QCOSTARICA – A real estate broker, construction company, casino, or a lawyer in Costa Rica may be among targets by extremist financial groups, making the country weak, allowing networks to launder money from organized crime.
That is the opinion of the Financial Action Task Force of Latin America (GAFILAT), a regionally based inter governmental organization created in 2000 and which Costa Rica became a member in 2010, to combat money laundering and terrorist financing.
In July, the group made an assessment of compliance with 40 recommendations for governments to strengthen their anti-money laundering and anti-terrorist structure.
In the 169 page report, “Mutual Evaluation Report of the Republic of Costa Rica“, the GAFILAT, based in Argentina, concludes that Costa Rica has no mechanism of penalties to punish the financing of terrorist groups.
One of the main weaknesses of the country is that it does not yet consider a crime the financing of these organizations, nor does it have authorities (agencies) to regulate casinos, both physical and online, to prevent the flow of illicit money.
For the GAFILAT, at the date of the assessment, there was no awareness by Costa Rican authorities of the risk, as a country, for that flow of money for terrorism.
Guillermo Araya, director of the Costa Rican Drug Institute (Instituto Costarricense sobre Drogas – ICD) warns that if the country does not comply with the recommendations on legal reforms and strengthen legal enforcement, it could be “gray listed”, that is “uncooperative” in the fight against terrorism.
Araya added that reforms to penalize financing of terrorist organizations have been prepared, however, the draft is still in the hands of the Executive Branch (Casa Presidencial), awaiting being sent to legislators.
María Isabel Cortés, executive director of the Costa Rican Banking Association (Asociación Bancaria Costarricense – ABC), expressed concern about the possible inclusion of the country in the gray list. That would bring negative effects, mainly in the domestic capital flow out and foreign money to Costa Rica, she said.
The GAFILAT warns the country lacks access to information on companies and trusts is a problem it needs to tackle.
The members of GAFILAT include: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, and Uruguay. Observer countries and organizations include: BID, Canada, Germany, INTERPOL, United States, and the World Bank. Click here for complete list.
The fact of the matter is, all of these entities listed as possible terrorism financing targets have to have bank accounts to do business. I would suggest that the true weak link in the chain is the banking system, which has the ultimate authority to investigate and demand suitable source and use of funds proof for any bank deposits made from a foreign source. Any Notary, or Attorney engaged in Real Estate Law, or other area of law requiring the receipt of large sums of money from foreign sources for the purchase of property, or otherwise in Costa Rica, must apply and open a Banking Regulatory Authority (SUGEF) supervised Escrow Account, meeting stringent demands on satisfying source and use of such funds, be subjected to an annual external audit performed by a SUGEF approved Auditor, and a transaction-by-transaction review by the bank in which the Escrow Account is located.