Financial Crime on the Rise in Uruguay: Government Report Reveals Nearly Doubled Money Laundering Cases Tied to Drug Trafficking

A Disturbing Trend Emerges

A recent government report has shed light on a disturbing trend in Uruguay, where money laundering cases tied to drug trafficking have nearly doubled over the past five years. The statistics released by the National Secretary Against Money Laundering and Terrorism Financing (SENACLAFT) show that investigations into these cases rose from 1,597 in 2018 to 3,021 in 2022.

Lax Regulations and Lack of Resources Contribute to Rise in Financial Crimes

The report highlights a consistent annual increase in money laundering cases connected to drug trafficking, raising concerns about the country’s lax regulations and lack of resources to combat financial crimes. Experts warn that Uruguay has invested little in preventing, detecting, and prosecuting these types of crimes, leaving the door open for organized crime groups to launder their profits through corporate structures and real estate.

International Connections

Uruguay’s role in international money laundering is particularly evident in the coastal town of Punta del Este, which was linked to Los Cuinis’ laundering activities. The group ran the finances of Jalisco Cartel New Generation (CJNG), one of Mexico’s most powerful cartels. Additionally, Uruguayans involved in massive cocaine shipments have laundered millions through the country’s financial system.

Criticisms and Concerns

The 2020 law that raised the limits on cash payments from $4,000 to $100,000 has been criticized as a step backwards in the fight against money laundering. Critics argue that allowing such large purchases makes it easier for individuals to move illicit funds without being detected.

• Uruguay’s lack of resources to detect and prosecute financial crimes is also a significant concern.
• A recent government analysis found that there are only 12 people investigating financial operations and strategies, compared to at least 50-60 personnel in neighboring countries.

Hope for Change

However, change may be on the horizon. Uruguay has created a prosecutor’s office dedicated to money laundering and is discussing changing the 2020 law that raised the limits on cash payments. Additionally, SENACLAFT has funded an evaluation of the country’s anti-money laundering capabilities, which highlighted the need for greater resources and coordination between investigative units.

Lessons from Neighboring Countries

In neighboring Paraguay, which also struggles with corruption and a large informal economy, significant investments have been made to investigate money laundering. As a result, Paraguay has seen a major increase in seizures and convictions related to the crime.

Need for Expertise and Coordination

Uruguay’s lack of expertise in financial crimes is another area that needs attention. Unlike other countries, Uruguay does not have a police unit dedicated to financial crimes, and existing investigative units do not sufficiently coordinate or cooperate with each other.

As Uruguay struggles to come to terms with its role in international money laundering, it is clear that a change in approach is needed. Experts emphasize the need for greater resources, coordination, and cooperation between investigative units, as well as a shift in how the problem of money laundering is viewed.