It has been only a few weeks since we published our initial article on new Anti-Money Laundering Law No. 155-17, but changes brought by its enabling regulation, enacted by President Medina on Nov. 16, 2017, merit that we revisit this developing topic one more time, especially with regards to three key areas: a) restrictions on cash payments and rules on proof of non-cash payment for regulated operations, b) ultimate beneficiary reporting rules, and c) tax infractions threshold.
Restrictions on Cash Payments and Rules on Proof of Non-Cash Payments
To recap, one of the main rules established by this law is that it prohibits cash payments above the following amounts for these activities:
Payments for real estate above RD$1,000,000 (US$20,800) Payments for motor vehicles above RD$500,000 (~US$10,400) Payments for jewelry above RD$450,000 (~US$9,390). Payments for corporate share transfers or incorporations above RD$250,000 (~US$5,200) Given the above, in order to register any operation involving amounts exceeding these limits purchasers must now file evidence of payment through a non-cash method at the related rentity (i.e., Registrar of Title for real estate purchases, Chamber of Commerce for share transfers, and DGII for motor vehicles).
According to the recently enacted enabling regulations, however, the cash restrictions mentioned above for said operations and thus, their respective proof of non-cash payment rules will only enter into effect once the pending internal regulations of the competent authorities are approved. These internal regulations are expected to be submitted to public consultations before the end of February 2018.
The Decree also expressly prohibits real estate Registrars from requesting additional information such as client due diligence, source of funds, etc., when it states that they would only be authorized to request proof of the non-cash method of payment in order to proceed with the operation's registration. Approved methods of non-cash payment may include: copies of the check or other legal non-cash method of payment, wire transfer (either national or international), deposit slip made at the seller's bank account and credit or debit card payment receipt.
Ultimate Beneficiary rules
Clients with privacy and confidentiality concerns will see that new ultimate beneficiary rules will considerably limit the advantage of using corporate or trust structures for these specific purposes, as both financial and...