Uruguay’s Money Laundering Problem: A Five-Year Surge and Lax Regulations
In the past five years, Uruguay has experienced a significant surge in money laundering cases linked to drug trafficking, raising concerns over the country’s lax regulations.
Key Findings from SENACLAFT Report (2018-2022)
- An increase from 1,597 investigations in 2018 to 3,021 in 2022
- Concerns that criminal organizations are exploiting Uruguay’s lax regulations
Vulnerabilities Exploited by Criminal Organizations
Lack of Resources
Financial consultant Alejandro Aparicio Montesdeoca identified a notable lack of resources dedicated to preventing, detecting, and prosecuting money laundering in Uruguay as a key factor. This lack of resources allows drug trafficking profits to be laundered through corporate structures and real estate purchases.
Uruguay’s Role in International Money Laundering
Los Cuinis and the Punta del Este Connection
Uruguay has been linked to money laundering activities, as evident through its connection to Los Cuinis, who ran the finances of the Jalisco Cartel New Generation (CJNG), in the beach town of Punta del Este.
Prominent Uruguayan Cases
Notable Uruguayan individuals, such as Gastón Murialdo and Martín Mutio, have been linked to massive cocaine shipments and laundered their profits through Uruguay’s financial system.
Legislative Loopholes
Despite growing concerns, Uruguay passed a law in 2020 that significantly increased the limits for cash payments from $4,000 to $100,000 to pursue financial freedom. Critics argue that this law moves Uruguay backward in the battle against money laundering, as it makes large purchases less likely to garner scrutiny.
Quote from Nicolás Centurión: “With that, you can buy more than a car. Someone can show up with $100,000, and no one has to ask questions.”
Lack of Enforcement Resources and Expertise
Uruguay’s lenient regulations are further exacerbated by a scarcity of resources for detecting and prosecuting abuses of the system. A recent government analysis found Uruguay had significantly fewer personnel dedicated to money laundering investigations than its neighbors.
Quote from Alejandro Aparicio Montesdeoca: “In Uruguay, there are only 12 people investigating financial operations and strategies, plus some supervisors in a few sectors.”
Lack of Coordination and Specialized Police Units
Unlike countries like Brazil and Paraguay, Uruguay does not have a police unit specifically dedicated to financial crimes. Existing investigative units in the private and public sectors do not cooperate or coordinate sufficiently.
Quote from Nicolás Centurión: “There are fewer and fewer controls against Latin American and international organized crime groups that keep advancing.”
Initial Steps to Combat Money Laundering
To address the growing money laundering problem, Uruguay has taken initial steps, including:
- SENACLAFT funded Montesdeoca’s evaluation
- Creation of a prosecutor’s office dedicated to money laundering in 2023
- Ongoing discussions to change the 2020 law that raised the cash payment limit.
By acknowledging the problem and adopting more comprehensive strategies beyond just laws and regulations, Uruguay can make progress in the fight against money laundering.