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Nicaragua Makes Progress in Combating Money Laundering and Terrorist Financing

Managua, Nicaragua - The Nicaraguan government has made significant progress in adopting measures to prevent the misuse of non-profit organizations (NPOs) for money laundering, terrorist financing, and proliferation of weapons of mass destruction.

Implementing Regulations to Prevent Misuse of NPOs

According to a recent report by the country’s Financial Intelligence Unit (UAF), Nicaragua has implemented regulations that guarantee transparency and supervision of NPOs. The report highlights the adoption of the NPO Regulations, which establishes the duty of the DRCA to communicate suspicions of ML/TF/FP activities involving NPOs to competent authorities.

Areas for Improvement

While progress has been made, there are still areas for improvement. Specifically, the report recommends that Nicaragua incorporate lawyers and notaries as reporting institutions (RIs) to inform the UAF directly about suspicious transactions. This move would bring these professionals in line with other RIs, such as accountants, who already have similar obligations.

Customer Due Diligence (CDD) Procedures

The report highlights the importance of CDD procedures for all RIs, including lawyers and notaries. It notes that Nicaragua has made progress in implementing CDD measures for accountants and recommends that similar measures be implemented for lawyers and notaries.

Amendments to Law against Money Laundering, Terrorist Financing, and Proliferation of Weapons of Mass Destruction

In a related development, the Nicaraguan government has published a law amending and supplementing the Law against Money Laundering, Terrorist Financing, and Proliferation of Weapons of Mass Destruction. The law incorporates lawyers and notaries as RIs, requiring them to inform the UAF directly about suspicious transactions.

Recommendations

• Raise the rating of Nicaragua’s NPO sector from “Partially Compliant” to “Largely Compliant”.
• Incorporate lawyers and notaries as reporting institutions (RIs) to inform the UAF directly about suspicious transactions.
• Implement customer due diligence (CDD) procedures for all RIs, including lawyers and notaries.

Conclusion

Nicaragua’s efforts to prevent money laundering and terrorist financing are commendable, but there is still work to be done. The country must continue to strengthen its regulations and institutions to prevent these harmful activities. By implementing the recommendations outlined in this report, Nicaragua can further reduce the risk of ML/TF/FP and protect its financial system from abuse.