Anti Money Laundering (AML) in Chile

Money laundering in Chile is a growing issue that is primarily narcotics related. Chile criminalized money laundering under an Anti Money Laundering (AML) Law in 1995 and later updated the Law in 2003, to expand upon predicate offenses. In addition to narcotics trafficking, which was criminalized in the original AML Law, offenses include terrorism in any form (including the financing of terrorism), illegal arms trafficking, corruption, fraud and the mandatory reporting of suspicious transactions.

The Law also established Chile’s Financial Intelligence Unit (FIU). Originally, Chile’s FIU was called the Department for the Control of Illicit Drugs. Under the revised 2003 Law, Chile’s FIU was renamed the Unidad de Análisis Financiero (UAF). The UAF is responsible for collecting and analyzing all Suspicious Transaction Reports (STRs). Financial institutions in Chile are required to follow a Know Your Customer (KYC) policy in order to identify customers with checking accounts.

In an attempt to strengthen its AML policies, Chile became a member of the Organization of American States (OAS) Inter-American Drug Abuse Control Commission (OAS/CICAD) Experts Group to Control Money Laundering and the South American Financial Action Task Force on Money Laundering (GAFISUD). Chile’s UAF joined the Egmont Group, a multinational network of FIUs from around the world, in 2004, furthering the country’s ability to combat against money laundering and terrorist financing.

The Economy of Chile

Chile’s economy has improved over the past few years, with unemployment rates dropping and regional trade agreements growing. Chile is also home to the world’s largest copper producing company, Corporacion Del Cobre-Chile (CODELCO). Copper prices are surging, translating into significant economic growth for the country. Forestry and wood products, wine, fresh fruit and seafood also account for a large portion of Chile’s economy.

Chile’s trade liberalization was heightened after it signed a free trade agreement with the United States that took effect in 2004. The country continues to add to its extensive network of Free Trade Agreements (FTAs), improving Chile’s overall level of economic development.

Banking in Chile

Established in 1925, The Banco Central de Chile is the country’s central bank. The Central Bank plays a huge role in preserving Chile’s economy. It accomplishes this through maintaining monetary policy, protecting the value and stability of the national currency and seeking to keep inflation low and stable.

The Banco Central de Chile’s other functions include ensuring the normal functioning of domestic and external payments and issuing the Chilean banknotes and coins. The banks and financial institutions of Chile are some of the strongest in South America.

Currency in Chile

The Peso is the official currency of Chile, sharing the same symbol as the United States dollar sign. Coins come in denominations of 1, 5, 10, 50, 100 and 500 pesos, although one-peso coins are fast disappearing and fives and tens are uncommon. Banknotes are issued in denominations of 500, 1000, 2000, 5000, 10,000 and 20,000 pesos.

Any notes that are in poor condition are withdrawn from circulation by the Banco Central de Chile. If a banknote has been mutilated but still contains more than half of the original text, it can be taken to the Bank and exchanged for its full value.

Other Key Statistics of Chile

Time Zone: UTC-4 (1 hour ahead of Washington, DC during Standard Time).

Daylight Savings Time: +1hr, begins second Sunday in October; ends second Sunday in March.

Location: Southern South America, bordering the South Pacific Ocean, between Argentina and Peru.

Population: 16,454,143 (July 2008 est.).

Labor Force: Approximately 51.2% work in industry, 44% in services and 4.8% in agriculture. The unemployment rate is approximately 7%.

Languages Spoken: Spanish (official), Mapudungun, German and English.

Trade Organizations: Chile is a member of the United Nations (UN) and the World Trade Organization (WTO).