Financial Crime World

Puerto Rico’s Efforts to Combat Money Laundering Yield Positive Results

Significant Milestone for Puerto Rico in Combating Money Laundering

In a major development, Puerto Rico has taken significant steps to curb illicit banking activity, leading to its removal from the high-risk list in the U.S. Department of the Treasury’s 2024 National Money Laundering Risk Assessment.

Strengthened Regulatory Framework

The efforts of the Puerto Rico Office of the Commissioner of Financial Institutions (OCIF) and the passage of two mandates aimed at strengthening the regulatory framework for International Banking Entities (IBEs) and International Financial Entities (IFE) have contributed to this achievement. The recent passage of Acts 44 and 45 of 2024 has improved the regulatory framework, making it more robust in combating money laundering.

Key Factors Contributing to Positive Outcome

  • Strengthening investigative unit: OCIF Commissioner Natalia Zequeira attributes the positive outcome to the agency’s focus on strengthening its investigative unit.
  • Supervising regulated entities: Regular supervision of financial institutions has helped identify and address potential risks.
  • Swift action against non-compliant institutions: Taking swift action against institutions that fail to comply with anti-money laundering regulations has also contributed to the positive outcome.

U.S. Treasury’s Support and Commitment

U.S. Treasury’s Under Secretary for Terrorism and Financial Intelligence, Brian Nelson, emphasized the importance of ongoing partnership and cooperation in combating illicit finance issues, including:

  • Countering illicit fentanyl and narcotics trafficking
  • Strengthening anti-money laundering regulations
  • Promoting awareness among the business community about beneficial ownership reporting requirements

Governor’s Gratitude and Commitment to Compliance

Puerto Rico Governor Pedro Pierluisi expressed gratitude for Nelson’s support and commitment to ensuring a banking system on the island that is always in compliance with current laws. The governor reiterated Puerto Rico’s determination to work together with federal authorities to eliminate potential risks of terrorism and money laundering, protecting both the nation and consumers.

Significance of Removal from High-Risk List

The removal of Puerto Rico from the high-risk list marks a significant milestone in the island’s efforts to combat money laundering. However, as Nelson noted, there is still more work to be done to address ongoing challenges.

Challenges Ahead

  • Processing transactions by IBEs and IFEs: Many U.S. banks have begun to minimize their exposure risks to these entities by closing their accounts.
  • Ongoing cooperation with federal authorities: Puerto Rico must continue to work closely with the U.S. Treasury to eliminate potential risks of terrorism and money laundering.

Puerto Rico’s Progress in Combating Money Laundering

The island’s progress comes on the heels of a visit from Andrea Gacki, Director of the Financial Crimes Enforcement Network (FinCEN), who hosted the first-ever FinCEN Exchange in Puerto Rico earlier this year. The passage of Acts 273 and 44-45 of 2024 also demonstrates the government’s commitment to strengthening regulations and improving transparency in the financial sector.

Conclusion

As Puerto Rico continues to work towards a stronger, more transparent financial system, it is clear that the island’s efforts are yielding positive results. With ongoing cooperation and commitment from all parties involved, Puerto Rico can continue to build on this progress and ensure a secure and compliant financial system for its citizens and the nation as a whole.