The recent reform of the Special Law for the Prevention, Control and Sanction of Money Laundering, Terrorist Financing, and the Financing of the Proliferation of Weapons of Mass Destruction marks a turning point in El Salvador’s regulatory framework.

This new regulation restructures the roles of supervisory bodies, strengthens the risk-based approach (RBA), and establishes an administrative sanctions regime that promotes a more technical, preventive, and accountable compliance culture.

Among its main changes is the creation of the National System and the Inter-Institutional Committee (CIPLAFT)—made up of the Office of the Attorney General, the Financial Intelligence Unit (FIU), the Superintendency of the Financial System (SSF), the National Commission for Digital Assets (CNAD), the Supreme Court of Justice (SCJ), the Supreme Electoral Tribunal (TSE), and other supervisory bodies—tasked with coordinating national actions and policies for preventing and controlling money laundering and terrorist financing.

The reform also updates the catalog of obligated entities, formally recognizing digital-asset service providers (PSAD) and additionally incorporating electronic-money companies, cash-in-transit carriers, and political parties, prioritizing those obligated entities under formal supervision or regulation within the financial and non-financial systems. In this way, the coverage and effectiveness of the national prevention system are expanded, strengthening supervision and regulatory compliance in sectors with higher exposure to money-laundering and terrorist-financing risks.

Another key point is the inclusion of the financial inclusion principle, which seeks to avoid over-compliance and ensures that no person or sector is excluded from the financial system without an individual risk assessment. Unlike the previous framework—which contemplated only criminal sanctions—this law introduces an administrative sanctions system that establishes fines, disqualifications, and even the liquidation and dissolution of companies, as well as corrective measures for preventive non-compliance. This raises the responsibility of obligated entities and requires solid, documented, and up-to-date risk management.

The challenge now lies in effective implementation: the law sets a 90-day deadline for issuing the new Regulation, 6 months for publishing the Instruction, and 12 months for obligated entities to adapt their prevention and control systems in line with the guidelines issued by the supervisory authorities.

Ultimately, this reform represents a substantial step toward a more coherent, inclusive, and technologically prepared financial compliance system, consolidating El Salvador as a jurisdiction committed to international AML/CFT standards.