Financial Crime World

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Money Laundering in Nicaragua: A Deep Dive into the Country’s Anti-Money Laundering Efforts

Nicaragua, a country in Central America, has faced several challenges in its efforts to combat money laundering. The Financial Action Task Force (FATF) has been monitoring the country’s progress and has published ratings that reflect its compliance with international anti-money laundering standards.

Challenges in Nicaragua’s Anti-Money Laundering Regime

According to Nicaragua’s Mutual Evaluation 2017, the country faces several weaknesses in its anti-money laundering regime. Specifically:

  • Assessing Risk: Nicaragua struggles to assess risk and apply a risk-based approach to combating money laundering (Ratings 1 and 10).
  • Cooperation with Other Countries: There are concerns about the country’s ability to cooperate with other countries on matters related to terrorism financing and proliferation (Ratings 5 and 7).
  • Effective Confiscation and Provisional Measures: Nicaragua faces challenges in implementing effective confiscation and provisional measures against those involved in money laundering (Rating 4).
  • Supervision of Financial Institutions: The country has limited powers of supervision over financial institutions (Rating 27).
  • Regulation and Supervision of Non-Profit Organizations: Nicaragua’s regulation and supervision of non-profit organizations require improvement (Ratings 8, 24, and 25).

Progress Made in Strengthening Anti-Money Laundering Regime

Despite these challenges, Nicaragua has made some progress in strengthening its anti-money laundering regime. For example:

  • Customer Due Diligence and Record Keeping: The country has implemented measures to improve customer due diligence and record keeping by financial institutions (Ratings 10 and 11).
  • Enhancing Transparency and Cooperation: Nicaragua has taken steps to enhance transparency and cooperation with other countries on matters related to money laundering and terrorist financing (Ratings 29-31).

Conclusion

While Nicaragua faces significant challenges in its efforts to combat money laundering, it is working to improve its anti-money laundering regime. The country’s authorities must continue to address these weaknesses if they are to effectively prevent the misuse of its financial system for illicit purposes.