New UIF non-binding criteria related to intercompany loans

The Financial Intelligence Unit (UIF for its acronym In Spanish) recently updated a non-binding criterion which it published in the electronic system of Anti-Money Laundering Portal of the Ministry of Finance and Public Credit, under the Frequently asked questions and General Standards section, regarding treasury corporate transactions and/or intercompany loans within the same corporate group.

Previously, this criteria established that the granting of loans and/or credit lines, as well as guarantees, by and between companies of the same corporate group would not be considered Vulnerable Activities, given there was no offering to the public in general of those credit lines, loans or guarantees, and were carried out as part of the internal transactions of companies belonging to the same corporate group.

Nonetheless, with the issuing of this new non-binding criterion, the UIF modified its previous standing regarding corporate treasury transactions and/or granting of intercompany loans and credit lines, stating that they are to be considered as a Vulnerable Activity, therefore those carrying out such operations must comply with the obligations set forth by the Federal Law to Prevent and Identify Transactions Involving Illegally-sourced Funds (the AML Law) and its Regulations.

The new non-binding criterion of the UIF sets forth:

Are the transactions and/or loans granted by and between companies belonging to the same corporate group to be considered Vulnerable Activities?

Article 27 Bis, Section I, Subsection a) of the General Rules referred to in the AML Law, establish that the granting of loans or credit lines by and between companies that are part of the same corporate group, are Vulnerable Activities but are exempt from filing the Notice (“Aviso”) referred to in Article 17 section IV of the AML Law, as they will only have to present a monthly simplified Report (“Informe”) wherein they expressly point out that the transactions carried out are exempt from the Notices (“Avisos”) in conformity with Article 27 Bis of the General Rules.

Consequently, the granting of credit lines, loans or mutual agreements, by and between companies that belong to the same corporate group will be considered Vulnerable Activities, subject of complying with the obligations established in the AML Law, except for the formal filings, as long as the amount of the transaction was administered through Financial Institutions and that the companies involved are part of the same corporate group in terms of Article 3, Section X of the General Rules.

Now, as stated above, those companies that grant credit lines and loans to other companies part of the same corporate group, must comply with the obligations established in the AML Law, and instead of filing Notices, they shall present a monthly report as stated in article 27 Bis of the Regulations.

It is important to review this on a case-by-case basis, for each of the corporate groups (especially if the corporate treasury transactions or intercompany loans are regular, if they are registered as of today in the Portal of the UIF, if they have secured a ruling from the UIF, among others), to identify and define the next steps.

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