Compliance: The Legal Duties derived from International Trade


As the international market grows and countries become more open to world trade, unethical and illegal practices are being implemented, to obtain economic and other benefits. 

In response, government intervention has become highly needed, enforcing the fulfilment of legal duties for both national and international companies, and the breach of them can lead to being banned from doing business in one or several countries.

In many cases (such as UK’s), companies must observe different legislations in order to satisfy these duties, which can be confusing as each legal system states its own requirements.

In the following article, we will analyse UK’s Money Laundry Regimen and Colombia’s SARLAFT regulations, which must be simultaneously observed by British companies in Colombia.

  1. UK’s Compliance Law

To fulfil the requirements of UK’s Money Laundry Regimen, investors must simultaneously observe the “Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017”, the “Proceeds of Crime Act 2002”, the “Money Laundering Regulations 2007” and the “Terrorism Act 2000 (Business in the Regulated Sector and Supervisory Authorities)”.

These documents contain the responsibilities for investigating money laundering and terrorist financing. For that purpose, it states a wide number of specific obligations concerning these matters, such as ownership and management restrictions, customer due diligence, reliance and record-keeping, transfer of funds regulations, among many others.

Because of the extraterritoriality of this legislation, it must be met not only by UK companies operating in their country, but by all UK companies, no matter where they do business at. This, however, does not relief these companies from having to comply with the local law of the countries where they operate, being bound by its territoriality.

  1. Colombia’s SARLAFT

Colombia’s Administration System for the Prevention of Money Laundering and Financing of Terrorism (SARLAFT) can be perceived as a consequence of Colombia’s efforts for being part of the Organization for Economic Co-operation and Development (OECD), which demanded a consistent improvement of the economic practices among Colombian companies.

Regarding this commitment, SARLAFT establishes a system based on the prevention of risk and eradication of the insertion of shady money to the country’s financial system. In addition, it sets a control structure directed to detect and report operations that are intended to be registered with the intention of legalizing activities related to Money Laundering and Financing of Terrorism.

  1. Applying a compliance policy as a UK Company in Colombia

Since both legislations are designed to pursue the same objectives, they can be simultaneously fulfilled by having clear knowledge of all the mandatory dispositions that can be found in both regimens. 

As wide as it sounds, identifying the common points they share and the obligations they both state is a priority. For example, knowing for sure that keeping transparent and unaltered track of the company’s documents and registers is required by both legislations, by doing that, the entity is simultaneously complying to both regulations.

In that order, what must be done next is a scan of the differences between UK’s Money Laundry Regimen and Colombia’s SARLAFT, so it’s possible to build an integrated course of action that allows a UK company to satisfy all the UK’s compliance obligations, as well as Colombia’s.

  1. The way to overcome the issues derived from compliance

First, there must be a risk assessment to determine the company’s operations that are vulnerable to risks associated to bribery, money laundering and the financing of terrorism. Once the assessment is done, a corporate policy that is aimed at addressing those risks must be designed. As it has been stated in this article, this policy needs to consider both Colombian and British laws.

Then, this policy must be accurately implemented, by the revision of the existing documents, procedures, controls, audits, and any other mechanism, or the creation of new ones, so every aspect of the company is adjusted to all the applicable compliance law.

Additionally, training and awareness regarding compliance topics must be incorporated into the company to stay adjusted to the compliance international regimen and the business world needs as they evolve

All things considered, it is essential to fully identify anti money laundering and financing of terrorism law in each of the countries you operate at and be assured that you’re effectively applying a serious policy for its compliance, as you could be breaching one or many duties derived from it without even knowing. It is easy enough to overlook essential obligations in one legal system, as wide as it can be, so fully compliance with two or more legal systems requires a very thorough legal guidance and the full commitment of the company.




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Diseño y Desarrollo: Náutica Digital