COSTA RICA Law and Practice Contributed by: Douglas Soto, Miguel Elizondo-Soto and Osvaldo Madrigal Méndez, Zurcher, Odio & Raven
the relevant remuneration and incentive require - ments. The board of directors is responsible for approv - ing the applicable remuneration conditions, and for defining and verifying that the scheme of remuneration and incentives encourages good performance and promotes acceptable risk man - agement criteria. In addition, the regulated entity must have a Remunerations Technical Commit - tee in place, which is responsible for monitoring the design and function of an adequate remu - nerations system. This Committee must be able to deliver a competent and independent set of recommendations about the policies and prac - tices of remuneration and incentives to manage risk, capital and liquidity. The approved remuneration policy must be revised periodically and monitored to ensure its correct application. The remuneration and incentives policy must be aligned with the entity’s strategies and business horizon or with the activity and level of risks, objectives, values and long-term interests, tak - ing into consideration measures to avoid con - flicts of interest. The board of directors must ensure that remu - neration covers current and potential risks taken by an employee, such as internal procedure vio - lations and regulatory and legal requirements. For staff members from units involving risk, com - pliance and other control units, incentives must be defined independent of any business line or substantial activity, and performance must be evaluated according to their own objectives. SUGEF supervises the application of remunera - tion policies as part of the Corporate Governance
Code that all supervised entities must implement internally. SUGEF periodically supervises the execution and results of the Corporate Govern - ance Code, and issues mandatory changes or adjustments that must be implemented by the supervised entity. Breaching the requirements could trigger inter - nal disciplinary actions by the company, and could eventually result in economic penalisation or fines being imposed by the regulator. Article 15 of the AML Act states that the follow - ing activities are subject to compliance with and supervision by SUGEF: • systematic or substantial money exchange and transfer operations, through instru - ments such as cheques, bank drafts, bills of exchange or similar; • systematic or substantial operations of the issuance, sale, redemption or transfer of trav - ellers’ cheques or money orders; • substantial systematic transfers of funds, car - ried out by any means; • the administration of trusts or any type of administration of resources carried out by individuals or legal entities who are not finan - cial intermediaries; and • money remittances from one country to another. 5. AML/KYC 5.1 AML and CFT Requirements If any business falls under any of the activi - ties described in Article 15 of the AML Act, the individual or entity must comply with the AML regulation, which includes the appointment of a compliance officer, implementing know-your- client (KYC) and know-your-employee (KYE)
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