Money Laundering in the Market Place: Navigating in the Colombia Business Jungle
| Published date | 01 April 1998 |
| Date | 01 April 1998 |
| DOI | https://doi.org/10.1108/eb027177 |
| Pages | 115-119 |
| Author | Michael M. Ryman |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control —
Vol.
2 No. 2
Money Laundering in the Market Place: Navigating
in the Colombia Business Jungle
Michael M. Ryman
Doing business in Colombia can be a sobering
experience for multinational companies. Recently,
the CEOs of
a
variety of global multinationals and
banks1
were surprised to read in the morning
papers that their companies 'became unwitting
accomplices in the international drug trade',2
according to the Chairman of the Oversight and
Investigations Subcommittee, House Banking
Committee, US House of Representatives. With
that opening salvo, the war on drugs entered the
corporate boardroom. United States and other
global companies are fast becoming combat
veterans. Such are the perils of the global market-
place, especially in the business jungle in Colom-
bia.
A PREDATOR'S VIEW
Through the eyes of
a
money laundering predator,
a Colombian black market peso broker, the Sub-
committee heard the subtle intricacies of washing
US narco-dollars through unsuspecting major US
companies and banks. According to the US
Treasury Department's Financial Crimes Enforce-
ment Network (FinCen), the Colombian Black
Market Peso Exchange method is designed to
manoeuvre around the currency reporting require-
ments of the US Bank Secrecy Act (BSA).3 In this
public hearing before the Congressional commit-
tee,
many of America's most respected financial
and commercial institutions were badly mauled by
the narco-dollar beast that prowls the Colombia
business jungle. Corporate America is now just
another casualty in the battle with the drug cartels.
American companies, whether they like it or not,
have been drafted to fight America's war on drugs.
Is this the harbinger for all multinationals doing
business in Colombia?
According to the black market peso broker testi-
mony, the banks and companies identified were
easy prey. Unless these companies take effective
countermeasures the drug cartels will continue to
target them. As a result, American multinationals
are frantically scurrying to formulate effective
money laundering countermeasures.
A CASE STUDY
A classic case study of an effective corporate pro-
gramme to prevent and detect money laundering
— navigating the commercial jungle in South
America — is Mansur Trading (Free Zone), on
the island of Aruba.
Aruba, a former Dutch colony in the Caribbean
just 17 miles off the coast of Venezuela, is prob-
ably better known as a tourist Mecca, with beauti-
ful white sandy beaches, handsome hotels, a
hospitable gaming industry, and world-class cui-
sine.
But what is not generally known is that
Aruba has a thriving export industry, with the
attendant support of shipping, warehousing and
banking, especially in the Aruba Free Trade Zone
($360m in sales).
Free Trade Zones are economic devices to
attract businesses, create jobs and enhance the
overall economy by offering superior service and
diminished tariffs and duties, resulting in dis-
counted prices for goods, that pass through the
zone.
Free Zones handle most of the world's
products. They are much like the duty free stores
at airports.
Mansur Trading (Free Zone), with over 50
years'
experience and $100m in annual sales, is the
flagship of Aruba Free Zone traders in South
America. The main market is Colombia. The Anti-
Money Laundering Program initiative started in
1994,
after the company had more than a few bru-
shes with the USA over money laundering allega-
tions.
An extensive review by an outside consultant
skilled in US criminal prosecution of money laun-
dering schemes resulted in the present compliance
effort. Implementation started in June 1997.
Mansur Trading (Free Zone) is unique among
Caribbean and South American merchant expor-
ters.
It is the only company in the region that has
an American-style compliance programme to pre-
vent and detect money laundering that is totally
consistent with the provisions of the United States
Sentencing Guidelines for Organizations.4 Com-
panies doing business in Colombia can learn from
Page 115
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