Financial Crimes on the Rise in Uruguay: Experts Warn of Lax Regulations and Lack of Resources

A new government report has revealed a significant increase in money laundering cases tied to drug trafficking in Uruguay, raising concerns about the country’s susceptibility to financial crimes.

Rise in Money Laundering Cases

According to statistics from the National Secretary Against Money Laundering and Terrorism Financing (SENACLAFT), investigations into money laundering connected to drug trafficking have nearly doubled over the past five years. Between 2018 and 2022, the number of cases increased from 1,597 to 3,021.

Lack of Resources for Preventing Financial Crimes

Experts warn that the lack of resources for preventing, detecting, and prosecuting financial crimes has created a “common denominator” that has opened the door to laundering drug trafficking profits through corporate structures and buying property. Uruguay’s Central Bank, along with several other state institutions, have been criticized for lax regulations, which allow large cash transactions to go unnoticed.

Criticisms of Lax Regulations

In 2020, the government passed a law increasing the limits on cash payments from $4,000 to $100,000 in an effort to increase financial freedom, but critics argue that this has actually helped money laundering. The lack of resources for investigating financial operations and strategies is also a major concern.

• “We have only 12 people investigating financial operations and strategies, plus some supervisors in a few sectors,” said Alejandro Aparicio Montesdeoca, a financial consultant who conducted an analysis of Uruguay’s anti-money laundering capabilities for SENACLAFT.
• “In the rest of the region, there are at least 50, 60, 70 people.”

High-Risk Areas and International Connections

Experts warn that Uruguay’s lack of resources and expertise has created a breeding ground for money laundering, particularly in the country’s beach town of Punta del Este, which was connected to laundering by Los Cuinis, a Mexican cartel. Uruguayan nationals have also been linked to massive international shipments of cocaine and laundered millions through the country’s financial system.

Government Efforts to Address the Issue

The government has taken steps to address the issue, including creating a prosecutor’s office dedicated to money laundering in early 2023. The legislative branch is now discussing changing the 2020 law that raised the limit for cash payments, but experts say more needs to be done to tackle the problem.

• “There needs to be a change in how the problem is viewed,” said Montesdeoca. “You need to assume it is an important problem and adopt methods beyond just laws and regulations.”