Financial Crime World

Money Laundering Concerns Rise as Cases Double in Uruguay

Uruguay is facing a surge in money laundering cases tied to drug trafficking, with nearly double the number of investigations over the past five years. The country’s lax regulations and lack of resources have made it an attractive target for financial crimes.

Lack of Investment in Preventing Financial Crimes

Experts warn that Uruguay’s susceptibility to financial crimes has been exacerbated by a lack of investment in preventing, detecting, and prosecuting financial crimes. According to Alejandro Aparicio Montesdeoca, a financial consultant, Uruguay has invested little in addressing money laundering, allowing criminal organizations to take advantage of the situation.

Report Highlights Need for Increased Resources and Expertise

A recent report from the National Secretary Against Money Laundering and Terrorism Financing (SENACLAFT) focused on five areas: financial intelligence, international cooperation, preventative systems and national cooperation, and investigations and convictions. The report highlighted the need for increased resources and expertise to combat money laundering.

Uruguay’s Role in International Money Laundering

Uruguay’s role in international money laundering is most clearly seen in the beach town of Punta del Este, which was connected to laundering by Los Cuinis, who ran the finances of Jalisco Cartel New Generation (CJNG). The country has also been linked to massive international shipments of cocaine, with Uruguayans laundering millions in profits through the financial system.

Critics Argue 2020 Law Has Hindered Efforts

Critics argue that a 2020 law increasing cash payment limits from $4,000 to $100,000 has hindered efforts to combat money laundering. This allows large purchases to go unnoticed and provides an opportunity for laundering to occur.

Lack of Resources and Expertise

Uruguay’s lax regulations are compounded by a lack of resources for detecting and prosecuting financial crimes. A recent government analysis found that the country has far fewer personnel focused on money laundering than its neighbors.

Paraguay’s Success Story

Change is possible, however, as seen in Paraguay which invested significant resources towards investigating money laundering following an investigation by GAFILAT. In the years since, Paraguay has seen a major increase in seizures and convictions related to the crime.

Uruguay’s Path Forward

Experts warn that Uruguay needs to change its approach to addressing money laundering, adopting methods beyond just laws and regulations. The country has taken its first steps, creating a prosecutor’s office dedicated to money laundering in early 2023, and now discussing changing the 2020 law that raised cash payment limits.

Key Statistics:

  • 3,021 cases of money laundering reported in 2022
  • 1,597 cases of money laundering reported in 2018 (nearly double)
  • Uruguay has invested little in addressing money laundering
  • Country has far fewer personnel focused on money laundering than its neighbors