Financial Crime World

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Financial Crime Prevention Methods in Costa Rica: A Critical Discussion

Costa Rica recently hosted the “World Compliance Forum” under the slogan “The Era of Digital Compliance”, bringing together over 300 compliance professionals from Latin America to tackle the growing threat of financial crimes, including money laundering, corruption, and cyberattacks.

The Event’s Success

According to José Quesada, President of the Foundation for the Study of Money Laundering (FELADE), the event was a success, with participants praising the level of engagement and data presented. “We are facing a reality where new and innovative forms of financial crimes have a place in the region, hence the importance of having professionals trained and specialized in the subject,” he said.

Challenges Faced by Costa Rica

The forum highlighted the challenges faced by Costa Rica, including:

  • The need to supervise newly obligated subjects
  • Compliance with international standards to prevent money laundering and terrorist financing
  • Due diligence, knowing clients, and reporting suspicious transactions

Román Chavarría, Head of the Financial Intelligence Unit of the Costa Rican Institute on Drugs (ICD), emphasized the importance of these measures.

Global Figures

The discussion also touched on global figures, revealing that:

  • Illicit trade is a major source of criminal finance, worth $520 billion annually
  • 80% of organizations dedicated to laundering are “fronts”, disguised as legal
  • 60% of money laundering organizations use corruption
  • 7 out of 10 are made up of different nationalities

Experts’ Recommendations

Experts emphasized the importance of:

  • Asset forfeiture and public-private cooperation in dismantling criminal organizations
  • International cooperation and education to build resilience against criminal finance

According to Europol and OECD figures, $3.4 trillion is laundered globally each year.

Costa Rica’s Efforts

In Costa Rica, the Financial Intelligence Unit reported 718 suspicious activities in 2022, worth more than ¢222 billion. Of these, 290 reports were sent to the Public Ministry for further investigation.

Regional Challenges

The event also addressed regional challenges, including:

  • The high level of violence and digital illicit activities accelerated during the COVID-19 pandemic
  • The need for international cooperation and education to build resilience against criminal finance

Celina Realuyo, an expert in The Global Initiative Against Transnational Organized Crime, highlighted the Biden Administration’s five-pillar policy to combat corruption and work with Latin American countries:

  1. Modernizing efforts
  2. Stopping illicit finances
  3. Holding corrupt actors accountable
  4. Strengthening multilateral architecture
  5. Enhancing diplomatic engagement

Conclusion

As the world grapples with the threat of financial crimes, Costa Rica’s compliance professionals are working tirelessly to prevent money laundering and corruption. The “World Compliance Forum” served as a platform for knowledge-sharing and collaboration, reinforcing the importance of international cooperation in this critical fight.