Financial Crime World

Uruguay’s Financial Crime Fine and Penalty System Under Scrutiny as Money Laundering Cases Rise

Rising Trend of Money Laundering in Uruguay

A recent government report has shed light on a growing trend of money laundering cases tied to drug trafficking in Uruguay, highlighting concerns that lax regulations and limited enforcement resources are allowing criminal organizations to take advantage of the system.

Statistics Reveal Alarming Increase in Money Laundering Investigations

  • Investigations into money laundering connected to drug trafficking nearly doubled from 1,597 in 2018 to 3,021 in 2022.
  • The report draws on data from several state institutions, including the Central Bank of Uruguay.

Experts Warn of Lack of Investment in Preventing and Prosecuting Financial Crimes

Financial consultant Alejandro Aparicio Montesdeoca has warned that Uruguay’s susceptibility to financial crimes stems from a lack of investment in preventing, detecting, and prosecuting these crimes. He described this lack of resources as the “common denominator” that has opened the door to laundering drug trafficking profits through corporate structures and buying property.

International Money Laundering Cases Linked to Uruguay

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). Uruguayans linked to massive international shipments of cocaine, such as Gastón Murialdo and Martín Mutio, also laundered millions in profits through Uruguay’s financial system.

Critics View 2020 Law as Step Backwards in Fight Against Money Laundering

Despite rising suspicious financial operations, the Uruguayan government passed a law in 2020 that increased the limits on cash payments from $4,000 to $100,000. Critics view this law as a step backwards in the fight against money laundering, saying it allows large purchases without scrutiny.

Lack of Resources for Detecting and Prosecuting Financial Crimes

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

Example of Change: Paraguay’s Investment in Money Laundering Investigations

Montesdeoca pointed to Paraguay as an example, where significant resources were invested towards investigating money laundering following an investigation by the Latin America Anti-Money Laundering Group (GAFILAT). In the years since, Paraguay has seen a major increase in seizures and convictions related to the crime.

Uruguay’s Response: Creation of Prosecutor’s Office and Potential Change in Legislation

Uruguay is not widely associated with criminal activity, which Centurión said means there are fewer controls against Latin American and international organized crime groups that keep advancing. By neglecting investigations into money laundering, Uruguay is likely under-detecting the crime, reinforcing the notion that it is not a major issue.

  • In addition to SENACLAFT funding Montesdeoca’s evaluation, the country created a prosecutor’s office dedicated to money laundering in early 2023.
  • Now, Uruguay’s legislative branch is discussing changing the 2020 law that raised the limit for cash payments.