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Ecuador Adopts Tough Anti-Money Laundering Law
Introduction
Ecuador has taken a significant step in its fight against money laundering by adopting a new law that imposes stricter regulations on financial transactions.
New Law Details
The Law on the Prevention and Eradication of Money Laundering was passed by the legislature on July 21, 2016, and comes into effect immediately. The law extends the reporting obligation to non-financial businesses and organizations, requiring them to report suspicious financial transactions involving amounts over $10,000 within four days.
Entities Required to Comply
The following entities will be required to comply with the reporting obligation:
- Mail service providers
- Transportation companies
- Trust administrators
- Cooperatives
- Foundations
- NGOs
- Individuals and businesses that conduct transactions in motor vehicles, ships, boats, and airplanes
Purpose of the Legislation
The sponsor of the legislation stated that its purpose is to detect money laundering in a more proactive manner by targeting:
- Tracing property transfers
- Possession, use, and marketing of property
- Gratuitous or for-profit transactions of assets in general
Key Reforms
One of the most significant reforms introduced by the law is an added provision to the Integral Penal Code, which penalizes tax fraud committed through third parties. The law also establishes a new autonomous body within the Coordinating Ministry of Economic Policy, the Unit of Financial and Economic Analysis, which will replace the current Financial Analysis Unit under the Attorney General’s office.
Impact
The new law aims to strengthen Ecuador’s efforts in combating money laundering and terrorist financing, and is seen as a major step forward in enhancing financial transparency and stability in the country.