AML in Portugal

Situated within Europe, Portugal is actively engaged in the endeavor to counteract money laundering. The nation’s geographical positioning exposes it to certain risks, prompting Portugal to undertake proactive measures through an effective Anti-Money Laundering (AML) framework. The Portuguese government remains steadfast in its commitment to safeguarding against financial crimes, a stance born out of an acute awareness of the threats posed by money laundering. Given its longstanding struggle against narcotics-related offenses, a battle exacerbated by its geographical location, the Portuguese government must simultaneously staunch the financial streams of criminal organizations while persisting in its fight against these illicit activities.

Criminal syndicates resort to laundering proceeds from narcotics to obliterate traces of their illicit activities. Through this process, criminals obfuscate the criminal origins of their gains and employ the resulting income to bolster their criminal enterprises. Consequently, nations that fail to institute preventive measures against money laundering become susceptible to exacerbating consequences. Portugal, recognizing the imperative of countering such outcomes, has enacted comprehensive AML laws and regulations encompassing narcotics, human trafficking, terrorist financing, arms trafficking, and corruption. The objective is to stem the laundering of proceeds generated from these criminal activities.

Within Portugal, the spectrum of financial institutions, encompassing insurance companies as well, bears the responsibility of ensuring AML compliance. The “Financial Information Unit,” the Portuguese Financial Intelligence Unit, assumes the role of probing suspicious transactions. Financial institutions, upon identifying suspicious activities, are obligated to relay this information to the Financial Intelligence Unit. Moreover, the Financial Information Unit serves as a conduit of information dissemination, apprising financial institutions of evolving criminal methodologies and issuing alerts to prompt proactive measures.

Banco de Portugal serves as the central bank of the Portuguese Republic and holds the mantle of authority over anti-money laundering and the prevention of terrorist financing within Portugal. In this capacity, Banco de Portugal issues guidelines and regulations aimed at deterring money laundering, offering direction for financial institutions to follow. Portugal’s Banco de Portugal exercises its regulatory role to align the nation’s anti-money laundering laws with the standards set forth by FATF and the European Union. Financial institutions operating in Portugal bear the responsibility of adhering to the subsequent AML obligations, ensuring compliance with these measures:

1. Implementation of the AML Program
2. Conducting Know Your Customer (KYC) procedures
3. Enforcing Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) protocols
4. Identifying and preventing suspicious transactions
5. Maintaining meticulous records of customer information and documentation
6. Compiling reports detailing suspicious transactions
7. Facilitating the training of personnel dedicated to anti-money laundering efforts