International Cooperation Crucial in Combating Financial Crime in Chile
Chile faces a significant challenge in combating financial crime, with corruption being the most prevalent threat affecting the country. According to a recent report, money laundering, trade-based money laundering, and terrorism financing are also major concerns.
The Report’s Findings
A 300-page report provides a comprehensive overview of financial crimes in Latin America and the Caribbean, highlighting the complex and dynamic nature of financial crime threats in the region. The report notes that corruption is not only the most prevalent threat but also the largest source of illicit proceeds.
- Experts interviewed for the report identified corruption as the primary channel used to move illicit proceeds within Chile, followed by:
- Financial institutions
- Real estate
- Bulk-cash smuggling
- Trade-based money laundering
Challenges and Recommendations
The report notes that while many countries in the region have made improvements to their anti-money laundering and combating the financing of terrorism (AML/CFT) laws, implementation is often incomplete and political will varies. Chile’s efforts to combat financial crime were rated 2.47 out of 5 by experts, indicating that current efforts are insufficient.
The report makes several recommendations to improve AML/CFT efforts in Chile, including:
- Establishing courts that only address financial crime, staffed by prosecutors and judges trained in relevant subject matter
- Implementing longer-term staff exchange programs between Chile and the United States to ensure effective knowledge transfer and partnerships
International Cooperation
The report emphasizes the importance of international cooperation in combating financial crime. It highlights the role of donor technical assistance in facilitating efforts and notes that U.S. technical assistance programs must account for the fact that people who receive training will return to the same systemic challenges.
Methodology and Scope
The report’s findings are based on:
- 250 expert interviews
- National risk assessments
- Mutual evaluation reports by the Financial Action Task Force (FATF) and regional bodies
- Analysis of current interventions to combat financial crimes
GFI used various quantitative methodologies to estimate the scope of financial crimes, including applying a two-to-five percent “consensus range” for criminal proceeds.
Conclusion
The report is part of a larger project by GFI that analyzes financial crimes in Latin America and the Caribbean. Other reports focus on extortion, cryptocurrencies, financial fraud, and private investment funds. International cooperation is crucial in combating financial crime, and it is essential to address corruption as a primary channel for illicit proceeds in Chile.