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Ecuador Struggles to Implement Anti-Money Laundering and Counter-Terrorism Financing Regulations
A recent evaluation by the Financial Action Task Force (FATF) has revealed that Ecuador is still lacking in implementing key regulations to prevent financial crimes. The country received poor ratings across various aspects of its anti-money laundering and counter-terrorism financing framework.
Key Areas for Improvement
The FATF report highlighted several areas where Ecuador needs improvement:
- Establishment of a Comprehensive National Cooperation and Coordination Mechanism: Ecuador’s current laws on money laundering and terrorist financing offenses require revision to align with international standards.
- Financial Institutions Secrecy Laws: The country’s financial institutions secrecy laws were deemed inadequate, making it difficult to prevent financial crimes.
- Customer Due Diligence Requirements: Customer due diligence requirements in Ecuador were found to be insufficient, leaving room for potential money laundering and terrorist financing activities.
- Record-Keeping Practices: Ecuador’s record-keeping practices were criticized, as was its reliance on third-party providers.
Progress in Correspondent Banking and Wire Transfers
Although Ecuador has made some progress in implementing regulations related to correspondent banking and wire transfers, the country’s internal controls and foreign branches and subsidiaries were deemed inadequate. The FATF report recommended that Ecuador strengthen its powers of supervisors, improve its financial intelligence unit, and enhance international cooperation in areas such as mutual legal assistance and extradition.
Recommendations for Improvement
The FATF evaluation suggests that Ecuador has a long way to go in implementing effective anti-money laundering and counter-terrorism financing regulations. The country must take decisive action to address these weaknesses and ensure a more robust framework for preventing financial crimes.