Uruguay Faces Surge in Money Laundering Cases Amid Lax Regulations
Concerning Escalation in Money Laundering Cases in Uruguay
Montreal, Canada - Uruguay’s financial crime landscape has experienced a significant escalation, with money laundering cases linked to drug trafficking nearly doubling from 1,597 in 2018 to 3,021 in 2022 1, according to the Uruguayan National Secretary Against Money Laundering and Terrorism Financing (SENACLAFT) report released on September 1, 2022.
Key Findings from the Uruguayan Government Report
The report sheds light on crucial areas in Uruguay’s financial crime landscape:
- Financial Intelligence: Data from essential institutions like the Central Bank of Uruguay.
- International Cooperation: Collaboration with international organizations to counter money laundering.
- Preventative Systems and National Cooperation: Efforts to prevent financial crimes and foster inter-agency cooperation.
- Investigations and Convictions: Investigation strategies and achievements in prosecuting financial crimes.
Uruguay’s Vulnerability to Financial Crimes
Experts have long warned of Uruguay’s susceptibility to financial crimes due to the country’s limited resources and expertise 2. Alejandro Aparicio Montesdeoca, a financial consultant for SENACLAFT, discusses this “common denominator” 2.
International Money Laundering Connections
Uruguay’s link to international money laundering includes its beach town of Punta del Este, used in laundering operations for Los Cuinis, the finance arms of Mexico’s Jalisco Cartel New Generation (CJNG) 1. Additionally, Uruguayan nationals like Gastón Murialdo and Martín Mutio have been implicated in significant international cocaine shipments and associated laundering of profits through Uruguay’s financial system 1.
Problematic Legal Framework
In 2020, the Uruguayan government enacted a law that raised the cash transaction limit from $4,000 to $100,000, allegedly to boost financial liberty. Critics, including Nicolás Centurión, an Uruguay crime observer and analyst at the Latin American Center for Strategic Analysis (CLAE), view this law as a hindrance in the fight against money laundering, as it enables large purchases to go unchecked 1.
Limited Resources for Detecting and Prosecuting Financial Crimes
Uruguay’s capabilities for identifying and investigating financial crimes are severely limited, with only 12 financial crime investigators and a restricted number of supervisors in crucial sectors 1.
The Need for Change and Cooperation
To combat the rising tide of financial crimes, a multi-faceted approach and substantial investment in both human and technological resources are necessary. Montesdeoca suggests learning from Paraguay, where a focus on investigating money laundering following an investigation by the Latin America Anti-Money Laundering Group (GAFILAT) has led to substantial increases in seizures and convictions related to the crime in subsequent years 1.
A change in mindset and increased collaboration between public and private sector entities are essential as Uruguay tackles the challenge of financial crimes. Uruguay has taken preliminary actions, including the establishment of a dedicated money laundering prosecutor’s office in early 2023 and ongoing discussions regarding amending the 2020 law.