Money Laundering in Ecuador: A Growing Concern for the International Community
Despite efforts to improve its anti-money laundering and counter-terrorism financing regulations, Ecuador remains on the Financial Action Task Force’s (FATF) list of uncooperative countries. The international agency has given Ecuador a deadline to pass new laws allowing for the freezing of assets linked to terrorism and money laundering.
FATF’s List of Uncooperative Countries
According to an FATF update released earlier this month, Ecuador is one of 13 countries worldwide deemed uncooperative in enforcing international standards against money laundering. The list also includes Syria and Pakistan, making it the only Latin American country included.
Ecuador’s Response
Ecuador’s Attorney General, Diego Garcia, confirmed that the country must pass new legislation before being removed from the list. However, President Rafael Correa has criticized the FATF’s categorization, labeling the agency “one of the many tools of neo-colonialism.”
The Problem of Money Laundering in Ecuador
Money laundering in Ecuador is a significant problem, with estimates suggesting that $3 billion - or four percent of the country’s GDP - was laundered in 2011. The adoption of the US dollar as official currency and strict bank secrecy laws have made it an attractive destination for international criminal organizations seeking to launder their proceeds.
Contributing Factors
- Loose restrictions on money transfers have contributed to the problem, making it easier for criminals to move funds without detection.
- The proliferation of international criminal organizations operating in Ecuador has been linked to the drug trade, with Colombian groups using the gold mining industry in northern Ecuador to disguise their illicit profits.
Warning from a DEA Head Agent
In a stark warning, a head agent of the Drug Enforcement Administration (DEA) once referred to Ecuador as the “United Nations” of organized crime. The country’s failure to address these issues has significant implications for its economy and national security, making it crucial that Ecuador takes immediate action to comply with international standards.
Conclusion
Ecuador must take immediate action to address money laundering and comply with international standards. The country’s failure to do so will continue to have significant implications for its economy and national security. It is essential that Ecuador passes new legislation allowing for the freezing of assets linked to terrorism and money laundering, in order to remove itself from the FATF’s list of uncooperative countries.