Financial Crime World

Chile’s Financial Crime Investigation Methods Face Scrutiny

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A recent evaluation by the Financial Action Task Force (FATF) has shed light on Chile’s methods for investigating financial crimes, revealing both strengths and weaknesses. The assessment, which rates countries’ compliance with anti-money laundering and combating the financing of terrorism (AML/CFT) standards, highlights areas where Chile needs to improve.

Strengths and Weaknesses

According to the report, Chile is “partially compliant” with 18 out of the 40 FATF Recommendations. These include requirements for:

  • Assessing risk
  • Applying a risk-based approach
  • Implementing targeted financial sanctions related to terrorism and terrorist financing

The country has also made significant progress in strengthening its national cooperation and coordination mechanisms.

Areas for Improvement

However, the report identifies several areas where Chile needs to improve, including:

  • Confiscation and provisional measures: Chile is “non-compliant” with recommendations related to these measures.
  • Regulation and supervision of DNFBPs (designated non-financial businesses and professions): Chile requires improvement in this area.
  • Reporting of suspicious transactions: The country also needs to enhance its reporting of suspicious transactions.
  • Powers of supervisors: Chile’s powers of supervisors need to be improved.

Additionally, Chile faces challenges in implementing effective internal controls and foreign branches and subsidiaries. It also needs to enhance its transparency and beneficial ownership requirements for legal persons and arrangements.

International Cooperation

The FATF report highlights the importance of international cooperation and mutual legal assistance in combating financial crimes. Chile is “largely compliant” with recommendations related to:

  • Mutual legal assistance, including freezing and confiscation, extradition, and other forms of international cooperation

Conclusion

While Chile has made significant progress in implementing AML/CFT measures, there are areas where it needs to improve to meet international standards. The country’s financial crime investigation methods will require continued strengthening to effectively combat the financing of terrorism, proliferation, and other illicit activities.