Financial Crime World

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Nicaragua’s AML/CFT Regulations Under Scrutiny

In its latest report, Nicaragua has received a mixed assessment from the Financial Action Task Force (FATF) on its anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations. The country was found to be largely compliant in several areas, but partially or non-compliant in others.

Compliance Status

According to the report, Nicaragua is considered “largely compliant” in nine out of 40 recommendations made by the FATF:

  • Assessing risk and applying a risk-based approach (R.1)
  • National cooperation and coordination (R.2)
  • Money laundering offence (R.3)
  • Confiscation and provisional measures (R.4)
  • Terrorist financing offence (R.5)
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
  • Targeted financial sanctions related to proliferation (R.7)
  • Non-profit organisations (R.8)
  • Customer due diligence (R.10)

Areas of Concern

However, Nicaragua was found to be “partially compliant” in several areas:

  • Confiscation and provisional measures (R.4)
  • Terrorist financing offence (R.5)
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
  • New technologies (R.15)
  • Wire transfers (R.16)
  • DNFBPs: customer due diligence (R.22)

Non-Compliance

Furthermore, Nicaragua was found to be “non-compliant” in several areas:

  • Transparency and beneficial ownership of legal persons (R.24) and arrangements (R.25)
  • Regulation and supervision of financial institutions (R.26)
  • DNFBPs (R.28)
  • International instruments (R.36)

Recommendations for Improvement

The report highlights several areas where Nicaragua needs to improve its AML/CFT regulations, including:

  • Strengthening national cooperation and coordination mechanisms
  • Enhancing customer due diligence requirements
  • Improving transparency and beneficial ownership regime

Response from Nicaraguan Authorities

In response to the report, Nicaraguan authorities have pledged to take steps to address these shortcomings and bring their AML/CFT regulations in line with international standards. The country’s progress will be closely monitored by the FATF in future reports.