This is the warning given by FUSADES in a legal analysis of the measure taken by the Superintendence of the Financial System (SSF)
A poor assessment could lead the country into what are commonly called “international blacklists”, meaning that a country or territory is at high risk of money laundering and terrorist financing crimes, which which hinders or prevents all types of financial transactions, for example, the financing of international bodies, but also the international financial relations of private companies, “warns FUSADES in a legal analysis of the risks of the order given by the Superintendency of the Financial System (SSF) to banks for not canceling accounts of people suspected of money laundering.
On December 9, 2020, the SSF sent a circular instructing commercial banks not to terminate contractual relations with a customer (closing bank accounts) even if that person is investigated or associated with him. with the crime of money laundering through journalistic notes.
SEE: Government orders banks not to close accounts of investigators for alleged money laundering
“A business relationship motivated by the mention of a customer, partner or associate in a mass media or the existence of a request for information made by a competent authority or solely by its quality may not be terminated. of Politically Exposed Person “, the document states.
He adds that “no termination of a business relationship may be made on the basis of this decision on the presumption of guilt.”
In the legal analysis, the SSF states that “it has become aware that banking business relationships with customers, partners or associates were terminated when through publications in the media they were related to illegal activities or being classified as politically exposed people “, so the banks argued that this would affect their business reputation and could consequently be subject to sanction by the authorities.
Faced with this, FUSADES points out that “the instructions of the SSF then, on the one hand, affect risk-based prevention, but on the other hand, the information requirements they contain and which are usually reported to the FIU ( Financial Research Unit), may affect the centralized nature of this, which is an international standard. “
FUSADES also considers that “some controls become more lax, such as restrictions so that the obliged entities can require information only under certain assumptions”.
In the first half of 2022, El Salvador will be evaluated by the Caribbean Financial Action Task Force (IFATF), the regional body of the FATF (International Financial Action Task Force), so FUSADES warns that the measures instructed by the government, through the Superintendency, “they can lead to a poor rating, which would lead to negative consequences for the country,” such as entering the “blacklist” of countries at risk for money laundering.
According to the analysis of the Department of Legal Studies of FUSADES, it can also have negative consequences in the fight against corruption and money laundering, as non-compliance with international standards can exclude the country from the Egmont Group, which promotes cooperation and the international exchange of information between the Financial Research Units of the States, in order to fight in a coordinated manner against money laundering and terrorist financing, which, of course, in fact, it happened with the country suspension for a lapse in 2018.
In addition, it ensures that the instructions can be questioned as to their legality and constitutionality, as their scope contradicts art. 1,195 of the Commercial Code, which states that banks may terminate the current account deposit, by giving notice to the depositor.
“The application of the instructions by the SSF would limit, without legal support, the fundamental right to free contracting with respect to current accounts,” FUSADES questions.
He also points out that the instructions of the Superintendency may affect the principle of legality of the Public Administration, since without having the powers to do so, they leave without effect the section 2 ° of the special provision of article 9 of the ‘Instruction of the Financial Research Unit for the Prevention of Money Laundering and Terrorist Financing, issued by the FGR, an institution with constitutional autonomy and powers to issue such an instruction.
“Beyond whether the said provision is legally correct or not, the truth is that the SSF has no powers to leave it without effect,” FUSADES states.
At the time, when consulted by the current measure Gustavo Villatoro, head of the SSF, justified that the instruction does not seek to protect any person either by corruption or money laundering, but rather to give weapons to justice so that he can capture in time the money that could be frozen to an investigated person.
“When prosecutors come to want to freeze accounts, there is no longer an account and no more money because the bank has closed them,” said Villatoro, who also notes that the measure allows for greater banking.