Wednesday, May 6, 2009

All Transactions Exceeding $10,000 Will Be Reported

President Alvaro Colom announced on Monday that all cash transactions of properties and items worth more than U.S. $10,000 will be subject to greater control, to prevent money laundering and drug trafficking.

The president said that from now on, transactions must be conducted with checks or a declaration of the source of the funds must be made.

The government seeks to control the purchases of property, vehicles, tractors, motorcycles, boats, jewelry, and precious metals, whose price exceeds U.S. $10 thousand.

"This measure is related to the seizures that we have done this year--vehicles and properties where we have detected drug trade activity," said Colom.

The government intends to implement new controls using the new Law Against Money Laundering, which was passed by Congress in 2001, by decree 67-2001.

More than 560 companies have already signed on with the new controls on the sale of goods of high value. Some companies have been in compliance for years. For all cash transactions the buyer must fill out a form to explain the origin of money which is then investigated by SAT.

The president announced that the list of items whose sale will be controlled will be issued next Friday.

Colom explained that the Superintendency of Banks, through the Special Audit Office (IVE), is responsible for tracing the source of funds for purchases of property.

"Anyone who buys something of high value must explain the source of the funds," said Colom.

He also reiterated that those who rent property must hold formal contracts, to avoid being taken as accomplices to the drug traffickers.

José Javier Casas, general manager of Cofiño Stahl, said that for years "we no longer accept the purchase of vehicles with cash and we check with the Superintendency of Tax Administration (SAT). The practice of paying in cash has disappeared."

"We are trying to improve on the Colombian version of this law. Those whose properties are used to store weapons, ammunition, cocaine or opium, or activities that result in the death of children, you run the risk of the property being seized," he said.

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