can access information regarding a legal entity, their directors, representatives and administrators.

In some cases, they can also access information regarding the annual financial statements of companies, if they have encumbrances, etc.

ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.

N/A.

WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?

In principle, there is no regulation that obliges lawyers to report suspicious transactions in which their clients or beneficial owners may be involved.

Several authors have pointed out that if a lawyer reported those situations he may be committing a crime by violating the attorney-client privilege (in Uruguay this is also known as “professional secret”).

Notwithstanding the foregoing, some authors have established that it is important to distinguish three situations:

  • When the lawyer is privy of the suspicious operations in the context of his practice;

  • When the lawyer acts as a representative for a certain business in which he is not acting in a legal capacity (in which case he has to report the operation);

  • If the lawyer acts as a simple representative but also acts in the stages of planning and advising of the business (in which case the attorney-client privilege applies).

It is not, however, as simple on a practical level to determine when a lawyer is acting in a professional capacity and when as a party representative.

DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS?

When a lawyer intervenes in her capacity as attorney, the information she gains access to whilst advising on a case will be protected by the attorney-client privilege.

In fact, section 302 of the Criminal Code sets forth that: “The person who, without just cause, reveals secrets to which he had access due to his profession, employment or commission, will be punished with a fine when damages are caused (…)”.

However, please note that there are some exceptions regarding the attorney-client privilege.

It is important to point out that if a lawyer acts in the context of what is set forth in section 2 of the Act No. 17.835, quoted above, section 4 of the act states that compliance in good faith with the obligation to report will not constitute a breach to the attorney-client privilege, providing it adjusts to the proceedings established by the Central Bank of Uruguay or the Executive Power, taking into account that this behavior is performed in compliance to a legal rule passed in consideration of the general interest (section 7 of the Constitution).

Therefore, the lawyer performing this act will not be subject to any liability.

DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?

N/A.

ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?

N/A.

IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.

N/A.

DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT.

From a legal point of view, there are no restrictions on accepting a new client.

The Uruguayan Code of Professional Responsibility (AKA Ethics Code) of the Uruguayan Bar Association (CAU), does set forth that:

  • The lawyer should refrain from advising in any operation, if he considers that it could imply the performing or concealing of an illegal act.

As we pointed out before, the Uruguayan Bar Association (CAU) can only impose disciplinary sanctions to its members, and in Uruguay the registration in the Bar is not mandatory for the practice of the profession.

ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE.

N/A.

DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION.

Legally, there are no other mechanisms that affect lawyers in money laundering issues.

Nevertheless, from the ethical point of view, lawyers try to avoid dealing with clients whose businesses may be connected with transactions of suspicious origins, in order to protect their reputation and avoid public scandals.

HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?

If there has been a prosecution against a lawyer in regards to money laundering, it has not been made publicly available.

Nevertheless, there have been several cases of public notaries involved in money laundering offenses.

HAS THE FINANCIAL ACTION TASK FORCE (FATF) CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?

In 2006, a second Mutual Evaluation Report was released by GAFISUD in association with the Financial Action Task Force. This report has been updated at a XIII Meeting of representatives of GAFISUD, which took place in 2008, who have published an update of their findings.

Information provided by:

Dr. Rafael García Martínez
Dr. Santiago Pereira
Dr. Daniel Rueda

Rueda, Abadi & Pereira
Consultores Jurídicos, Tributarios y Contables
Plaza Independencia 721 Piso 7º
Edificio IBM Uruguay CP 11000
Montevideo
Uruguay

General Email: rap@rap.com.uy  
Official Website: www.rap.com.uy