Friday 31 March 2023

Costa Rica must supervise non-financial activities to prevent money laundering and terrorism

Costa Rican Institute on Drugs reports 718 suspicious activities per year that represent a total of ¢222 billion colones, in 2022.

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31 March 2023 - At The Banks - BCCR

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QCOSTARICA (Summa Magazine) Under the slogan “The era of digital compliance”, around 300 compliance professionals from Latin America, both from the public and private sectors; they analyzed in Costa Rica, the great challenges of Latin America and the growing financial crimes such as money laundering, corruption and cyberattacks; during the “World Compliance Forum”.

“We are facing a reality where new and innovative forms of financial crimes have a place in the region, hence the importance of having professionals trained and specialized in the subject. We conclude this forum extremely pleased by the level of participants, by the data that emerged, by the challenges posed and above all, for the contacts to learn from each other’s positive experiences and carry out joint work against criminal finances and corruption,” commented José Quesada, president of the Foundation for the Study of Money Laundering (FELADE), organizing entity of the event in conjunction with the University for Peace.

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A compliance officer is responsible for ensuring that internal money laundering programs and procedures are executed, in order to ensure compliance with existing legislation and regulations. In Costa Rica it is estimated that there are around 10,500 compliance officers.

The great challenge of Costa Rica

Within the framework of this event, Román Chavarría, head of the Financial Intelligence Unit of the Costa Rican Institute on Drugs (ICD); He commented that one of the country’s great challenges is to supervise the new subjects obliged to report suspicious activities and comply with international standards to prevent money laundering and terrorist financing, dictated by the FATF – Financial Action Group on Laundering of Capitals of the OECD–.

He recalled that by Costa Rican law, “lawyers, accountants, real estate agents, moneylenders, sellers of metals and precious stones (jewelry) and pawnshops” are now obligated to report suspicious activities.

Chavarría added that compliance with these activities “has to do with due diligence, knowing the client, the origin of the funds, reporting suspicious transactions, among others; for which, the Financial Intelligence Unit has already generated a free platform to make the reports and lists of national and international risk are made available to the regulated entities”.

World figures on illicit trade disguised as legal

  • Illicit trade is the main source of criminal finance, with $520 billion per
    year, in its modalities of smuggling, counterfeiting of products, tax fraud and customs fraud.
  • 80% of the organizations dedicated to laundering are “fronts”, disguised as legal.
  • $3.4 trillion is the amount of money laundering in the world per year.
  • 60% of money laundering organizations use corruption.
  • 7 out of 10 organizations are made up of different nationalities.
  • Asset forfeiture and public-private cooperation, specialists consider are the keys to dismantle criminal organizations.

From the conference “Criminal finances as an axis of investigation”, by Juan Carlos Buitrago, Brigadier General (PN-R)/Founder/CEO Strategos Bip (Colombia) and Víctor Guerra, Senior Consel Trade Prevention, Philip Morris International (Colombia ). Juan Carlos Buitrago cited Europol and OECD figures.

According to the Financial Intelligence Unit, 2022 registered 718 suspicious activities, which represent more than ¢222 billion.

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Of this total number of suspected cases, the ICD sent 290 reports to the Public Ministry for the due process of confirmation of the crime. For this, the judicial authority must initiate its pertinent assessments to determine the illegality.

Challenges for the Americas

Some of the main ideas, analyzed by the Rector of the University for Peace, Francisco Rojas, Celina Realuyo, Expert in The Global Initiative Against Transnational Organized Crime and Mauricio Viera, director of the UPaz Transnational Illicit Trade Chair.

  •  Despite the fact that there is no war, Latin America is the most violent region in the world.
  • During the COVID19 pandemic, new technologies accelerated digital illicit activities in 10 years.
  • Now young people ask for drugs through their cell phones, with emojis.
  • 110,000 people died in one year from new drugs in the United States.
  •  International cooperation is the best way to deal with global crime.
  • Education is the best way to build resilience and strengthen the presence of the State in communities historically called small or forgotten.

“If we have to define three substantive threats to the world are: climate change,
war in Europe, money laundering and transnational organized crime that causes death,
economic destruction and affects the whole of society”, commented the Rector of UPaz.

Finally, Realuyo analyzed the 5 pillars of the Biden Administration’s policy to
fight corruption and work together with Latin American countries:

  1. Modernize, coordinate, and resource the US government’s efforts to combat corruption.
  2. Stop illicit finances.
  3. Hold corrupt actors accountable.
  4. Strengthen the multilateral architecture against corruption.
  5. Enhance diplomatic engagement and leverage foreign assistance resources to
    achieve the objectives of the anti-corruption policy.
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