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Ecuador’s New Anti-Money Laundering Law Aims to Detect and Eradicate Criminal Activity
In July 2016, Ecuador’s National Assembly approved a new law aimed at detecting and eradicating money laundering. The Law on the Prevention and Eradication of Money Laundering is designed to crack down on this criminal activity and ensure that Ecuador’s financial system remains clean and transparent.
New Reporting Requirements
Under the new law, non-financial businesses and organizations will be required to report any suspicious financial transactions exceeding $10,000 within a four-day period. These entities include:
- Mail service providers
- Transportation companies for cash, valuables, and parcels
- Trust and fund administrators
- Cooperatives
- Foundations
- Non-governmental organizations
Additionally, individuals and businesses involved in transactions related to motor vehicles, ships, boats, and airplanes will also be required to comply with the reporting obligation for transactions exceeding $10,000.
Targeting Property Transactions
The law targets tracing property transfers, possession, use, and marketing of property, as well as internal or external trade in property and gratuitous or profitable asset transactions.
Penalties for Tax Fraud
The new law also introduces a provision that penalizes tax fraud committed through third parties. This is considered an important reform aimed at combating money laundering and terrorist financing.
Reform of the Financial Analysis Unit
The Financial Analysis Unit will be transformed into an autonomous body within the Coordinating Ministry of Economic Policy, changing its name to the Unit of Financial and Economic Analysis.
Objective of the New Law
According to the sponsor of the legislation, the aim of the new law is to detect money laundering in a more proactive manner. The law comes into effect immediately, providing a robust framework for combating money laundering and terrorist financing in the country.
By implementing this new law, Ecuador aims to maintain its financial system’s integrity and transparency, while also protecting its citizens from criminal activity.