Financial Crime World

Costa Rica Cracks Down on Money Laundering Techniques with New Bill

Costa Rica’s Legislative Assembly has approved a bill aimed at combating money laundering and terrorist financing by requiring certain professionals to report suspicious transactions made by their clients.

New Law Targets Specific Professions

The new law targets lawyers, notaries, accountants, real estate agents, casinos, non-profit organizations, and others who engage in non-financial activities. These professionals will be obligated to:

  • Maintain “know your client” policies
  • Register with the Superintendency of Financial Entities (Sugef)
  • Report any suspected money laundering or terrorist financing activities to the National Council for the Supervision of the Financial System (Conassif)

Preventing Inclusion in Grey List

The bill aims to prevent Costa Rica from being included in a grey list of non-cooperative countries, which currently includes:

  • Afghanistan
  • Bosnia and Herzegovina
  • Ethiopia
  • Iraq
  • Laos
  • Syria
  • Uganda
  • Vanuatu
  • Yemen

Specific Requirements

The law obliges professionals to report:

  • Systematic or substantial operations of exchange of money and transfers
  • Substantial systematic transfers of funds by any means
  • Activities such as:
    • Administration of trusts
    • Remittances of money from one country to another
    • Credit card transactions

Passage Expected to Impact Money Laundering Efforts

The bill still needs to be approved in second reading before it can become law. However, its passage is expected to significantly impact Costa Rica’s efforts to combat money laundering and terrorist financing.

In related news, a recent case involving the founder of Liberty Reserve, Arthur Budovsky, who was sentenced to 20 years in prison for laundering hundreds of millions of dollars through his digital currency business, highlighted Costa Rica’s vulnerability to money laundering.