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Risk-Based Approach to Anti-Money Laundering in El Salvador Under Scrutiny
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El Salvador has been at the forefront of international efforts to combat money laundering and terrorism financing, having recently become a member of the Caribbean Financial Action Task Force (CFATF). As part of its membership, the country is subject to regular assessments on its implementation of anti-money laundering and counter-terrorist financing (AML/CFT) measures.
Progress in Implementing AML/CFT Measures
A recent evaluation report published on the CFATF website sheds light on El Salvador’s progress in this area. The report highlights the government’s commitment to a risk-based approach, which involves identifying and mitigating high-risk activities and individuals that may be vulnerable to money laundering and terrorism financing.
Key Areas of Improvement
- Enhanced customer due diligence requirements for financial institutions
- Increased cooperation between law enforcement agencies and regulatory bodies
- Ongoing efforts to strengthen its anti-money laundering regime
Strengths in AML/CFT Framework
The report notes several areas where El Salvador has made significant strides in strengthening its AML/CFT framework, including:
Enhanced Customer Due Diligence Requirements
Financial institutions are now required to conduct thorough customer due diligence, which includes verifying the identity of customers and monitoring their transactions for suspicious activity.
Increased Cooperation between Law Enforcement Agencies and Regulatory Bodies
Law enforcement agencies and regulatory bodies have increased cooperation in sharing information and coordinating efforts to combat money laundering and terrorism financing.
Ongoing Efforts to Strengthen AML/CFT Measures
El Salvador is expected to continue implementing recommendations from the CFATF evaluation report, with a focus on risk-based approaches and international cooperation. The country is poised to make significant progress in combating money laundering and terrorism financing.