Financial Crime World

Suriname Banking Sector Confronts Compliance Challenges

Suriname, a small South American nation, is facing significant challenges in its banking sector, with money laundering and terrorist financing posing major threats to its financial stability.

Lack of Regulations and Corruption

The country’s lack of regulations, weak institutions, and endemic corruption have created an environment conducive to money laundering. This has made it a paradise for criminals. Poor regulation and corruption are the largest financial crimes affecting Suriname, with an estimated $56 million to $139 million being laundered annually.

Banking Sector Weaknesses

The banking sector is a key weakness in efforts to combat money laundering, as banks are seen as unwilling to prioritize compliance over profit. This lack of technical knowledge and expertise risks Suriname being cut off from the rest of the world due to its poor banking practices, keeping the economy largely cash-based.

Other Industries at Risk

Other industries, including:

  • Lawyers
  • Notaries
  • Car dealers
  • Currency exchanges
  • Fintech
  • DNFBPS (Designated Non-Financial Businesses and Professions)
  • Jewelry industry

also present significant Anti-Money Laundering (AML) risks.

Porous Borders and Smuggling

Suriname’s porous borders with Brazil and Guyana make it easy for illegal gold and cocaine to be smuggled in and out of the country.

Lack of Regulation in Gold Exports

The country’s lack of regulation is evident in its handling of gold exports. In 2015, the government gave a private company, Kaloti Suriname Mint House (KSMH), sole authority to value and collect taxes on gold exports, despite being a front for a UAE money laundering operation worth billions.

Terrorist Financing Risks

Suriname also faces significant risks related to terrorist financing. Dino Bouterse, former head of the Anti-Terrorism Unit, was convicted in a US federal court of conspiring to import drugs and provide material support to Hezbollah.

National Risk Assessment

Despite these challenges, Suriname has completed a national risk assessment in 2021 with support from the US Embassy. However, the document is confidential, and there is little hope that the government will take action on it.

Conclusion

The banking sector must prioritize AML compliance to mitigate these risks and ensure the stability of Suriname’s financial system.