Financial Crime World

Nicaragua’s Efforts to Implement AML/CFT Regulations Receive Mixed Review

The Financial Action Task Force (FATF) has recently released a report on Nicaragua’s efforts to implement anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations. The report yields mixed results, with a combination of “compliant”, “largely compliant”, and “partially compliant” ratings across various requirements.

Compliance Highlights

  • Nicaragua was found to be compliant in several areas, including:
    • Assessing risk and applying a risk-based approach (R.1)
    • Customer due diligence (R.10)
    • Record keeping (R.11)
    • Transparency and beneficial ownership of legal persons (R.24)
  • The country also received positive marks for its efforts regarding:
    • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
    • Correspondent banking (R.13)

Areas Requiring Improvement

  • Nicaragua was found to be largely compliant in several areas, including:
    • National cooperation and coordination (R.2)
    • Confiscation and provisional measures (R.4)
    • Powers of supervisors (R.27)
  • The country received mixed results for its efforts regarding:
    • Money laundering and terrorist financing offences (R.3 and R.5)
    • Financial intelligence units (R.29)
  • Nicaragua was found to be partially compliant in areas such as:
    • New technologies (R.15)
    • DNFBPs: customer due diligence (R.22)

Outstanding Issues

  • The report highlights the importance of continued efforts by Nicaragua to improve its AML/CFT framework and implementation.
  • The country is encouraged to address outstanding issues, particularly regarding:
    • Regulation and supervision of financial institutions (R.26)
    • International cooperation, particularly regarding extradition (R.39)

Conclusion

While Nicaragua has made progress in implementing AML/CFT regulations, there are still areas that require improvement. The country’s financial sector must continue to work towards achieving full compliance with international standards to effectively combat money laundering and the financing of terrorism.