Financial Crime World

Uruguay’s Struggle to Crack Down on Money Laundering

Progress in Implementing Anti-Money Laundering Measures

Uruguay has made significant progress in implementing anti-money laundering (AML) and combating the financing of terrorism (CFT) measures, according to a recent evaluation by the Financial Action Task Force (FATF). However, despite these efforts, the country still faces challenges in detecting and preventing money laundering activities.

Areas of Improvement

The FATF evaluation highlights areas where Uruguay needs to improve its AML/CFT framework. These include:

  • Financial Institution Secrecy Laws: Uruguay’s laws do not provide sufficient transparency regarding beneficial ownership of legal persons and arrangements.
  • Customer Due Diligence: The country’s customer due diligence requirements are not stringent enough, and financial institutions do not always conduct adequate checks on customers.
  • Internal Controls: Financial institutions in Uruguay lack effective internal controls to prevent money laundering activities.
  • Regulation and Supervision of Financial Institutions: Uruguay needs to improve its regulation and supervision of financial institutions to ensure they comply with AML/CFT requirements.
  • Powers of Supervisors: The country’s supervisory authorities do not have sufficient powers to investigate and punish financial institutions that engage in money laundering activities.

Key Findings

The FATF evaluation found Uruguay to be:

  • Largely Compliant in assessing risk and applying a risk-based approach (R.1)
  • Compliant in national cooperation and coordination (R.2) and confiscation and provisional measures (R.4)
  • Non-compliant or Partially Compliant in:
    • Financial institution secrecy laws (R.9)
    • Customer due diligence (R.10)
    • Internal controls (R.18)
    • Regulation and supervision of financial institutions (R.26)
    • Powers of supervisors (R.27)
    • Reporting of suspicious transactions (R.20)

Way Forward

The FATF report recommends that Uruguay continue to strengthen its AML/CFT framework by:

  • Improving the regulation and supervision of financial institutions
  • Enhancing customer due diligence requirements
  • Increasing transparency in beneficial ownership of legal persons and arrangements

By addressing these challenges, Uruguay can further strengthen its efforts to combat money laundering and terrorist financing, ultimately contributing to a safer and more stable financial system.