Africa’s Fight Against Money Laundering in Nicaragua: A Review of Compliance with FATF Recommendations

The Financial Action Task Force (FATF) has released a follow-up report on Benin, assessing its compliance with recommendations to prevent money laundering and terrorist financing. The report highlights both progress made by Nicaragua and areas where the country falls short.

Compliance Highlights

• Nicaragua is largely compliant in:
  • Assessing risk and applying a risk-based approach (R.1)
  • National cooperation and coordination (R.2)
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
• The country shows partial compliance in:
  • Confiscation and provisional measures (R.4)
  • Terrorist financing offence (R.5)
  • Record keeping (R.11)

Shortcomings

• Nicaragua is non-compliant with regards to:
  • Transparency and beneficial ownership of legal persons (R.24)
  • Legal arrangements (R.25)
• The country is partially compliant in:
  • Confiscation and provisional measures (R.4)
  • Customer due diligence (R.10)
  • New technologies (R.15)

Progress Made

• Nicaragua has made significant progress in recent years, including:
  • Improvements in regulation and supervision of financial institutions (R.26)
  • Powers of supervisors (R.27)
  • Strong cooperation with other countries through mutual legal assistance (R.37) and freezing and confiscation (R.38)

Conclusion

• The report emphasizes the importance of continued efforts to strengthen Nicaragua’s anti-money laundering regime, particularly in areas such as transparency and beneficial ownership.
• Full compliance with FATF recommendations is crucial for preventing money laundering and terrorist financing in the region.
• To ensure effective prevention, it is essential for Nicaragua to continue strengthening its anti-money laundering regime and addressing the remaining shortcomings identified in the report.