Uruguay’s new anti-money laundering plan is likely intended to help restore international confidence in the the country’s financial system, which is closely linked to one of South America’s epicenters for money laundering, Argentina.
The law, which was designed with help from the International Monetary Fund (IMF), is a two-year plan that implements several reforms aimed at making it easier to investigate and prosecute money laundering crimes.
It also strengthens oversight of non-governmental organizations (NGOs). At the press conference announcing the plan, the head of the Anti-Money Laundering Secretariat said that because they are exempt from paying taxes, NGOs often engender “an environment suitable for there to be irregularities.”
Deputy Secretary to the Presidency Diego Canepa said it is necessary to “permanently [fight money laundering] and be alert to be a step ahead of organized crime’s plans.” The IMF echoed Canepa’s rhetoric, stating there was “strong political support” in Uruguay to fight money-laundering.
InSight Crime Analysis
As InSight has reported, Uruguay is at risk of becoming more vulnerable to organized crime, as violence and drug seizures increase within its borders. However, Uruguay already plays a significant role in international money laundering. The Uruguayan central bank receives on average more than 200 reports annually of “operations suspected” of money laundering.
The international community has placed significant pressure on Uruguay to curb this trend. Uruguay is a member of GAFISUD, which is a part of Financial Action Task Force, an intergovernmental network aimed at combating money laundering. In 2009, GAFISUD placed Uruguay on its list of countries with significant money laundering activities. The same year, the Organization of Economic Cooperation and Development (OECD) placed Uruguay on its “grey list” of tax havens.
The US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) said late last year that 36 suspicious activities were reported in Uruguay between November 2009 and June 2011. Argentina accounted for eight percent of all the reports in the world. Money laundering activities in Argentina most often involve exchanging money in Uruguay, which probably contributed to its high place on the list of countries involved in money laundering.
However, the government has tried in recent years to decrease its role in money laundering activities. In 2009, the 2004 anti-money laundering law was updated to require bank clerks and real estate operators to report suspicious activity. This new law is part of this renewed attempt to convince the international community of Uruguay’s commitment to combating money laundering, and it may be working: in February, the FATF did not name Uruguay in its list of high-risk or non-cooperative countries.