Evolution of methods of money laundering in Latin America
| Date | 01 April 2003 |
| Published date | 01 April 2003 |
| DOI | https://doi.org/10.1108/13590790310808718 |
| Pages | 137-140 |
| Author | Ricardo M. Alba |
| Subject Matter | Accounting & finance |
Evolution of Methods of Money Laundering in
Latin America
Ricardo M. Alba
MONEY LAUNDERING PREVENTION
AND CONTROL
Latin America is de®ned as the set of Spanish, French
and Portuguese-speaking countries in South America
and the Spanish-speaking countries in the Caribbean
region. English and French-speaking countries and
territories in the Caribbean region are not considered
part of Latin America.
The most signi®cant eorts developed in the last
years by government, regulatory authorities, ®nan-
cial institutions and international organisations in
Latin America, in order to establish a legal, regula-
tory, professional and operative framework to
combat money laundering have been:
Ð The expansion of the scope of illegal activities
associated with money laundering, such as illegal
drug tracking, ®nancial fraud, kidnapping,
tracking of human beings, illegal tracking of
arms, extortion, ®scal evasion, improper appro-
priation of public funds, bribery, contraband
and terrorism.
Ð The incorporation of the notion of `capital laun-
dering' (in the sense of accumulated wealth)
instead of money laundering or asset laundering,
to enlarge the scope in the ®ght against this crime.
Ð The extension of sanctions to the non-banking
®nancial services (bureaux de change, money
remission services, pawnshops), stock markets,
internal and international commerce, and to
gaming establishments.
Ð Clearer delineation of the `responsibility per
omission' through incorporation of concepts
such as `intentional ignorance' and `collective
knowledge' in the laws pertaining to money
laundering.
Ð Reinforcement of the responsibility of `due
diligence' which banks and other institutions
have to put into practice.
Ð More eort to go into inspection of ®nancial
institutions on the part of the ocial supervision
bodies.
Ð Punishment measures to be taken not only against
employees found guilty of money laundering,
but also for directors, executive ocials and the
®nancial institution itself.
Ð More emphasis on corporate responsibility where
®nancial institutions are found to be guilty of
money laundering.
Ð The establishment of specialised organisations
of ®nancial intelligence, generally known as
Financial Intelligence Units (FIUs), able to
perform a more precise analysis of the informa-
tion coming from ®nancial and other institutions,
with the objective of identifying patterns in cases
of money laundering.
Ð Reduction or elimination of some barriers to
con®dentiality, allowing the authorities to
develop money laundering investigations locally
as well as to pay more accurate attention to
requests for information and carrying out
freezing and seizure of funds, in the ®eld of
international judicial collaboration.
Ð The growing pressure by the US government
and the Financial Action Task Force (FATF) to
increase the supply of information through the
FIUs for the detection of money laundering and
tax evasion in the USA and European countries.
Despite increasing eorts and the amount of resources
involved, there has been a rather poor outcome in the
number of money laundering cases either under
investigation by the authorities or on trial.
TRENDS IN AVOIDANCE
How to avoid the use of cash
Cash is usually the most direct source of funds from
crimes aimed at obtaining economic bene®t such as
drug tracking, kidnapping, extortion, contraband,
and people tracking. To a lesser extent, it is the
direct source of economic bene®t from other crimes
such as fraud, illegal trac of arms and corruption.
For criminals, given their fear of the potential
seizure or forfeiture of illegal funds, cash operations
are the easiest way to place the bene®ts of their
crimes in a ®nancial institution and thereby start the
Page 137
Journal of Financial Crime Ð Vol. 10 No. 2
Journal of Financial Crime
Vol.10,No. 2,2002,pp. 137 ±140
#HenryStewart Publications
ISSN 1359-0790
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