Suriname’s Financial Underbelly: Types of Financial Crimes Threaten Economy

Suriname, a small nation in South America, has been grappling with financial crimes for years. The country’s porous borders, weak institutions, and endemic corruption have created an environment conducive to money laundering, drug trafficking, and mineral smuggling.

Lack of Effective Regulations and Laws

The lack of effective regulations and laws has allowed criminal networks to flourish in Suriname. Estimated annual laundered proceeds range from $56 million to $139 million. The government’s reluctance to tackle these issues head-on has led to a culture of impunity, where convicted criminals operate their businesses with ease.

Poor Regulation

Suriname lacks a robust financial regulatory framework, making it easy for money laundering operations to thrive. The central bank and finance minister have been embroiled in corruption scandals, including the brazen theft of $200 million.

Corruption

Corruption is rampant at all levels of government, with politicians and officials often using their positions for personal gain. This has created a toxic environment where criminal activity goes unchecked.

Types of Financial Crimes

Drug Trafficking

Suriname serves as a transit point for cocaine from Colombia and Venezuela to Europe, particularly the Netherlands, which shares a historical connection with Suriname. The former head of the anti-terror unit was convicted in a US court for drug trafficking and funneling profits to Hezbollah.

Mineral Trafficking

Mineral trafficking is another significant problem in Suriname. Gold smuggling and illegal logging are significant risks, with gold accounting for nearly 80% of Suriname’s exports. The country’s porous borders with Brazil and Guyana make it easy for criminals to smuggle illegal goods in and out of the country.

Used Cars and Currency Exchanges

Used cars have become a popular method for transaction-based laundering, with vehicles being imported and sold to hide dirty cash. Currency exchanges are often unregulated, with supermarkets acting as de facto currency dealers.

Challenges in Combating Financial Crimes

Law enforcement agencies face significant challenges in combating financial crimes due to limited resources, corruption, and a lack of technical expertise. The banking sector is particularly weak, with many banks prioritizing profits over compliance.

National Risk Assessment

In 2021, a national risk assessment was completed, but its findings remain confidential. The report highlighted several key channels for money laundering, including the car industry and jewelry sector, which refused to participate in the assessment.

Terrorist Financing

Suriname is also used as a hub for Hezbollah operations, with the former head of the Anti-Terrorism Unit convicted in a US court for conspiring to import drugs and provide material support to the terrorist organization.

Conclusion

In conclusion, Suriname’s financial system is plagued by corruption, lack of regulation, and weak enforcement mechanisms. The country’s AML laws are not effectively implemented, allowing criminal networks to flourish. It is essential that the government takes immediate action to address these issues and work with international partners to combat financial crimes.