Ecuador Makes Progress in Combating Terrorist Financing, but Remains Vulnerable to Money Laundering and Other Financial Crimes

QUITO, ECUADOR - In a recent assessment, Ecuador has been found to be partially compliant with the Financial Action Task Force (FATF) Recommendations on combating terrorist financing and money laundering. While the country has made significant strides in implementing anti-money laundering measures, it still faces challenges in addressing the threat of terrorist financing.

Progress Made

Ecuador is largely compliant with several key recommendations, including:

• National cooperation and coordination
• Confiscation and provisional measures
• Targeted financial sanctions
• Financial institution secrecy laws

The country has also made progress in strengthening its financial intelligence unit and improving international cooperation on anti-money laundering efforts.

Challenges Remaining

However, Ecuador remains non-compliant with several important recommendations, including:

• Non-profit organizations
• Beneficial ownership of legal persons and arrangements
• Regulation and supervision of DNFBPs (designated non-financial businesses and professions)

The country also faces challenges in addressing the risk of terrorist financing through its correspondent banking relationships and money or value transfer services.

Vulnerabilities

Ecuador’s efforts to prevent terrorist financing are hampered by:

• Lack of effective regulations and oversight, particularly with respect to DNFBPs
• Inadequate customer due diligence and record-keeping practices at financial institutions

These vulnerabilities leave Ecuadorian financial institutions vulnerable to money laundering.

Commitment to Improvement

The Ecuadorian government has pledged to strengthen its anti-money laundering regime and improve international cooperation on terrorist financing prevention. The country has committed to implementing additional measures to:

• Regulate DNFBPs
• Improve beneficial ownership transparency
• Enhance the capabilities of its financial intelligence unit

Ecuador has also agreed to increase coordination between law enforcement agencies and regulatory bodies to combat money laundering and terrorist financing.

Future Steps

In addition, Ecuador has committed to providing training and capacity-building programs for financial institutions and DNFBPs to help them identify and report suspicious transactions.

While Ecuador still faces significant challenges in preventing terrorist financing and money laundering, the country’s commitment to implementing additional measures is a positive step forward. By strengthening its anti-money laundering regime and improving international cooperation, Ecuador can better protect itself from the threat of terrorist financing and other financial crimes.