Regulator visited 10 entities and detected deficiencies in all of them, in terms of preventing the entry of illicit money into the country.
The launch of investment funds and the establishment of commercial companies by foreign investors, who intend to obtain a permanent residence permit in Portugal, have gained new impetus as a response to the restrictions on the gold visa program and have allowed more business to be done. But the Securities and Exchange Commission (CMVM) considers that venture capital investment is being made without ensuring that all the rules are in place to prevent the entry of money of illicit origin into Portugal, particularly through real estate.
Making investments worth 500 thousand euros or more in venture capital entities is one way to obtain a gold visa in Portugal. And the CMVM decided to visit in person 10 venture capital entities, having detected in all of them flaws in the systems that should prevent the entry of dirty money in the country, says Expresso, noting that the companies concerned have different severity in the deficiencies and irregularities found.
What CMVM found when visiting venture capital entities
The market supervisor’s teams carried out what is called a thematic supervisory action, as it is directed at a specific sector, and related to the prevention of money laundering and the financing of terrorism (BCFT).
“The need to strengthen the internal control structures, including their effectiveness and autonomy, in identifying and mitigating the risks of BCFT, especially with regard to the accurate identification of customers and counterparties of higher risk and the origin of their income, especially in association with incentive programs for investment and residence in Portugal,” according to an official CMVM source, quoted by Expresso.
What venture capital entities must do now
This evidence does not mean, however, that illegal transactions have already taken place. “The CMVM has identified irregularities and weaknesses in the procedures for scrutinizing clients and analyzing transactions, which does not mean that there are materialized situations of BCFT, but rather failures at the level of diligence and care that should be adopted to prevent situations of BCFT,” clarifies the regulator.
According to the newspaper, the inspected entities, whose identity has not been revealed, now have a month to present to the regulator presided over by Gabriel Bernardino the so-called corrective measures at the level of:
- – changes in the structure and means allocated to the BCFT;
- – changes in procedures.
