This is the warning that Fusades makes in a legal analysis of the measure taken by the Superintendency of the Financial System (SSF)
A wrong assessment could lead the country to enter the so-called “international blacklists”, which means that a country or territory has a high risk of money laundering and terrorist financing crimes, which makes everything difficult or impossible. the type of financial transactions; for example, the financing of international organizations, but also the international financial relations of private companies “, warns Fusades in a legal analysis on the risks of the order that the Superintendence of the Financial System (SSF) gave to banks not to cancel the accounts of persons suspected of money laundering .
On December 9, 2020, SSF sent a circular instructing commercial banks not to terminate their contractual relations with a customer (closing a bank account) even if this person is being investigated or is associated with money laundering through journalistic notes.
SEE: Government orders banks not to close accounts of respondents for alleged money laundering
“A business relationship cannot be concluded motivated by the mention of a client, partner or associate in a media or the existence of a request for information made by a competent authority or only because of their capacity as a politically exposed person,” the document states.
He adds that ‘termination of a commercial relationship cannot be effected on the basis of that decision on the presumption of guilt’.
In its legal analysis, SSF states that “it found out that commercial banking relations with customers, partners or associations were concluded when through media publications they were linked to illegal activities or when they were classified as politically exposed persons”, by to which the banking entities claimed that this would damage their commercial reputation and, consequently, could be subject to sanctions by the authorities.
In view of this, Fusades points out that “the SSF instructions affect, on the one hand, risk-based prevention, but on the other hand, the information requirements they contain and which are normally reported to the FIU (Financial Investigation Unit). ), may affect the centralized nature of this, which is an international standard ”.
Fusades also considers that “some controls are looser, such as restrictions, so that obliged entities can only request information in certain cases”.
In the first half of 2022, El Salvador will be evaluated by the Caribbean Financial Action Task Force (CFATF), the regional body of the International Financial Action Task Force (FATF), for which Fusades warns that measures instructed by the government to through the Superintendency , “May cause a poor rating, which would have negative consequences for the country”, such as blacklisting countries at risk of money laundering.
According to the analysis of the Fusades Department of Legal Studies, this can also have negative consequences in the fight against corruption and money laundering, as non-compliance with international standards may exclude the country from the Egmont Group, which encourages international cooperation and exchange of information between state financial investigation units. to fight in a coordinated way against money laundering and terrorist financing, which, in fact, took place with the suspension of the country for a period in 2018.
In addition, it is ensured that the instructions can be questioned regarding their legality and constitutionality, as their scope contradicts art. 1,195 of the Commercial Code, which establishes that banks may terminate the deposit in a checking account, by a notification given to the depositor.
“The application of the instructions by the SSF would limit, without legal support, the fundamental right to free contracting in terms of verification accounts,” asks Fusades.
It also indicates that the Superintendency’s instructions may affect the principle of the lawfulness of general government, since, without having the power to do so, they render ineffective paragraph 2 of the special provision of Article 9 of the Financial Investigation Unit’s Prevention of Money Laundering Instructions; terrorist financing, issued by the FGR, an institution with constitutional autonomy and powers to issue such instructions.
“Whether the above provision is legally correct or not, the truth is that the SSF does not have the power to make it inefficient,” says Fusades.
At the time, consulted on the current measure, Gustavo Villatoro, head of the SSF, justified that the instruction is not intended to protect anyone from corruption or money laundering, but rather to give weapons to justice so that they can capture over time, the money that could be frozen to an investigated person.
“When prosecutors come to want to freeze their accounts, there is no account and there is no money because the bank has closed them,” said Villatoro, who also points out that the measure allows for more banking.