Ecuador Passes New Anti-Money Laundering Law to Enhance Financial Transparency
New Law Aims to Prevent and Eradicate Money Laundering
On July 21, 2016, Ecuador’s legislature adopted a new law aimed at preventing and eradicating money laundering. The Law on Prevention and Eradication of Money Laundering is designed to enhance financial transparency by extending the obligation to report suspicious financial transactions to non-financial businesses and organizations.
Who Must Report Suspicious Transactions
The new law requires the following entities to report any transaction involving more than $10,000 within four days:
- Mail service providers
- Transportation companies
- Cooperatives
- Foundations
- Individuals conducting transactions in motor vehicles, ships, boats, and airplanes
Goals of the New Law
The goal of this law is to detect money laundering in a more proactive manner by tracing:
- Property transfers
- Internal or external trade in property
- Gratuitous or profitable transactions of assets
Significant Reforms
A significant reform included in the law is an added provision to the Integral Penal Code, which penalizes tax fraud committed through third parties. This amendment aims to combat tax evasion and financial crimes.
Unit of Financial and Economic Analysis
The Financial Analysis Unit, previously under the Attorney General’s office, will become an autonomous body within the Coordinating Ministry of Economic Policy and be renamed the Unit of Financial and Economic Analysis. This change is expected to enhance the unit’s independence and effectiveness in combating money laundering and other financial crimes.
Sponsor’s Statement
According to the sponsor of the legislation, the new law aims to prevent and eradicate money laundering by targeting key areas of the economy and increasing transparency in financial transactions. The law is seen as a crucial step towards strengthening Ecuador’s financial system and combating corruption.