HomeNewsBriefEcuador Remains on International Money Laundering Blacklist
BRIEF

Ecuador Remains on International Money Laundering Blacklist

ECUADOR / 27 FEB 2013 BY MIRIAM WELLS EN

Ecuador must deal with its continued failure to comply with international standards on money laundering and financing terrorism, according to an international agency tasked with dealing with these crimes.

Even as inter-governmental body the International Financial Task Force (FATF) removed both Cuba and Bolivia from its list of countries deemed to be uncooperative in enforcing international standards against money laundering, Ecuador stayed on, according to an FATF update released on February 22. It is now the only Latin American country in a list of 13, which includes Syria and Pakistan.

Cuba and Bolivia were moved to a separate list consisting of 26 countries that are improving their compliance in meeting international standards against money laundering, but are still considered to have made insufficient progress. Venezuela, Argentina, and Nicaragua are also included on this list.

As Ecuadorean newspaper La Hora reports, Attorney General Diego Garcia said that before removing Ecuador from the list, the FATF is adamant that Ecuador pass a series of laws which allow for the freezing of assets linked to terrorism and money laundering, among other measures. The laws are currently being considered by Congress, he said.

Ecuador’s recently re-elected President Rafael Correa has criticized the FATF’s categorization. Last year he called the agency “one of the many tools of neo-colonialism.”

InSight Crime Analysis

Some $3 billion — or four percent of the country’s gross domestic product (GDP) — were allegedly laundered in Ecuador in 2011. Several factors have made the Andean nation an increasingly attractive destination for international criminal organizations seeking to launder their proceeds, including the country’s adoption of the US dollar as official currency. Ecuador’s strict bank secrecy laws and loose restrictions on money transfers have arguably further contributed to the problem.

The proliferation of international criminal organizations working in the drug trade and laundering funds in Ecuador once prompted a head agent of the Drug Enforcement Administration (DEA) to call the country the “United Nations” of organized crime. Colombian groups using the gold mining industry in northern Ecuador to disguise their illicit profits are just one example of this phenomenon, as InSight Crime has previously reported.

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