On October 28, 2022, the Financial Analysis Unit of Ecuador (from now on referred to as “UAFE”) amended the norm on “Virtual Asset Providers Must Report Transactions to the UAFE[1].” This norm establishes, among other things, that virtual asset service providers who perform the following activities or operations for or on behalf of a natural or legal person are considered obligated parties to report such transactions to the UAFE:
The exchange between virtual assets and legal tender or vice versa.
The exchange between one or more forms of virtual assets.
Transfer, custody, and/or management of virtual assets or others that allow control over them.
Participation and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.
Any service related to virtual assets.
The obligated parties must send the following reports to the UAFE:
Report of individual transactions whose amount is equal to or greater than US$10,000, or its equivalent in other currencies, as well as multiple transactions that together are equal to or greater than US$10,000, provided they are made for the benefit of the same person within 30 days, within fifteen (15) days after the end of each month.
Report suspicious transactions, in the case of legal persons, within four (4) days from the date on which the compliance committee becomes aware of such transactions and, in the case of natural persons, within four (4) days from when the obligated party becomes aware of the transactions.
Report of their own national and international operations whose amount is equal to or greater than US$10,000, or its equivalent in other currencies, within fifteen (15) days after the end of each month.
The report, within fifteen (15) days after the end of the month, of the non-existence of operations that equal or exceed the legal threshold.
The obligated parties must use the System for the Prevention of Money Laundering and Terrorism Financing (from now on referred to as “SISLAFT”) to send the reports. Through SISLAFT, they can access the manuals that contain the report formats. In addition, they must obtain a registration code from the UAFE within five (5) months from the date of publication of the Resolution in the Official Registry, April 22, 2022.
The obligated parties must designate and register a compliance officer (and a substitute if they so decide) after the approval of the training provided by the UAFE, who will be responsible for submitting the reports to the UAFE within the established timeframes and complying with the other obligations set in the law inherent to their position. Natural persons who are obligated parties may be their compliance officers. This obligation must be fulfilled within one (1) month after the five (5) months of publication of the resolution in the Official Registry have elapsed.
The obligated parties must have a Risk Prevention System, for which legal persons will prepare a Money Laundering Prevention Manual and a Guide for the Prevention of Financing of Crimes with a Risk-Based Approach. Natural persons will prepare a Basic Guide on the same subject.
The obligated parties will submit the reports to the UAFE six (6) months after the date of publication of the Resolution in the Official Registry, which is April 22, 2022, except for the report of items 1 and 3 of this document (sections 3.1 and 3.3 of article 3 of the Resolution), which will be made starting in January 2023.
[1] In Official Registry number 179, dated October 28, 2022, the Financial Analysis Unit of Ecuador issued Resolution number UAFE-DG-2022-0577, dated October 11.
