Financial Crime World

Nicaragua’s Financial Crime Investigation Procedures Under Scrutiny: FATF Recommendations Assessment Reveals Mixed Results

The Financial Action Task Force (FATF) has released its latest Mutual Evaluation Report, assessing Nicaragua’s implementation of anti-money laundering and combating the financing of terrorism (AML/CFT) measures. The report highlights both areas where the country excels and those that require improvement.

Assessing Risk and Applying a Risk-Based Approach

  • Nicaragua is rated partially compliant in this area, with the FATF noting that while it has made progress in identifying and assessing risks, its risk-based approach needs further refinement.
    • Key areas for improvement: refining the country’s risk-based approach to better identify and mitigate financial crime risks.

National Cooperation and Coordination

  • Nicaragua scores largely compliant in this aspect, as it has established effective coordination mechanisms among law enforcement agencies, financial institutions, and other stakeholders.
    • Strengths: effective coordination mechanisms
    • Areas for improvement: none noted

Money Laundering Offence

  • Nicaragua is also rated largely compliant in defining and criminalizing money laundering, with the FATF commending its efforts to strengthen laws and regulations.
    • Strengths: strengthened laws and regulations
    • Areas for improvement: none noted

Confiscation and Provisional Measures

  • The country’s performance in this area is partially compliant, as it needs to improve its confiscation and provisional measures frameworks.
    • Key areas for improvement: refining the country’s confiscation and provisional measures frameworks.

Terrorist Financing Offence

  • Nicaragua scores partially compliant in defining and criminalizing terrorist financing, with the FATF noting that while it has taken steps to strengthen its laws and regulations, more work is needed.
    • Key areas for improvement: further strengthening of laws and regulations related to terrorist financing.
  • The country’s implementation of targeted financial sanctions related to terrorism and terrorist financing is largely compliant, according to the FATF.
    • Strengths: effective implementation of targeted financial sanctions
    • Areas for improvement: none noted

Other areas for improvement

  • Customer due diligence
  • Record keeping
  • Correspondent banking
  • Money or value transfer services
  • Internal controls

Regulation and Supervision of Financial Institutions

  • The FATF praises Nicaragua’s efforts to strengthen regulation and supervision of financial institutions, rating it partially compliant in this area.
    • Key areas for improvement: further strengthening of regulation and supervision.

Powers of Supervisors

  • The country scores largely compliant in granting powers to supervisors, allowing them to effectively oversee financial institutions.
    • Strengths: effective powers granted to supervisors
    • Areas for improvement: none noted

Financial Intelligence Units

  • Nicaragua’s implementation of financial intelligence units is rated compliant, as they play a critical role in analyzing and disseminating financial intelligence.
    • Strengths: effective implementation of financial intelligence units
    • Areas for improvement: none noted

Responsibilities of Law Enforcement and Investigative Authorities

  • The FATF notes that while law enforcement and investigative authorities have made progress, there are areas where improvement is needed, rating the country largely compliant in this area.
    • Key areas for improvement: further strengthening of responsibilities.

Powers of Law Enforcement and Investigative Authorities

  • Nicaragua scores partially compliant in granting powers to law enforcement and investigative authorities, as more work is required to ensure effective investigation and prosecution of financial crimes.
    • Key areas for improvement: refining the country’s powers granted to law enforcement and investigative authorities.

Overall Assessment

  • Nicaragua’s performance varies across different areas, with some aspects requiring significant improvement.
  • The FATF recommends that the country address these weaknesses to strengthen its AML/CFT regime and prevent financial crime.