Nicaragua Fails to Comply with Anti-Money Laundering Regulations

Despite efforts to implement anti-money laundering (AML) regulations, Nicaragua has failed to meet several key requirements set by international standards.

Key Findings

• Nicaragua has yet to establish provisions for remittances under criteria 16.3 and 16.4 for the implementation of customer due diligence (CDD) measures in the context of criterion 10.2.c.
• The country’s supervisory authorities have not established thresholds for the adoption of CDD measures in case of occasional transactions.
• Nicaragua has not implemented provisions for financial institutions (FIs) to verify that a person purporting to act on behalf of a client is authorized to do so and identify and verify their identity, as required by criterion 10.4.
• FIs are not obligated to identify the beneficial owner and take reasonable steps to verify their identity using relevant information or data obtained through sources that allow them to be convinced of the identity of the beneficial owner, as required by criteria 10.5 and 10.10.

Areas for Improvement

• Establishing provisions for remittances under criteria 16.3 and 16.4
• Setting thresholds for the adoption of CDD measures in case of occasional transactions
• Implementing provisions for FIs to verify that a person purporting to act on behalf of a client is authorized to do so and identify and verify their identity
• Obligating FIs to identify the beneficial owner and take reasonable steps to verify their identity

Additional Concerns

• Nicaragua’s trust service providers, which include professional trustees, are bound to implement standard, simplified, and enhanced CDD measures, but there are still no specific provisions for compliance with this criterion.

Conclusion

Nicaragua’s AML regulations require significant improvements to meet international standards. The country must take concrete steps to address these shortcomings to prevent money laundering and terrorist financing.