In-depth analysis reveals that corruption is the most prevalent financial crime in Latin America and the Caribbean despite efforts to address it “Global Financial Integrity


WASHINGTON DC – Global Financial Integrity (GFI) is pleased to present a comprehensive survey of 250 financial crime experts in Latin America and the Caribbean. The survey shows that countries in the region must address significant weaknesses in their anti-money laundering efforts if they are to reduce corruption, which generates massive illegal proceeds.

These findings are contained in a new report from Global Financial Integrity titled Financial crime in Latin America and the Caribbean: understanding national challenges and designing effective technical responses which assesses vulnerabilities and makes recommendations to strengthen the regional response to financial crimes in the Western Hemisphere. The same threats that make this region one of the most violent in the world also generate significant amounts of illicit proceeds, forcing these countries to grapple with complex landscapes of financial crime. The report finds that despite significant progress in laws and regulations, effective implementation of AML / CFT remains a challenge for many countries in the region.

“This survey shows that while some governments in the region are on the right track, many others need to step up their efforts to fight corruption and money laundering,” said Tom Cardamone, President and CEO of GFI. “The marks awarded to each government come from experts in that country. This internal assessment, in many cases, is a stinging rebuke to claims that corruption is under control. “

In order to fully grasp the extent of financial crime in Latin America and the Caribbean while understanding the specific local contexts and conditions, GFI conducted interviews with experts from government, civil society, the private sector and the ‘International organisations.

The 300-page report provides a country-by-country overview of the extent of financial crimes and the main threats facing individual countries. It includes a regional analysis of illegal activities that generate illicit proceeds, including drug trafficking, mineral trafficking, corruption, human trafficking and smuggling of migrants. In addition, it assesses current financial crime threats stemming from money laundering, commercial money laundering, terrorist financing and corruption.

The main findings of this report include:

  • Corruption is the most prevalent financial crime in the region, according to 250 interviews with experts. Next come money laundering, commercial money laundering and terrorist financing;
  • Corruption is also the biggest source of illicit income in the region, according to experts interviewed. It is followed by drug trafficking, migrant and human trafficking, and mineral trafficking;
  • The main channels used to move illicit proceeds within Latin America and the Caribbean include financial institutions, real estate, bulk cash smuggling and TBML;
  • Many countries have made improvements to their AML / CFT laws in recent years; however, implementation is often incomplete and political will varies;
  • The experts interviewed were asked to rate the effectiveness of their country’s efforts to combat financial crime on a scale of 1 (weak) to 5 (strong). The average score for the entire region was 2.47 / 5, reflecting that many experts believe current efforts are insufficient and more work is urgently needed.

In addition to examining these illegal activities and financial crimes, the report examines current national responses to understand what works and how countries can fight financial crimes more effectively. In addition, it analyzes the role of donor technical assistance by the United States and other stakeholders.

The main recommendations for the future include,

  • For the region as a whole, putting in place strong, up-to-date and transparent beneficial ownership registries is essential to tackle a host of financial crimes, including money laundering and corruption.
  • To combat money laundering, national and international authorities should take steps to strengthen the Mutual Legal Assistance Treaty (MLAT) process. In addition, they should ensure that the current focus on drug products does not overshadow efforts to combat other types of money laundering.
  • To tackle TBML, countries need to build awareness and knowledge of TBML within governments and the private sector.
  • To combat terrorist financing, it is important to update threat information; an updated multinational risk assessment of the tri-border area is recommended as a first step.
  • To fight corruption, countries in the region should improve transparency regarding the recruitment of public officials and promote meritocratic selection.
  • To combat human trafficking and smuggling of migrants, financial intelligence units and other regional actors should conduct more research into the financial channels used, which are currently not well understood. In addition, national authorities, including the United States, should recognize that restrictive border and asylum policies contribute to migrant smuggling.
  • To combat drug products, the United States and other stakeholders should help countries draft and / or implement asset seizure legislation.
  • To combat mineral trafficking, national authorities as well as donor countries should broaden their scope beyond gold, recognizing the risks associated with other minerals and gemstones.
  • For the donor community, it is important to marry ongoing AML / CFT technical assistance efforts with broader programs targeting governance, institutions and development.
  • For the United States, it is important to continue to strengthen American AML / CFT efforts, as systemic weaknesses in the United States facilitate the movement of illicit proceeds and undermine regional efforts to combat financial crimes.

GFI recognizes regional efforts to tackle financial crime and hopes this report will foster a more in-depth discussion on prevention and next steps to tackle crime as a region. Although each country’s context is unique, there are many common challenges across the continent, and understanding these challenges is an important first step towards effective action. GFI looks forward to continuing to work with governments, civil society and the private sector to address these challenges constructively.

Read the full report here.


ABOUT GFI: Global Financial Integrity (GFI) is a Washington, DC-based think tank producing high-caliber analysis on illicit financial flows, advising developing country governments on effective policy solutions, and promoting pragmatic transparency measures in the international financial system as a means of development and security.

Lauren Anikis
Communications coordinator

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