Financial Crime World

Ecuador Takes Step Towards Eliminating Financial Crimes, Boosts International Business Confidence

Ecuador’s efforts to strengthen anti-money laundering (AML) regulations have put the country firmly on the path towards eliminating financial crimes and boosting international business confidence. The move is a significant step towards creating healthy commercial conditions that will attract more foreign investment.

The Reality of Money Laundering

Money laundering is a constant reality in monetary systems worldwide, and Ecuador is making a big push to eliminate it. Money-laundering involves making revenue from crimes such as drug and human trafficking, terrorist activities, and embezzlement. These behaviors can occur in business on large scales, which is why the legislation aims to reduce cases of corporate abuses of power and call out companies that demonstrate a lack of internal controls.

International Anti-Money Laundering Legislation

The need to prevent financial crimes applies to businesses in all industries and sizes. Strong internal processes are key to keeping your business safe from such risks and maintaining compliance with Ecuadorian law. There are several global associations dedicated to preventing money laundering, which Ecuador aligns itself with. One of the largest and most important is the Association of Certified Anti-Money Laundering Specialists (ACAMS).

Regulatory Body in Ecuador

The Financial and Economic Analysis Unit (UAFE) was created in 2005 in Ecuador, whose main function according to Article 11 of its current law is “the collection of information, reporting, execution of national prevention policies and strategies and eradication of the crime of money laundering and financing of crimes.” This institution establishes the criteria for identifying an “obligated subject,” which includes commercial entities that must submit reports about their internal financial procedures.

Complying with Local AML Regulations

To comply with local AML regulations, businesses in Ecuador must:

  • Appoint a Compliance Officer who is experienced and trained in the area of anti-money laundering
  • Prepare a compliance manual detailing the points established by the law issued by the UAFE
  • Prepare a monthly report of all transactions valued at over US$10,000
  • Present an annual report of the work done in relation to procedures for the prevention of laundering to the representatives or shareholders of your company.

Implementation of AML processes cannot occur without the direct participation of the company’s financial or accounting team. It is advisable to partner with trained personnel to perform the role of Compliance Officer and advise the team on correct practices and processes to follow in accordance with AML law.