Anti-Money Laundering (AML) in Portugal
Click to Launch Free Tutorial
|Money laundering in Portugal is a continuing threat to the financial marketplace. The Government of Portugal has made a number of changes over the past several years to establish its comprehensive and effective Anti-Money Laundering (AML) regime.
Portugal is an entry point for narcotics transiting into Europe, and government officials indicate that most of the money laundered in Portugal is narcotics-related.
Portugal's comprehensive AML regime criminalizes the laundering of proceeds of serious offenses, including terrorism, arms trafficking, kidnapping, and corruption. Financial and non-financial institutions have a mandatory reporting requirement of all suspicious transactions to the Public Prosecutor regardless of threshold amount.
All financial institutions, including insurance companies, must identify their customers, maintain records for a minimum of ten years, and demand written proof from customers regarding the origin and beneficiary of transactions that exceed 12,500 EUR. Non-financial institutions, such as casinos, property dealers, lotteries, and dealers in high-value assets, must also identify customers engaging in large transactions, maintain records, and report suspicious activities to the Office of the Public Prosecutor.
Portugal’s Financial Intelligence Unit (FIU), known as the Financial Information Unit, or Unidade de Informação Financeira (UIF), was established in 2002 and operates independently as a department of the Portuguese Judicial Police (Polícia Judiciária). At the national level, the UIF is responsible for gathering, centralizing, processing, and publishing information pertaining to investigations of money laundering and tax crimes. It also facilitates cooperation and coordination with other judicial and supervising authorities. At the international level, the UIF coordinates with other FIUs. The UIF has policing duties but no regulatory authority.
Law No. 25/2008 came into effect in 2008, enacting the European Union's Third Money Laundering Directive. Law no. 52/2003 (Anti-Terrorism Law) was amended in 2007, which made the financing of terrorism a standing offence.
AML Training in Portugal
The Law on the Repression and Prevention of Money Laundering Offences of 2004 makes it mandatory for all financial institutions in Portugal to implement training systems, in order to ensure compliance by educating employees on the proper ways to report and prevent money laundering in transactions.
The Economy of Portugal
Since joining the EU in 1986, Portugal has enjoyed considerable economic progress. Portugal has become a diversified and increasingly service-based economy over the past several decades.
The government has successfully privatized many state-controlled firms and liberalized key areas of the economy, including the financial and telecommunications sectors. Clothing and footwear, machinery, chemicals, cork, paper products, and hides have become major exports whereas machinery, transportation equipment, chemicals, petroleum, textiles, and agricultural products are important imports.
Portugal experienced a period of strong economic growth throughout much of the 1990s, but suffered set backs from 2001 through 2007. The economy contracted in 2009, and fell again from 2011 to 2014, as the government implemented spending cuts and tax increases to comply with conditions of an EU-IMF financial rescue package. The economy has modestly recovered since then.
Banking in Portugal
The Banco de Portugal is the country’s Central Bank and an integral part of the European System of Central Banks (ESCB). As a result, the Banco de Portugal operates in an international and, primarily European environment marked by the Economic and Monetary Union (EMU).
The Banco de Portugal is a member of the European Central Bank (ECB), or Eurosystem. The ECB issues the Central Bank of Europe’s main currency, the Euro. The ECB’s primary responsibility is to maintain the purchasing power of the Euro.
The monetary functions of the ECB include: the opening of accounts for credit institutions, public entities and other market entities; open market and credit operations; requiring credit institutions to hold minimum reserves, regulating to create an efficient and sound clearing and payments system; and co-operating with third country central banks, credit institutions, and international organizations.
The ECB has the exclusive right to set interest rates for the Eurozone.
Currency in Portugal
The currency in Portugal is the Euro, which serves as the currency of the 15 members of the European Central Bank. The states that have adopted the Euro as currency make up the Eurozone. These countries are: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. The Euro is the single currency for more than 338.6 million Europeans.
The Euro was first phased into the global economy in 1999. In the beginning, participating countries had to combat the use of both Euros and former national currencies. Beginning in 2002, national currencies were withdrawn.
The Euro comes in both banknotes and coins. Banknotes are available in 5, 10, 20, 50, 100, 200 and 500 denominations. Coins are available in 1, 2, 5, 10, 20, 50 cent pieces, and 1 and 2 Euro coins.
Other Key Statistics of Portugal
Time Zone: UTC+1 (6 hours ahead of Washington, DC during Standard Time).
Daylight Savings Time: +1hr, begins last Sunday in March; ends last Sunday in October.
Location: Southwestern Europe, bordering the North Atlantic Ocean, west of Spain.
Population: 10,813,834 (July 2014 est.)
Labor Force: 5.271 million (2014 est.). 10.5% of the population was working in agriculture, 23.1% in industry, and 66.4% in services. The unemployment rate is 14.2% (2014 est.).
Languages Spoken: Portugese(official), Mirandese (official - but locally used).