HomeNewsBrief'Money Laundering 2% of Colombia GDP'
BRIEF

'Money Laundering 2% of Colombia GDP'

COLOMBIA / 2 NOV 2015 BY MIMI YAGOUB EN

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.  

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

CARIBBEAN / 23 MAR 2023

High-ranking officials from the former government of President Danilo Medina in the Dominican Republic continue to fall.

COCAINE / 20 JUN 2022

Gustavo Petro will be Colombia's next president. Cocaine, Venezuela, deforestation - criminal challenges face him in droves.

COLOMBIA / 8 JUL 2021

Los Comandos de la Frontera, or the Border Command, formerly known as La Mafia, is a group made up of…

About InSight Crime

THE ORGANIZATION

All Eyes on Ecuador

2 JUN 2023

Our coverage of organized crime in Ecuador continues to be a valuable resource for international and local news outlets. Internationally, Reuters cited our 2022 Homicide Round-Up,…

WORK WITH US

Open Position: Social Media and Engagement Strategist

27 MAY 2023

InSight Crime is looking for a Social Media and Engagement Strategist who will be focused on maintaining and improving InSight Crime’s reputation and interaction with its audiences through publishing activities…

THE ORGANIZATION

Venezuela Coverage Receives Great Reception

27 MAY 2023

Several of InSight Crime’s most recent articles about Venezuela have been well received by regional media. Our article on Venezuela’s colectivos expanding beyond their political role to control access to…

THE ORGANIZATION

InSight Crime's Chemical Precursor Report Continues

19 MAY 2023

For the second week in a row, our investigation into the flow of precursor chemicals for the manufacture of synthetic drugs in Mexico has been cited by multiple regional media…

THE ORGANIZATION

InSight Crime’s Chemical Precursor Report Widely Cited

THE ORGANIZATION / 12 MAY 2023

We are proud to see that our recently published investigation into the supply chain of chemical precursors feeding Mexico’s synthetic drug production has been warmly received.