New compliance legislation as early as January 1st, 2009

The Parliament of Aruba is expected to vote on the approval of the changes and/or introduction of the National Ordinance on Identification Service Providers (“Landsverordening Identificatie bij Dienstverlening”) NOISP and the National Ordinance on the Reporting Center of Unusual Transactions, (“ Landsverordening Meldpunt Ongebruikelijke Transacties (“NORC”).

History

In 1996 the obligation was introduced for Financial Service Providers to require identification of the customers whenever a financial transaction is made. Also, financial institutions were obligated to report unusual transactions to the Reporting Center of Unusual Transactions (“Meldpunt Ongebruikelijke Transacties”). Any transaction exceeding Afl. 2500.00 is considered to be an unusual transaction, as well as when the same person is doing several smaller transactions in a short period of time or several transactions go to the same recipient. Whenever such a situation arises, the financial institutions have the obligation to report the transaction(s) to the Reporting Center. For transactions exceeding Afl. 5000.00 a source of funds declaration must be filled by the client of the financial institution.

What is new?

Due to the fight on terrorism and the possible financing of terrorism as well as the fight against money laundering, the Government has decided to broaden the scope of aforementioned National Ordinance. The following changes will also apply to the NORC.   Whenever the NOISP becomes effective , all service providers that are mentioned in the NOISP will have the obligation to require all customers to provide identification when service is provided. The service providers are amongst others: financial institutions; life insurance companies; money transfer companies; casinos; anybody who, as a profession or trade, sells and/or intermediates in the sales and purchase of real estate, cars, ships, airplanes, art objects, antiques, jewelry in the broadest sense of the word; attorneys; notaries; tax consultants; accountants; any other natural person or entity, appointed by National Decree.

The scope of the services that fall under compliance obligations has also has been broadened. These include: real estate brokerage; sales of cars, ships, airplanes, art objects, antiques, jewelry in the broadest sense of the word; the providing of advice on the sales and/or purchase of real estate, cars, ships, airplanes, art objects, antiques, jewelry in the broadest sense of the word; the management of money, shares, stocks, coins, paper money, the incorporation and management of entities, companies, special purpose vehicles, and other entities with similar purposes and/or create input to incorporate entities, companies, special purpose vehicles, and other entities with similar purposes; the sales and/or purchase and/or take over of companies; any other service appointed by National Decree.

Service providers must require their customers to show identification when a service is provided that falls under the definition under the NOISP. Every service provider has the obligation to establish the identity of the customer before the service is provided.

 Only a valid Aruba driver’s license, a valid Aruba Identity Card, or a valid Passport are allowed to be used for the establishment of the identity of the customer. In case that the customer is a legal entity, a stamped copy of the registration of the Chamber of Commerce or a copy of the notarial deed of incorporation is deemed to be proper identification.

Administrative sanctions, such as administrative fines and administrative burden under penalty are new in the legislation. If an infraction of the new laws occurs administrative sanctions can be applied. The maximum amount per occurrence is Awg. 250,000.00.

It is not officially known when these National Ordinances will become effective, but whenever they become effective service providers will have to have proper compliance procedures and documentation in place, in order to comply with the new laws.

For more information on these new laws or assistance in setting-up compliance procedures and documentation feel free to contact us.