Uruguay Sees Near-Doubling of Money Laundering Cases Tied to Drug Trafficking

A Growing Concern in Uruguay

A new government report has revealed a significant increase in money laundering cases linked to drug trafficking in Uruguay, with nearly twice as many investigations launched between 2018 and 2022. The report highlights concerns that lax regulations and inadequate resources are allowing criminal organizations to exploit the financial system.

Statistics on Money Laundering Cases

• In 2018, there were 1,597 money laundering cases tied to drug trafficking in Uruguay.
• By 2022, this number had risen to 3,021, representing a consistent annual rise in investigations over the past five years.

Experts Warn of Inadequate Resources

Financial consultant Alejandro Aparicio Montesdeoca has noted that Uruguay has invested little in resources for fighting money laundering, making it an attractive destination for criminal organizations. This lack of investment has allowed financial crimes to thrive in the country.

Uruguay’s Role in International Money Laundering

• Recent investigations have highlighted Uruguay’s role in international money laundering, including a case involving Los Cuinis, who ran the finances of Jalisco Cartel New Generation (CJNG), and linked to massive international shipments of cocaine.
• Uruguayans have laundered millions in profits through the country’s financial system.

Lax Regulations and Inadequate Resources

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, making it difficult to effectively combat financial crimes.

Challenges in Fighting Money Laundering

• The 2020 law that raised the limit for cash payments from $4,000 to $100,000 has been criticized as a step backwards in the fight against money laundering.
• Critics argue that allowing large purchases helps laundering go unnoticed.

Signs of Change

Despite these challenges, there are signs of change in Uruguay’s approach to fighting money laundering. The country created a prosecutor’s office dedicated to money laundering in early 2023, and the legislative branch is discussing changing the 2020 law that raised the limit for cash payments. Experts believe that a shift in attitude towards recognizing the importance of the problem is necessary to combat financial crimes effectively.

Conclusion

Uruguay’s experience highlights the need for countries to invest resources in preventing and detecting financial crimes, as well as adopting effective laws and regulations to prevent money laundering. The country’s recent steps towards addressing the issue offer hope that it may be able to stem the tide of financial crime tied to drug trafficking.