According to Colombia's government, the laundering of profits from drug trafficking and common crime accounted for two percent of the country's gross domestic product (GDP) in 2013. However, the figures may not be as indicative of success against combating money laundering as the official story would have it.
As EFE reported, the figures are the result of a study by Colombia's Financial Information and Analysis Unit (UIAF) and the World Bank, announced UIAF director Luis Edmundo Suarez.
According to EFE, the report also shows that in 1985, money laundering constituted 10 percent of GDP, while by the end of the millennium this had grown to 14 percent. From 2000 to 2013, this illicit share of the GDP decreased.
SEE ALSO: Coverage of Money Laundering
Suarez claimed that this drop is the result of implementing Plan Colombia -- a US-backed security package aimed at increasing Colombia's military strength and fighting drug trafficking -- and anti-laundering efforts by the UIAF.
Suarez added that the study identified 140 different money laundering methods, including one known as "pitufeo" -- or "smurfing." This is notoriously difficult to track, as it involves splitting large proceeds into smaller amounts before integrating the funds into the legal economy.
In June 2015, the UIAF and World Bank announced the implementation of a macroeconomic model that would facilitate measuring the impact and extent of money laundering in Colombia.
InSight Crime Analysis
Although the reported fall of money laundering's share in Colombia's GDP is indeed impressive, these numbers nonetheless need to be taken with a pinch of salt. It is true that the funnelling of illegal drug dollars into the Colombian economy is not as flagrant as it was in the 1980s, when traffickers could deposit dirty cash into banks by the bagful with hardly any repercussions. However, as with most estimates related to the criminal economy, coming up with precise numbers for money laundering is extremely difficult.
SEE ALSO: Coverage of Colombia
This is partly because techniques used to launder money are constantly evolving. "Smurfing" is a clear example of this, allowing criminal networks to launder small quantities of money that rarely attracts the suspicion of authorities.
Given Colombia's unofficial status as a security model for the rest of Latin America, it is unsurprising that government officials would attribute the apparent decline in money laundering to Plan Colombia. Other incidents suggest that Colombian criminal groups continue to use contraband, phone cards, and gold exports as a way to launder funds.
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