The Prevention and Control of Money Laundering and Terrorism Financing is of particular importance for Mercantil Servicios Financieros as a “Regulated Business” under Resolution No. 110 “Rules governing the management and inspection of risks related to crimes involving Money Laundering and Terrorism Financing applicable to Institutions regulated by the National Securities Superintendency”, issued by the National Securities Superintendency (Spanish abbreviation SNV) on May 19, 2011 and published in Official Gazette No. 39,691 of 8 June 2011; under Joint Resolution No. 122 issued by the Ministry of the Interior and Justice and the Ministry of Planning and Finance on June 15, 2012 providing for the "Administrative rules and procedures that Regulated Businesses must adopt with a view to identifying and complementing appropriate measures for freezing funds or other assets, in accordance with United Nations Security Council Resolutions," published in Official Gazette No. 39,945 of the same date; under Resolution No. 158 issued by the Ministry of the Interior and Justice on August 13, 2012, which provides for legislation to regulate the process of implementing and applying Resolution No. 1373 approved by the U.N. Security Council, on the listing and delisting of persons who finance and commit or attempt to commit terrorist acts, published in Official Gazette No. 39,986 dated August 15, 2012; and lastly, Circular DSNV/CJ 1630/2012 issued by the National Securities Superintendency on August 24, 2012, which provides for the “Rules governing application of the U.N. Security Council Resolutions on the freezing of terrorist-related funds or other assets”.
In order to comply with this legal framework, and to mitigate the risks associated with Money Laundering and the Financing of Terrorist acts, Mercantil Servicios Financieros conducts an ongoing process to manage such risks through an "Integral system for managing risks involving Money Laundering and Terrorism Financing " which has been formulated, adopted, implemented and developed to include sufficient and effective policies, procedures and methods to identify, assess and implement corrective measures to reduce the possibility of a financial transaction being used to conceal the source, purpose and destination of illicit funds, or to divert any kind of funds towards the financing of terrorist groups or activities.
The following anti-money laundering laws are in force in Venezuela:
- Organic Law against Organized Crime and Terrorism Financing (Spanish abbreviation LOCDO/FT), published in Official Gazette No. 39,912 of April 30, 2012.
- Organic Law on Drugs, published in Official Gazette No. 39,510 of September 15, 2010, reprinted in Official Gazette No. 39,546 of November 5, 2010.
- Securities Market Law, published in Official Gazette No. 39,546 of November 5, 2010.
Mercantil Servicios Financieros has an efficient structure for the comprehensive management of risks involving Money Laundering and Terrorism Financing (ML/TF)
The structure of the “Comprehensive System for the Prevention and Control of Money Laundering and Terrorism Financing” involves all Mercantil's employees, including the highest ranking staff, and enables appropriate, sufficient and efficient measures to be applied through policies and procedures that help prevent, control and detect any attempt to launder money or finance terrorist acts.
The system is comprised by the Board of Directors, its Chairman, the Executive President and the ML/TF Compliance Officer, the ML/TF Prevention and Control Committee, the ML/TF Prevention and Control Unit and the employees responsible for ensuring compliance in all areas susceptible to ML/TF risks.
What is Money Laundering?
It is the process of concealing the proceeds of illicit activities or making it appear as if they were gained through legitimate means (Article 4.15, Definitions, in the LOCDO/FT).
Consequences of Money Laundering
Money Laundering has an international dimension that hinders a country's development and has a negative impact on different aspects of a nation's society, politics and economy. Due to this, solutions must be sought to help combat Money Laundering through Government policies and international support for anti-money laundering methods.
What is Organized Crime?
It is when three or more persons form a group for a period of time and take or fail to take action with the intention of committing at least one of the crimes defined in the LOCDO/FT, in order to obtain, directly or indirectly, a financial or other material benefit for themselves or for third parties. Organized crime is also when one person acts on behalf of a corporation or an association with the intention of committing at least one of the crimes foreseen in said Law (Article 4.9, Definitions, in the LOCDO/FT).
What is Terrorism Financing?
It is the action of providing, facilitating, harboring, managing, collecting or gathering funds by any means, directly or indirectly, in order that these may be used entirely or partially by an individual terrorist or a terrorist organization to commit one or several terrorist acts, even if the funds were not actually used and even if the terrorist act or acts were not actually committed. Further, such act or acts under no circumstances may be justified by considerations of a political, philosophical, ideological, religious, racial or similar nature. (Article 53 of the LOCDO/FT).
We protect your interests
Mercantil Servicios Financieros protects the interests of its investors and in turn safeguards its reputation as a company operating in the Stock Market, in compliance with the Anti-Money Laundering and Anti-Terrorism Financing legislation in force in Venezuela, by applying a "Due Diligence on the Investor" policy through which it seeks to obtain and keep up to date the information on individual and institutional investors based on truthful, transparent and full disclosure. Mercantil Servicios Financieros constantly monitors its investors' transactions according to the degree of risk they represent.
Information that individuals must provide when filling in the Mercantil Servicios Financieros Investor Information Form.
- Given names and surnames, valid identity card in the case of Venezuelan citizens, residents and temporary residents, and valid passport in the case of non-residents.
- Valid Tax Information Registration number (Spanish acronym RIF)
- Place and date of birth, nationality, marital status, profession or occupation.
- Economic activity
- Home address and telephone number.
- Work address and telephone number.
- Investment services or products held by the Regulated Business
- Salary and other monthly income
- Estimated average monthly investment through intermediation services and estimated average number of monthly transactions through intermediation services. The investor should provide information that is consistent with the economic activity carried out.
- Reason for requesting the investment services.
- Need to regularly receive or make international transfers. Please indicate country of origin and destination. (Does not apply to investment products) o One bank reference.
- One bank reference.
- Sworn statement of the origin and destination of the funds, which is included in the form that must be filled in and signed by the investor.
- Sworn statement by the individual acting as a Regulated Business in the Non-Financial Sector under Resolution No.110 and the LOCDO/FT to the effect that he/she has adopted, developed and implements programs, standards and controls to mitigate risks any risk that may arise from using Mercantil's services and products to launder money or finance terrorist acts.
- Signature and fingerprint.
Politically Exposed Persons
(National and Foreign) (PEPs)
As a “Regulated Business” under the LOCDO/FT, Mercantil Servicios Financieros must design, establish and apply Due Diligence procedures when entering into and conducting a commercial relationship with individual investors classified as Politically Exposed Persons (PEPs).
Politically Exposed Persons (PEP): Individuals or persons who are or were, or whose closest relatives or immediate circle of colleagues are or were, high-level, trusted or similar political figures, by reason of holding a high-ranking position as officials in the executive, the legislative, the judiciary or the military of a national or foreign government, whether or not elected; high-ranking members of a national or foreign political party; or high-ranking executives of a corporation owned by a foreign government. Close relatives shall include parents, siblings, spouses, direct offspring or parents in-law of the politically exposed person. Also included in this category are entities which, as companies, businesses or other entities, were created by said official for the benefit thereof. (Article 4.19, Definitions, in the LOCDO/FT).
Information that companies must provide when filling in the Mercantil Servicios Financieros Investor Information Form.
- Company name and registered address.
- Valid Tax Information Registration number (Spanish abbreviation RIF)
- Incorporation papers, bylaws and subsequent amendments.
- One bank reference. (A printed reference is required for companies who do not hold an account with Mercantil Banco Universal)
- The last three (3) income tax returns.
- Given names and surnames, valid legible identity card for Venezuelan citizens, foreign residents and temporary residents, and valid passport for non-resident foreigners, for all individuals authorized to sign Mercantil Servicios Financieros' Investor Form.
- Address and telephone number of the company.
- Professional, commercial or industrial activity and products or services offered
- Related parties.
- Monthly sales.
- Estimate of the average monthly investment to be made through the intermediation services.
- Reason for requesting Mercantil's investment services.
- Need to regularly receive or make international transfers. Please indicate country of origin and destination. (Does not apply to investment products)
- Sworn statement of the origin and destination of the company's funds, by the individuals authorized to sign the Investor Form, which is included in the form that must be filled in and signed by the investor.
- Sworn statement by the company acting as a Regulated Business in the Non-Financial Sector under Resolution No.110 and the LOCDO/FT to the effect that it has adopted, developed and implements programs, standards and controls to mitigate any risk that may arise from using Mercantil's services and products to launder money or commit acts of terrorism.
- Signature and fingerprint of the individuals authorized to sign.
How investors can avoid being deceived and involved by third parties in operations that might be linked to Money Laundering and Terrorism Financing, and how to prevent fraud.
- By not allowing third parties to use securities services to make investments that are exclusive to them.
- By keeping their identity document safe so that third parties are unable to steal their identity for illicit purposes.
Administrative rules and procedures that the Regulated Businesses, defined in the LOCDO/FT, must adopt in order to identify and implement appropriate measures to freeze funds and other assets, in accordance with U.N. Security Council Resolutions and Joint Resolution No. 122 issued by the Ministry of the Interior and Justice and the Ministry of Planning and Finance
As a "Regulated Business" under the LOCDO/FT, Mercantil Servicios Financieros must review the U.N. Security Council's list of individuals and corporate entities presumed to be terrorists or to be involved in the financing of terrorist activities, and must freeze the funds of any investor whose given names and surnames are written or pronounced the same as those of someone on the list, or whose identity card or passport numbers or any other data of interest coincides with numbers or data on said list.
Legislation regulating the process of implementing and applying Resolution No. 1373 approved by the U.N. Security Council, on Listing and delisting those who commit, or attempt to commit or finance terrorist acts, Resolution No. 158 issued by the Ministry of the Interior and Justice
As a "Regulated Business" under the LOCDO/FT, Mercantil Servicios Financieros must freeze the funds or assets of any individual or body corporate listed by the National Office Against Organized Crime and Terrorism Finance (Spanish abbreviation ONDO), if said individual or body corporate is presumed to be a terrorist or to be participating directly or indirectly in one or several terrorist acts, or to have participated in or helped to commit or finance them.
Legislation on the application of U.N. Security Council Resolution on freezing terrorist-related funds or other assets, Circular No. DSNV/CJ 1630/2012, issued by the National Superintendency of Securities (Spanish abbreviation SUNAVAL)
Given that Mercantil Servicios Financieros is a "Regulated Business" under the LOCDO/FT, it must check the list of individuals and/or corporate entities designated by the U.N. Security Council in accordance with Resolution No. 1267 or the list of persons designated by the National Office against Organized Crime and Terrorism Financing (ONDO), in accordance with Resolution No. 1373 of the U.N. Security Council, sent by the National Superintendency of Securities (SUNAVAL), in accordance with the rules, policies and procedures on the prevention and control of money laundering and terrorism financing (ML/TF) established, in order to determine whether any investor on the lists is linked to Mercantil Servicios Financieros, and proceed to freeze funds or assets if it is determined that the lists contain data that coincides with an identity document number, date of birth, or the way the given names and surnames are written or pronounced.