This document is a mutual evaluation report on Portugal's anti-money laundering and counter-terrorist financing system from December 2017. It provides ratings on Portugal's level of effectiveness and technical compliance, key findings, and priority actions. Some of Portugal's strengths identified include understanding of ML/TF risks, international cooperation, and prosecuting money laundering cases. Areas for improvement include assessing risks associated with non-profit organizations and legal entities, resourcing the FIU to analyze suspicious transactions, and supervising higher-risk DNFBP sectors.

1. Anti-money laundering and counter-terrorist financing measures in Portugal – Mutual Evaluation Report – December 2017 1
Anti-money laundering and counter-
terrorist financing (AML/CFT)
measures in Portugal
Fourth Round Mutual Evaluation
Key findings, ratings and priority actions
December 2017
www.fatf-gafi.org/publications/mutualevaluations/documents/mer-portugal-2017.html

2. Anti-money laundering and counter-terrorist financing measures in Portugal – Mutual Evaluation Report – December 2017
Ratings – Effectiveness (1/3)
2
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Portugal has
achieved this
objective
1. ML and TF risks are understood and, where appropriate,
actions co-ordinated domestically to combat ML and TF
Substantial
2. International co-operation delivers appropriate information,
financial intelligence, and evidence, and facilitates action
against criminals and their assets
Substantial
3. Supervisors appropriately supervise, monitor and regulate
financial institutions and designated non-financial
businesses and professions (DNFBPs) for compliance with
AML/CFT requirements commensurate with their risks.
Moderate
4. Financial institutions and DNFBPs adequately apply AML/CFT
preventive measures commensurate with their risks, and
report suspicious transactions.
Moderate

3. Anti-money laundering and counter-terrorist financing measures in Portugal – Mutual Evaluation Report – December 2017 3
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Portugal has
achieved this
objective
5. Legal persons and arrangements are prevented from misuse
for money laundering or terrorist financing, and information
on their beneficial ownership is available to competent
authorities without impediments
Moderate
6. Financial intelligence and all other relevant information are
appropriately used by competent authorities for money
laundering and terrorist financing investigations.
Moderate
7. Money laundering offences and activities are investigated
and offenders are prosecuted and subject to effective,
proportionate and dissuasive sanctions
Substantial
8. Proceeds and instrumentalities of crime are confiscated. Moderate
Ratings – Effectiveness (2/3)

4. Anti-money laundering and counter-terrorist financing measures in Portugal – Mutual Evaluation Report – December 2017 4
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Portugal has
achieved this
objective
9. Terrorist financing offences and activities are investigated
and persons who finance terrorism are prosecuted and
subject to effective, proportionate and dissuasive sanctions.
Substantial
10. Terrorists, terrorist organisations and terrorist financiers are
prevented from raising, moving and using funds, and from
abusing the non-profit sector.
Substantial
11. Persons and entities involved in the proliferation of weapons
of mass destruction are prevented from raising, moving and
using funds, consistent with the relevant United Nations
Security Council Resolutions.
Substantial
Ratings – Effectiveness (3/3)

5. Anti-money laundering and counter-terrorist financing measures in Portugal – Mutual Evaluation Report – December 2017 5
Ratings – Effectiveness
December
2017
0
6
5
0
High
Substantial
Moderate
Low

6. 11-Dec-17
6
Ratings – technical compliance
(1/5)
AML/CFT POLICIES AND COORDINATION
1. Assessing risks & applying a risk-based approach LargeLarLarLar Largely compliant
2. National cooperation and coordination LargeLarLarLar Largely compliant
MONEY LAUNDERING AND CONFISCATION
3. Money laundering offence LargeLarLarLar Largely compliant
4. Confiscation and provisional measures CompCoCoCo Compliant
TERRORIST FINANCING AND FINANCING OF PROLIFERATION
5. Terrorist financing offence LargeLarLarLar Largely compliant
6. Targeted financial sanctions related to terrorism & terrorist
financing CompCoCoCo Compliant
7. Targeted financial sanctions related to proliferation CompCoCoCo Compliant
8. Non-profit organisations PartiParPa Pa Partially compliant

7. 11-Dec-17
7
Ratings – technical compliance
(2/5)
PREVENTIVE MEASURES
9. Financial institution secrecy laws LargeLarLarLar Largely compliant
Customer due diligence and record keeping
10. Customer due diligence LargeLarLarLar Largely compliant
11. Record keeping CompCoCoCo Compliant
Additional measures for specific customers and activities
12. Politically exposed persons LargeLarLarLar Largely compliant
13. Correspondent banking PartiParPa Pa Partially compliant
14. Money or value transfer services CompCoCoCo Compliant
15. New technologies LargeLarLarLar Largely compliant
16. Wire transfers PartiParPa Pa Partially compliant

8. 11-Dec-17
8
Ratings – technical compliance
(3/5)
PREVENTIVE MEASURES (continued)
Reliance, Controls and Financial Groups
17. Reliance on third parties LargeLarLarLar Largely compliant
18. Internal controls and foreign branches and subsidiaries LargeLarLarLar Largely compliant
19. Higher-risk countries LargeLarLarLar Largely compliant
Reporting of suspicious transactions
20. Reporting of suspicious transactions LargeLarLarLar Largely compliant
21. Tipping-off and confidentiality CompCoCoCo Compliant
Designated non-financial Businesses and Professions (DNFBPs)
22. DNFBPs: Customer due diligence PartiParPa Pa Partially compliant
23. DNFBPs: Other measures LargeLarLarLar Largely compliant

9. 11-Dec-17
9
Ratings – technical compliance
(4/5)
TRANSPARENCY AND BENEFICIAL OWNERSHIP OF LEGAL
PERSONS AND ARRANGEMENTS
24. Transparency and beneficial ownership of legal persons PartiPa Pa Pa Partially compliant
25. Transparency and beneficial ownership of legal PartiPa Pa Pa Partially compliant
POWERS AND RESPONSIBILITIES OF COMPETENT
AUTHORITIES AND OTHER INSTITUTIONAL MEASURES
Regulation and Supervision
26. Regulation and supervision of financial institutions LargeLarLarLar Largely compliant
27. Powers of supervisors CompCoCoCo Compliant
28. Regulation and supervision of DNFBPs LargeLarLarLar Largely compliant
Operational and Law Enforcement
29. Financial intelligence units LargeLarLarLar Largely compliant
30. Responsibilities of law enforcement and investigative
authorities CompCoCoCo Compliant
31. Powers of law enforcement and investigative authorities CompCoCoCo Compliant
32. Cash couriers LargeLarLarLar Largely compliant

10. 11-Dec-17
10
Ratings – technical compliance
(5/5)
POWERS AND RESPONSIBILITIES OF COMPETENT
AUTHORITIES AND OTHER INSTITUTIONAL MEASURES
General Requirements
33. Statistics LargeLarLarLar Largely compliant
34. Guidance and feedback LargeLarLarLar Largely compliant
Sanctions
35. Sanctions LargeLarLarLar Largely compliant
INTERNATIONAL COOPERATION
36. International instruments CompCoCoCo Compliant
37. Mutual legal assistance LargeLarLarLar Largely compliant
38. Mutual legal assistance: freezing and confiscation CompCoCoCo Compliant
39. Extradition CompCoCoCo Compliant
40. Other forms of international cooperation LargeLarLarLar Largely compliant

11. Anti-money laundering and counter-terrorist financing measures in Portugal – Mutual Evaluation Report – December 2017 11
Ratings – technical compliance
12
22
6
0
Compliant
Largely compliant
Partially compliant
Non compliant

12. Anti-money laundering and counter-terrorist financing measures in Portugal – Mutual Evaluation Report – December 2017
Key findings
 Overall, there is a fair level of understanding of the money
laundering/terrorist financing (ML/TF) risks in Portugal, especially by
law enforcement authorities and financial supervisors. However, there
is a mixed level of understanding amongst DNFBP supervisors.
 The National Risk Assessment (NRA) was based on public and private
participation and provides an overview of the nature and level of
ML/TF risks in Portugal. The methodology can still be improved and a
review of specific sectors still needs to be conducted in order to have a
comprehensive overview of ML/TF risks in the country, in particular, in
respect to TF risks associated with Non-Profit Organisations (NPO).
 Financial intelligence, primarily based on suspicious transaction
reports (STRs), is collected, used and disseminated amongst
authorities for AML/CFT purposes. Operational authorities have direct
or indirect access to comprehensive databases held by relevant
agencies in order to facilitate the circulation and use of information for
ML/TF investigations.
December
2017 12

13. Anti-money laundering and counter-terrorist financing measures in Portugal – Mutual Evaluation Report – December 2017
Key findings
 Assessors have concerns regarding the resource implications of
the dual system of reporting suspicious transactions to both the
FIU and the Public Prosecution office (DCIAP), and about the
FIU’s capacities to adequately process and analyse the increasing
number of STRs received. In addition, the FIU does not have
relevant resources to produce strategic analysis.
 Authorities show a high degree of commitment and capacity to
investigate and prosecute ML cases, including complex cases,
consistent with the main ML risks in the country. Criminal
sanctions applied are proportionate and dissuasive.
 Portugal has had good results in freezing assets at the early stage
of ML investigations to prevent the flight and dissipation of
assets. This practice, combined with the use of the “enlarged
confiscation” regime, demonstrates the prosecution’s priority to
make crime unprofitable for criminals.
13December
2017

14. Anti-money laundering and counter-terrorist financing measures in Portugal – Mutual Evaluation Report – December 2017
Key findings
 TF is pursued as a distinct criminal activity, and parallel financial investigations
are conducted to support counter-terrorism investigations. TF assets and
instrumentalities related to TF activities are seized and confiscated. TF
prosecutions have been initiated, but there have been no TF convictions in
Portugal to date.
 Designations at the UN level apply directly in Portugal without the need for EU
transposition. Processes and procedures are in place to fully implement TFS in
relation to TF and PF, and authorities demonstrated a high degree of
competency in coordinating CFT and CPF activities.
 Portuguese authorities have been active in investigating and disrupting
potential PF cases and cooperate well with authorities of other jurisdictions.
 In the financial sector, the application of proportionate mitigation measures by
financial institutions (FIs) is satisfactory. Progress still needs to be made
regarding the understanding of the beneficial ownership (BO) requirements.
The application of risk-based supervisory models is ongoing, with Banco de
Portugal being the most advanced in this regard.
December
2017 14

15. Anti-money laundering and counter-terrorist financing measures in Portugal – Mutual Evaluation Report – December 2017
Key findings
 Regarding DNFBPs, the understanding of ML/TF risks in the sector as a whole is
moderate, including by sectors at higher risk of ML/TF. Supervisors conduct
limited AML/CFT supervisory activities, which primarily follow a rule-based
approach. Measures to prevent and detect unauthorised activities are applied
in sectors where informal activities are a major issue.
 There is generally a good level of transparency of basic information on legal
persons and arrangements, including foreign trusts established in the Madeira
Free Trade Zone (FTZ). Sanctions applicable to non-compliance with
transparency obligations are not dissuasive. Information on beneficial
ownership is mainly available from FIs, but the lack of understanding of the
requirements by some FIs creates some concerns about the reliability of this
information.
 International co-operation between Portuguese authorities and foreign
counterparts is proactive and collaborative, and provided upon request and
spontaneously, with priority given to terrorism and TF-related requests.
Mutual Legal Assistance (MLA) and extradition are mainly used as
complementary tools, in addition to more informal co-operation channels.
December
2017 15

16. Anti-money laundering and counter-terrorist financing measures in Portugal – Mutual Evaluation Report – December 2017
Priority Actions for Portugal to
strengthen its AML/CFT System
 Define a comprehensive AML/CFT programme of action to
fully address ML/TF risks identified, with priorities,
timelines and a specific focus on higher risk sectors and
scenarios explicitly covered.
 Conduct a comprehensive assessment of the ML/TF risks
associated with NPOs and legal persons and arrangements,
and implement proportionate actions to address these
risks.
 Provide adequate technical and human resources to the FIU
so that it can effectively fulfil its core responsibility of
managing and assessing STRs filed, and develop strategic
analysis on an ongoing basis.
16December
2017

17. Anti-money laundering and counter-terrorist financing measures in Portugal – Mutual Evaluation Report – December 2017
Priority Actions for Portugal to
strengthen its AML/CFT System
 Conduct awareness-raising and educational outreach on
ML/TF risks, AML/CFT preventive requirements and STR
obligations for DNFBP sectors, especially those at higher
risks of ML/TF abuse.
 Allocate resources to DNFBP supervisors in charge of higher
risk sectors commensurate to the ML/TF exposure and size
of the supervised sector.
 Ensure early introduction of the central register of
beneficial ownership currently being set up.
 Develop and maintain adequate and comprehensive ML/TF-
related statistics in order to better support and document
Portugal’s understanding and analysis of risks, and improve
how Portugal demonstrates its actions taken and results
achieved.
17December
2017