Ecuador’s Anti-Money Laundering Regulations Under Scrutiny: A Mixed Bag of Compliance

Ecuador’s anti-money laundering (AML) regulations have been evaluated by the Financial Action Task Force (FATF), which has found a mixed bag of compliance with international standards.

Progress Made

According to the report, Ecuador has made significant progress in implementing measures to:

• Assess risk and apply a risk-based approach (R.1)
• Confiscate and impose provisional measures on criminal assets (R.4)
• Target financial sanctions related to terrorism and proliferation (R.6 and R.7)

Areas for Improvement

However, Ecuador fell short in several areas, including:

• Laws regarding financial institution secrecy (R.9)
• Customer due diligence (R.10)
• Record-keeping (R.11)
• Reliance on third parties (R.17) and internal controls (R.18)

Additionally, Ecuador was found non-compliant with recommendations related to:

• Higher-risk countries (R.19)
• Reporting of suspicious transactions (R.20)

The country’s laws regarding transparency and beneficial ownership of legal persons and arrangements (R.24 and R.25) were also deemed partially compliant.

Recommendations for Improvement

The FATF report highlights areas where Ecuador needs to improve, including:

• Powers of supervisors (R.27)
• Regulation and supervision of DNFBPs (R.28)
• International cooperation in areas such as:
  • Mutual legal assistance (R.37)
  • Extradition (R.39)

Conclusion

Despite the challenges identified, Ecuador has made significant strides in implementing AML regulations and is working to strengthen its financial system. The country’s authorities must now focus on addressing the identified weaknesses to bring its laws and practices fully into line with international standards.