SARLAFT & SAGRILAFT Compliance in Colombia

## **Integral Risk Management and Self-Control System for Money Laundering and Financing of Terrorism** The System of Self-Control and Integral Risk Management of Money Laundering and Financing of Terrorism (SAGRILAFT) is a vital mechanism for companies in Colombia. Implemented under the regulation of the Superintendency of Companies, this system aims to mitigate the risks associated with money laundering, the financing of terrorism and the proliferation of weapons of mass destruction. In this article, we will explore in detail what SAGRILAFT is, how it differs from SARLAFT, the steps for its implementation, the regulations in force, the companies obliged to adopt it, and some specific cases. ### **What is SAGRILAFT?** SAGRILAFT is a set of measures that companies must implement to control and manage money laundering and terrorist financing (ML/FT) risks. This system includes the identification, evaluation and mitigation of these risks through appropriate policies, procedures and controls. Its main objective is to protect companies and the financial system from illicit activities that may affect their reputation and operation. ### **Differences between SAGRILAFT and SARLAFT** Although both systems seek to combat money laundering and terrorist financing, there are key differences between SAGRILAFT and SARLAFT: * ### **Scope and Application** SARLAFT is specific to the financial sector and is mandatory for entities supervised by the Financial Superintendency of Colombia. In contrast, SAGRILAFT applies to companies in the real sector and other entities supervised by the Superintendency of Companies. * ### **Requirements** SAGRILAFT focuses on the implementation of mandatory minimum measures and a comprehensive risk management system, while SARLAFT has more detailed and specific requirements for the financial sector. * ### **Regulations** SARLAFT is regulated by the Basic Legal Circular of the Superintendency of Finance, while SAGRILAFT is governed by Chapter X of the Basic Legal Circular of the Superintendency of Companies, with specific modifications over time.  ### **SAGRILAFT Implementation: Step by Step** Implementing SAGRILAFT involves a series of steps to ensure compliance with regulations and the effectiveness of the system. A general process for its implementation is detailed here: 1. ### **Design and Approval** The first step is to design a system that takes into account the materiality, characteristics and activity of the company, identifying ML/FT risk factors through tools such as the risk matrix. The board of directors or the highest corporate body must approve the system, presented jointly by the legal representative and the compliance officer. 1. ### **Audit and Compliance** A compliance officer, with appropriate experience and training, should be designated to audit and verify compliance with SAGRILAFT. This officer must report to the Superintendency of Companies and ensure that the system is being applied correctly. 1. ### **Outreach and Training** It is crucial to disseminate SAGRILAFT to all employees and stakeholders, conducting periodic training at least once a year to familiarize everyone with the system and teach them how to identify and report suspicious transactions. 1. ### **Assignment of Functions** Clearly define the responsibilities and powers necessary for the implementation of SAGRILAFT, transforming them into rules of conduct for all those involved in the company. 1. ### **Monitoring and Updating** Implement a continuous process of monitoring and updating SAGRILAFT to adapt to changes in regulations or in the company’s operations. This includes the evaluation of audit reports and the adoption of necessary corrective measures.  ### **Regulations** SAGRILAFT is regulated by the Superintendency of Corporations through Chapter X of the Basic Legal Circular. The regulation establishes the requirements and deadlines for its implementation, as well as the penalties for non-compliance. Companies should be aware of updates to these regulations to ensure ongoing compliance. ### **Which companies are required to implement SAGRILAFT?** The following companies are required to implement SAGRILAFT: 1. **Companies with revenues or assets equal to or greater than 40,000 legal monthly minimum wages in force (SMLMV).** 2. **Companies in specific sectors such as real estate agents, precious metals and gemstones trading, legal and accounting services, construction, and virtual asset services.** 3. **Companies subject to special regimes, including companies that administer commercial self-financing plans, savings and loan operators, and multilevel marketing companies.** ### **Concrete Cases** An example of companies that should implement SAGRILAFT are precious metals traders, which are at high risk of being used for money laundering. These companies must take specific measures such as enhanced due diligence and identification of beneficial owners to mitigate these risks. Another case is that of virtual asset servicing companies, which must comply with additional requirements due to the nature of their operations and the high ML/FT risk associated with cryptocurrency transactions. ### **Conclusion** The implementation of SAGRILAFT is essential for companies in Colombia, not only to comply with legal regulations but also to protect against significant risks that may affect their reputation and operation. Adopting this system effectively requires an ongoing commitment to training, auditing and updating internal procedures. ### **Cybergraphy** 1. Superintendence of Corporations. (2023). [Chapter X of the Basic Legal Circular](https://www.supersociedades.gov.co) 2. Pirani Risk. (2022). [All you need to know about SAGRILAFT in Colombia](https://www.piranirisk.com) 3. Herrera and Associates. (2020). [What is SAGRILAFT and when should it be implemented?](https://www.herreraasociados.co) 4. Risk Global Consulting. (2023). [Complete guide to SAGRILAFT in Colombia](https://www.riskglobalconsulting.com) 5. Ne Digital. (2022). [SAGRILAFT: what is it and who is obliged to comply?](https://www.nedigital.com) [**For more information, Contact us!**](https://serviciolegal.com.co/en/contact/)

## Money Laundering and Financing of Terrorism Risk Management System The Money Laundering and Terrorist Financing Risk Management System (SARLAFT) is a crucial tool for companies in Colombia. Designed to prevent and mitigate the risks associated with money laundering and terrorist financing, SARLAFT has become an essential component for regulatory compliance in the country. This article provides a detailed guide to SARLAFT, addressing its importance, key components, implementation and benefits for Colombian companies. ### What is SARLAFT? SARLAFT is a comprehensive system that seeks to identify, evaluate, monitor and control the risks associated with money laundering and terrorist financing in organizations. This system is mandatory for several entities in Colombia, including banks, insurance companies, brokerage firms, and companies that handle significant resources. Implementing SARLAFT not only helps to comply with legal regulations, but also protects companies from possible sanctions and reputational damage. ### Importance of SARLAFT in the Colombian Business Context ### Regulatory Compliance Compliance with regulations related to money laundering and terrorist financing is essential to avoid legal and financial sanctions. The Superintendencia Financiera de Colombia and other regulatory entities impose strict requirements for the implementation of SARLAFT, and non-compliance can result in significant fines and loss of operating licenses. ### Reputation Protection Companies that are perceived to be involved in illegal activities may suffer irreparable damage to their reputation. The implementation of an effective SARLAFT system demonstrates an organization’s commitment to ethics and legality, enhancing the confidence of customers, investors and other stakeholders. ### Fraud Prevention A well-implemented SARLAFT allows companies to detect and prevent suspicious and fraudulent activities, thus protecting their resources and minimizing financial risks. ### Key Components of SARLAFT ### Risk Identification and Assessment Risk identification is the first step in the implementation of SARLAFT. Companies should evaluate their operations and determine which areas are most vulnerable to money laundering and terrorist financing activities. This includes the review of customers, products, services and distribution channels. ### Policies and Procedures Developing clear policies and procedures is fundamental to risk management. These policies must be specific, detailed and aligned with current legal regulations. Including due diligence procedures, continuous monitoring and suspicious activity reporting is crucial to the success of the system. ### Training and Awareness Ongoing staff training is essential to ensure the effectiveness of SARLAFT. Employees must be aware of the risks, know the company’s policies, and know how to identify and report suspicious activity. ### Monitoring and Reporting Constant monitoring of the company’s transactions and activities allows early detection of irregularities. Organizations must have technological systems that facilitate data analysis and the generation of reports for the corresponding authorities.  ### Implementation of SARLAFT in your Company ### ### Initial Diagnosis The first step to implement SARLAFT is to perform an initial diagnosis to identify the risk areas and the specific needs of the company. This diagnosis should be carried out by experts in regulatory compliance and risk management. ### System Design Based on the initial diagnosis, a SARLAFT system should be designed that includes policies, procedures and appropriate technological tools. It is important that this design is customized to meet the particularities of each company. ### Implementation and Training Once the system has been designed, it is implemented. This includes the configuration of technology systems, documentation of policies and procedures, and training of the personnel involved. ### Continuous Monitoring Ongoing monitoring is essential to ensure the effectiveness of SARLAFT. Companies must conduct periodic audits and system updates to adapt to new regulations and changes in the risk environment. ### Benefits of SARLAFT for Colombian Companies ### Improved Risk Management Implementing SARLAFT allows companies to better manage the risks associated with money laundering and terrorist financing, reducing the likelihood of penalties and financial losses. ### Increasing Stakeholder Confidence An effective SARLAFT system improves the perception of the company among customers, suppliers, investors and other stakeholders, strengthening business relationships and attracting new business opportunities. ### Compliance with International Standards In addition to complying with national regulations, a good SARLAFT system helps companies to align with international regulations, facilitating their expansion and operations in global markets. ### Conclusions SARLAFT is an indispensable tool for companies in Colombia, not only to comply with legal regulations, but also to protect their reputation and financial resources. Implementing an effective SARLAFT system requires a comprehensive approach that includes risk identification and assessment, development of policies and procedures, staff training and ongoing monitoring. The benefits of a well-implemented SARLAFT are significant, improving risk management and increasing stakeholder confidence. ### Cybergraphy 1. [Financial Superintendency of Colombia](https://www.superfinanciera.gov.co/) 2. [Financial Information and Analysis Unit (UIAF)](https://www.uiaf.gov.co/) 3. [Bank of the Republic of Colombia](https://www.banrep.gov.co/) 4. [Ministry of Finance and Public Credit of Colombia](https://www.minhacienda.gov.co/) [If you need more information, Contact Us!](https://serviciolegal.com.co/en/contact/)

Colombia is a strategic country for many companies in the world, and with this in mind, a series of benefits of foreign investment in Colombia have been developed for companies to take advantage of. Colombia is a country with many opportunities for growth, both internally and externally. Its great location, policies, diversity and great labor force make it the perfect place to invest in different industrial sectors with great growth possibilities. Against this backdrop, the national government has developed a series of benefits of foreign investment in Colombia for companies, which we will present in this blog. ## It has a strategic and privileged location The first of the benefits of foreign investment in Colombia for companies is about the location of the country, a great attraction if you as a company want to connect with other countries in the Americas. Colombia has access to two important maritime areas that connect the countries, the Caribbean Sea and the Pacific Ocean. This is especially attractive for maritime import processes, as it facilitates the transport of goods arriving in the country, and from there they can be sent to other destinations. Speaking of destinations, Colombia connects with the main cities in the Americas in an average of 6 hours by air, a great benefit if you wish to carry out operations by air. ## Large free zones Free trade zones are a great attraction for companies, since they give them certain privileges in the execution of their work activities within the country. Free trade zones are areas within the country that have a series of special regulations that have a positive impact on the company’s bidding activity. Among the benefits of free trade zones in Colombia are. * Special 20% income tax rate (outside a free trade zone, this tax is 35% in 2022). * Goods entering these zones are exempt from taxes (VAT). * In turn, purchases made by companies in free trade zones of raw materials, inputs or finished goods from tax zones in the country are exempt from taxes. * Companies can sell their products from free trade zones to third countries. * Goods entering the free zones may remain in them indefinitely. ##  ## Multiple tax benefits Another of the benefits of foreign investment in Colombia for companies, and the one that attracts the most attention, is the possibility of acquiring multiple tax benefits. Foreign capital is highly valued in Colombia, which is why it has developed a series of tax benefits that allow investors to grow within our country. Mega investments, in particular, have the following benefits as long as they are made between January 1, 2020 and January 1, 2024: 1. Enjoy a 27% income tax rate. 2. To be exempt from excise tax on dividends and wealth tax. 3. Be able to depreciate its assets over a minimum period of two years, regardless of the useful life of the asset. 4. To be able to sign tax stability contracts, which allows the state to guarantee the investor the validity of the aforementioned benefits. ### In conclusion These benefits of foreign investment in Colombia for companies are really attractive and represent a great opportunity for growth for both the country and the company. Also remember that, if you register the investments made in our country before the International Exchange Department of the Banco de la República, and these exceed 650 Minimum Legal Wages in Force, it allows you to access the [ **resident visa** ](https://serviciolegal.com.co/visas-colombia/) (R). So foreign investors, take advantage of these benefits and take Colombia as a destination to grow.

The fiscal area refers to everything related to taxation and revenue collection for the State. It includes tax legislation and regulations, as well as compliance with tax obligations by companies and individuals. It is relevant because taxes are an important source of revenue for the State and are essential to finance public services, infrastructure and social programs. In addition, compliance with tax obligations is a legal duty that must be fulfilled by both companies and individuals, and non-compliance can lead to penalties and fines by the tax authorities. ## Companies and individuals may require legal consulting in the tax area for several reasons: **Interpretation of tax legislation:** Tax legislation can be complex and may vary from jurisdiction to jurisdiction. Legal consulting helps companies and individuals understand the tax laws and regulations applicable to their specific situation. **Tax burden optimization:** Tax consultants can help companies and individuals identify legal opportunities to reduce their tax burden, such as tax deductions, tax incentives or more efficient tax structures. **Tax planning:** Tax consultants can design appropriate tax strategies and planning to minimize risks and avoid future tax compliance issues. **Tax compliance:** Companies and individuals must file accurate and timely tax returns. Legal consulting can ensure that all requirements are met and avoid penalties for omissions or errors in reporting. **Representation before tax authorities:** In case of tax audits or inspections, tax consultants can represent companies or individuals before the tax authorities, protecting their rights and interests during the process. **Update on changes in tax laws:** Tax laws may change over time. Legal consulting allows companies and individuals to stay informed about the latest updates and adjust their strategies accordingly. In summary, legal consulting in the tax area is important to ensure proper compliance with tax obligations, avoid penalties and fines, optimize the tax burden and plan efficient and legal tax strategies. Tax consultants, generally attorneys specializing in tax law, have the knowledge and experience necessary to provide advice and representation in tax matters, ensuring compliance with regulations and protecting the interests of their clients. ## Cybergraphy <https://mexico.unir.net/derecho/noticias/que-es-derecho-fiscal/>