Financial Crime World

Ecuador’s Efforts to Combat Financing of Terrorism Receive Mixed Reviews in Latest FATF Evaluation

Introduction

The Financial Action Task Force (FATF) has released its latest evaluation of Ecuador’s efforts to combat the financing of terrorism (CFT), highlighting both strengths and weaknesses in the country’s measures.

Progress Made

According to the report, Ecuador has made significant progress in implementing key technical requirements, including:

  • Assessing risk and applying a risk-based approach to combating CFT
  • Developing national cooperation and coordination mechanisms
  • Targeting terrorist financing through financial sanctions

Ecuador also received praise for its efforts to strengthen its anti-money laundering (AML) regime, including:

  • Increasing transparency and beneficial ownership of legal persons and arrangements
  • Regulating and supervising financial institutions effectively
  • Granting powers to supervisors

Areas for Improvement

However, the evaluation identified areas where Ecuador falls short of FATF standards, including:

  • Partial compliance in implementing measures to combat proliferation finance
  • Inadequate record-keeping practices
  • Laws and regulations deemed insufficient in certain areas, such as:
    • Financial institution secrecy
    • Customer due diligence
  • Reliance on third-party service providers for certain financial services, which is seen as a potential vulnerability

Roadmap for Improvement

The FATF evaluation provides a roadmap for Ecuador to address outstanding issues and bring itself into full compliance with international standards on CFT. The report highlights areas where the country needs to improve and provides recommendations for strengthening its AML regime.

Government Commitment

Ecuador’s government has expressed commitment to implementing the recommendations outlined in the report, which will help enhance the country’s ability to detect and prevent terrorist financing activities.

Overall, while Ecuador has made progress in combating CFT, there are areas where it needs to improve. The FATF evaluation provides a clear roadmap for the country to strengthen its financial sector and enhance its global reputation.