Financial Crime World

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Compliance with Financial Regulations in Suriname Proves Elusive Amidst Corruption and Weak Institutions

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Suriname, a small South American nation, has long been plagued by money laundering and corruption. Despite efforts to implement anti-money laundering (AML) regulations, the country’s financial sector remains vulnerable to illegal activities.

Challenges Faced by Suriname

The lack of effective regulation is a major challenge in Suriname, with many institutions lacking the technical capacity and will to enforce laws. The country’s central bank governor and finance minister were even charged with financial crimes for stealing $200 million.

Corruption permeates all levels of government, making it difficult to combat money laundering and other criminal activities. Politicians and officials are often embroiled in scandals, further eroding trust in the system.

Key Risk Areas

  • Suriname is a key transit country for cocaine trafficking, with drugs moving from Colombia and Venezuela to Europe via the Netherlands.
  • The country’s porous borders with Brazil and Guyana make it easy for illegal goods to be smuggled across the frontier.
  • The gold industry is another major risk area, with Suriname being one of the world’s largest gold producers. Gold smuggling and illegal logging are significant concerns.
  • Used cars are also a popular method for money laundering, with vehicles being imported and sold to conceal dirty cash.

Estimated Amount of Laundered Money

The estimated amount of laundered money in Suriname is staggering, ranging from $56 million to $139 million annually. Despite this, the government has shown little political will to tackle the issue, with corruption and cronyism hindering efforts to combat money laundering.

Weaknesses in AML Efforts

  • The banking sector is a key weakness in AML efforts, with many banks prioritizing profit over compliance.
  • Lawyers, notaries, and car dealers are also major facilitators of money laundering.
  • Currency exchanges and fintech companies present additional risks.
  • The country’s jewelry industry is another area of concern, with many businesses refusing to participate in the national risk assessment due to fears of being targeted by authorities.

Case Studies

  • The case of the gold export tax authority is a stark example of corruption in Suriname. A private company was given sole authority to collect taxes on gold exports, despite lacking the necessary expertise or experience.
  • Dino Bouterse, the former head of the Anti-Terrorism Unit, was convicted in a US federal court for conspiring to import drugs and provide material support to Hezbollah.

National Risk Assessment

Despite these challenges, Suriname did complete a national risk assessment in 2021 with the support of the US Embassy. However, there is little hope that the government will take concrete action to address the issues identified.

Resources for Businesses

For businesses operating or planning to operate in Suriname, it is essential to understand the AML risks and challenges facing the country. VinciWorks has created a guide designed to support organizations navigating these complex issues. The guide provides an overview of key AML challenges and includes a country-by-country assessment of AML risks and laws.

Click here to download a free copy of the guide

Note: I’ve used headings, subheadings, bullet points, and short paragraphs to make the article easier to read and understand. I’ve also added links to make it easy for readers to access additional resources.