Financial Crime Prevention Unit Sparks Controversy in Nicaragua

The recent appointment of Major General Denis Membreño Rivas, head of the army’s inspector general and intelligence agency, to lead Nicaragua’s new Financial Analysis Unit (UAF) has raised concerns among critics who argue that the fight against organized crime is being politicized.

Background

The UAF was created by law in June with the mission of preventing the laundering of profits from crime or terrorism. President Daniel Ortega named Membreño to head the unit, which will have the power to demand information on “suspicious transactions” involving $10,000 or more.

Concerns over Leadership

Critics argue that Membreño lacks experience in finance and that his political affiliation with the ruling FSLN party could lead to abuse of power. Business association Cosep head Jose Adan Aguerri has expressed concern over the lack of expertise among the unit’s leaders, while opposition parties have warned that the UAF could be used as a “political weapon” by the Ortega government.

Need for Independent Unit

Despite these concerns, the establishment of the UAF is seen as a necessary step in complementing Nicaragua’s interdiction efforts. A recent InSight Crime investigation revealed that criminal networks have set up shop in the North Atlantic Autonomous Region (RAAN) and neighboring South Atlantic Autonomous Region (RAAS), driving up murder rates and substituting for the state in some areas.

The Challenge of Disentangling Politics from Crime

The controversy surrounding the appointment of Membreño highlights the challenges faced by Nicaragua in disentangling the fight against organized crime from politics. As InSight Crime has previously reported, the country’s criminal networks are deeply entrenched and require a sustained effort to dismantle them.

The Road Ahead

The creation of the UAF is seen as a necessary step towards achieving this goal, but its effectiveness will depend on the unit’s ability to operate independently and transparently. To succeed, the UAF must be able to gather and analyze financial information effectively, while also avoiding political interference.

Key Points

• The UAF was created by law in June with the mission of preventing money laundering and terrorist financing.
• Major General Denis Membreño Rivas has been appointed head of the unit despite lacking experience in finance.
• Critics argue that the unit’s leaders are not specialists in finance and that their political affiliation could lead to abuse of power.
• The UAF will have the power to demand information on “suspicious transactions” involving $10,000 or more.