On September 1, 2021, the Secretariat for the Prevention of Money and Property Laundering ("SEPRELAD") issued Resolution 316/21, extending to trust companies authorized to operate as such in Paraguay in accordance with Article 19 of Law 921/96 "On Fiduciary Businesses" the obligations in matters of PMLTF that Resolution 70/19 of SEPRELAD imposes on banks and financial companies.

In this way, now trust companies authorized to operate as such by the Central Bank of Paraguay (BCP) must comply with the obligations, requirements and guidelines of PMLTF that according to Resolution 70/19 must be taken into account by banks and finance companies in Paraguay, based on risk management.

Therefore, today with Resolution 316/21, trust companies in Paraguay must develop a comprehensive profile of the risks of money laundering and financing of terrorism ("ML/TF") involved in their turn, taking into account their market, their objective, their size, the volume and complexity of the operations they handle, following the criteria and parameters considered minimally necessary to assemble an adequate PMLTF system, determined by Resolution 70/19.

Thus, supervision in this area will focus on "compliance" and "risk-based" supervision.
The compliance component will be composed of the policies, controls and procedures determined by trust companies, following the same guidelines as banks and finance companies. The risk management component will be covered by AL/TF's risk identification, assessment, mitigation and monitoring policies, procedures, and controls.

Thus, among other things, by imposing Resolution 316/21 on trust companies the same obligations of PMLTF that banks and finance companies have under Resolution 70/19, new roles and responsibilities are established for the Boards, which must, among others, take into account the risks when establishing the objectives of their entity and approving the risk-based training plan. It also establishes rules for Compliance Officers, who must have exclusive dedication in the entity that hires them with a direct, full-time employment relationship, except for the exercise of teaching, with the category of first managerial level. The vacancy in this position may not last more than 60 calendar days, being able to appoint a Corporate Compliance Officer for the members of the same financial group. PMLTF's functions and responsibilities are also established for the General Managers, which are responsible for implementing the prevention system, within the scope of their competence, and the duties of knowledge of the obligated subject are extended to their own employees, suppliers or counterparties.

Likewise, the risk management measures of AL/TF are provided in relation to the knowledge of the client, the directors and employees of the supervised subject and suppliers, knowledge of the market, control activities and detection and reporting of suspicious transactions, as well as internal and external audits. In relation to the client, criteria are established for the determination of risks of AL/TF, according to the type of person, geographical location, product etc., and simplified or extended due diligence measures, as appropriate. The Board of Directors must approve a Code of Conduct with the guiding principles, values and policies that highlight the mandatory nature of the standards that make up the PALFT system and must implement a AL/TF Risk Prevention and Management Manual with the minimum content mentioned in Resolution 70/19. Trust companies will also need to implement demanding risk self-assessment methodologies.

With this new resolution of SEPRELAD, trust companies are obliged to have AL/TF prevention procedures according to the guidelines set by Resolution 70/19, in the same way as banks and financial institutions