Cases of suspected money laundering transactions soared in Costa Rican financial entities during the past year. Bank sent to the Instituto Costarricense sobre Drogas (ICD) – Costa Rican Institute on Drugs – 507 complaints of operations suspected of “legitimación de capitales” in 2018, an increase of 58.4% compared to 320 cases in 2017.
In addition, alerts on atypical movements of money by bank customers have had sustained growth trend since 2012.
However, the jump in the so-called Reportes de Operaciones Sospechosas (ROS) – Suspicious Transaction Reports – originated from a combination of greater prevention controls in banking and a greater presence of organized crime in Costa Rica, according to Guillermo Araya, director of the ICD.
“Evidently, there is a large presence of cash in Costa Rican streets (…). The objective of the launderers and drug traffickers is to introduce the money into the financial system. With this objective, they seek to enter the banking sector directly or through non-financial professional activities to justify the money,” explained Araya.
The official added that, at the end of 2017, a series of laws were approved that typified financing of terrorism, as well as greater transparency in the formation and finances of public limited companies, “sociedades anónimas” or “SA” in Spanish.
A financial institution performs a ROS when it has indications that a client’s funds come from criminal activity or related to money laundering.
Banks may sound the alert when a person or company makes money movements that exceed the declared amounts of income before the financial institution, and the client’s transactional history.
Reports are also made when the amount of resources is equal to or greater than US$10,000 or it’s equivalent in Colones and the client cannot justify their origin.
For each report, the ICD conducts a forensic audit and determines if there are indications for an in-depth investigation, and the case is sent to the Ministerio Publico (Prosecutor’s Office).
At the end of last year, the ICD had a total of 22 cases referred to the Ministerio Publico and another 49 still in the audit process.
Between 2010 and 2017, a total of 103 people were convicted in the country for money laundering, according to ICD data.
Origin of cases
In 84% of the 507 reports in 2018, that is, 428, were made by public or private banks. These cases almost doubled compared to 2017, when banks reported 226.
Next are the cooperatives, financial services companies, stock market and pension operators. As a group, they made 51 in total in 2018. The remaining 28 cases were reported by remittance companies, ie Western Union, Teledolar and vehicle dealerships.
Bernardo Alfaro, Ssuperintendente General de Entidades Financieras – General Superintendent of Financial Institutions, explained that the increase in cases occurred as of 2012, due to the Financial Action Task Force (FATF) implementing a comprehensive global strategy to combat money laundering and terrorist financing.
In Latin America, the purpose of the Financial Action Task Force of Latin America, GAFILAT, (formerly known as Financial Action Task Force of South America (GAFISUD)) is to work toward developing and implementing a comprehensive global strategy to combat money laundering and terrorist financing as set out in the FATF Recommendations, of which Costa Rica is a member.
The GAFILAT enables regional factors to be taken into account in the implementation of anti-money laundering measures.