Financial Crime World

Uruguay’s Journey Towards Financial Compliance: a Look at the 2020 Mutual Evaluation

Amidst the international community’s heightened focus on financial compliance and global efforts to curb money laundering, Uruguay underwent a thorough evaluation of its Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) measures by the Financial Action Task Force (FATF). In this article, we’ll explore the assessment’s findings for each of the FATF Recommendations.

FATF Recommendations and Uruguay’s Compliance

Recommendation R.1: Assessing risk and applying the risk-based approach

The assessment found that Uruguay was largely compliant (LC).

Recommendation R.2: National cooperation and coordination

Uruguay demonstrated some compliant (C) elements but improvements were identified to enhance cooperation and coordination among authorities.

Recommendation R.3, R.5, R.6, 7, 12, and R.17 (AML/CFT offenses, targeted financial sanctions)

Uruguay complied with these requirements.

Recommendation R.4: Confiscation and provisional measures

Uruguay required some improvements but was largely compliant.

Recommendation R.8: Non-profit organizations

Uruguay had compliant measures in place.

Recommendation R.9: Financial institution secrecy laws

Uruguay was non-compliant, and measures to address this need to be taken.

Recommendation R.10: Customer due diligence

Uruguay was largely compliant once some remaining issues are addressed.

Recommendation R.11: Record keeping

Uruguay complied with the requirements.

Recommendation R.13: Correspondent banking

Uruguay was largely compliant, with some areas for enhancement.

Recommendation R.14: Money or value transfer services

Uruguay had compliant measures in place.

Recommendation R.15: New technologies

Uruguay was largely compliant but needed improvements regarding risk assessments.

Recommendation R.16: Wire transfers

Uruguay complied with the requirements.

Recommendation R.18: Internal controls and foreign branches and subsidiaries

Uruguay made significant progress towards compliance but still requires improvements.

Recommendation R.19: Higher-risk countries

Uruguay complied with the requirements.

Recommendation R.20: Reporting of suspicious transactions

Uruguay was largely compliant, with some areas requiring enhancements.

Recommendation R.21: Tipping-off and confidentiality

Uruguay had compliant measures in place.

Recommendation R.22: Designated non-financial businesses and professions (DNFBPs)

  • Customer due diligence: Uruguay was largely compliant.
  • Other measures: Uruguay required improvements.

Uruguay had compliant measures in place but faced challenges with implementation.

Uruguay was still developing measures to address this requirement.

Recommendation R.26: Regulation and supervision of financial institutions

Uruguay demonstrated some compliant elements, but improvements were needed.

Recommendation R.27: Powers of supervisors

Uruguay was required to address issues to fully comply.

Recommendation R.28: Regulation and supervision of DNFBPs

Uruguay’s AML/CFT framework is partially compliant (PC), and significant improvements are needed.

Recommendation R.29: Financial intelligence units

Uruguay had compliant measures but continued to face challenges with capacity and resourcing.

Recommendation R.30: Responsibilities of law enforcement and investigative authorities

Uruguay was compliant but needed improvements in coordination and information sharing.

Recommendation R.31: Powers of law enforcement and investigative authorities

Uruguay’s progress towards compliance was partially satisfactory.

Recommendation R.32: Cash couriers

Uruguay’s provisions didn’t comply with the FATF standards, and changes are needed.

Recommendation R.33: Statistics

Uruguay has some improvements to make in providing up-to-date statistics.

Recommendation R.34: Guidance and feedback

Uruguay was compliant when addressing identified deficiencies, but improvements are ongoing.

Recommendation R.35: Sanctions

Uruguay’s enforcement of confiscation and foreign-related money laundering offenses was found to be ineffective.

Recommendation R.36: International instruments

Uruguay complied with the requirements.

Uruguay largely complied with the requirements for mutual legal assistance.

Recommendation R.38: Mutual legal assistance - Freezing and confiscation

Uruguay had compliant measures in place but required enhancements.

Recommendation R.39: Extradition

Uruguay’s provisions complied with the FATF standards but lacked effective implementation.

Recommendation R.40: Other forms of international cooperation

Uruguay demonstrated some compliance with this requirement, but improvements are necessary.

Overall findings

The 2020 Mutual Evaluation indicates that Uruguay is making progress towards international AML/CFT standards. However, several recommendations require significant improvements to fully meet these standards.