Uruguay has started the year with a new law against money laundering, a regulation that brings together all the provisions that were previously dispersed in different legal instruments. The reform places the country within international standards, in a global context of ever stricter regulations.
According to the new law, approved towards the end of 2017, tax offenses are considered predicate offences to money laundering, which entails a criminal process. Lawyers and accountants must report suspicious transactions, as well as banks, financial advisors, real estate agents, auctioneers, civil associations, casinos, foundations, political parties and NGOs.
After only a few months trajectory, the reform still raises a series of questions and doubts on the part of the taxpayers. What changes is this regulation generating in the Uruguayan financial industry? "The Uruguayan financial industry acquires the new requirement of ‘know your client’. From now on, tax compliance is mandatory," explains Marcelo Gutiérrez, Managing Partner for Invertax.
"This change is not only occurring in Uruguay, but in many other countries, and is part of the new reality: more transparency, more information exchange. It was under discussion for a long time, but tax evasion is very difficult to support as a moral argument. The discussion on whether governments make good use or misuse of these resources is a different matter," adds the expert on tax issues.
At Invertax they believe that the Uruguayan financial industry will encounter some difficulties: "As in the rest of the world, and with the end of banking secrecy, the offshore industry in Uruguay is on its way out. At present, only the United States offers traditional offshore services," says Gutiérrez, Uruguay’s representative at the International Fiscal Association.
The new restrictions raise fears of a decrease in foreign investment, something that Marcelo Gutiérrez plays down: "It depends on what type of investment we are talking about, if we refer to Real Estate in Punta del Este, this new requirement will complicate things for many of the ’traditional’ investors. However, direct foreign investment, such as the pulp mills and other important ones already planned, will not be affected."