Trends, News and Events that are Shaping the AML Arena in Latin America

Transcription

1 Trends, News and Events that are Shaping the AML Arena in Latin America Presented by: Octavio Betancourt- Managing Director 1 MoneyLaundering.com 15 th Annual International Anti-MoneyLaundering Conference

2 PROFILING 2

3 Argentina Colombia Belize Guatemala Paraguay Mexico Venezuela Uruguay Is the country the one that poses the risk? Or the nationals of that country? What about behavior? Beginning of profiling (Pattern Recognition) Beginning of clustering (gathering of demographics) 1. Cultural aspects Cultural Bias Assumptions 2. Last names 3. Known Qualities 3

4 KIDNAPPING 4

5 Wire Transfer Cashier Check Bearer Shares Your Bank Account Criminal Organization The Laundering The Release Illicit Money Express Kidnapping SAR? 5

6 FACTORING 6

7 FACTORING Purchase of Account Receivables at a discount Scarce Credit Shortage of Cash Flow No financing available Not being paid on time by customers Country # of Factoring Companies Domestic Factoring 2008 (Millions of USD) International Factoring 2008 (Millions of USD) Total Factoring Volume 2008 (Millions of USD) Total Factoring Volume 2004 (Millions of USD) % Increase Argentina ,756 8, % Brazil ,000 7,756 38,756 21, % Chile ,150 1,128 22,278 5, % Colombia 5 2, ,961 0 Mexico 20 12, ,465 5, % Source: Factors Chain International USD 72,556 Millions 7

8 1 The Factoring Company Seller Inc. Criminal Organization A. Third Party Payments B. Tax Havens Illicit Money 5 A 6 1 Buyer Inc. Licit Money Factoring Inc. 8

9 BELIZE 9

10 Lax regulation Suspicious Activity is only reported by Financial Institutions Identity Shield Photograph: ambergriscaye.com/pages/town/map.html Bearer Shares permitted 10

11 VENEZUELA 11

12 PASSPORTS 12 Source:

13 NESTING ACCOUNTS Source: Mr. Robert Morgenthau. The link between Iran and Venezuela: A crisis in the making? When a foreign financial institution gains access to the U.S. financial system by operating through a U.S. correspondent account belonging to another foreign financial institution. Export Development Bank of Iran International Development Bank (Banco Internacional de Desarrollo) Opened on Jan in Venezuela who is prohibited from establishing a relationship with a U.S. bank could instead establish a relationship with a Venezuelan or Panamanian bank that has a relationship with a U.S. bank. 13

14 FRONT MEN 14

15 Organized crime in Guatemala evolves systematically towards new mechanisms to launder money and other assets, and thus evade authorities controls. The laundering of assets from theft of identity and financial activities of some insurance has become the target of the prosecution against the laundering of money, the Public Ministry (MP). Leopold Liu, Chief of the prosecution, confirmed that they investigated the case of a person involved who wash cars on public roads, and whose name appeared as a legal representative of a "paper company", and whose personal data was used to make monetary transfers abroad. During our investigation, it appears that he was used to make transfers that were carried out by other people who were familiar with the system. However, he was assassinated a few months ago while he was speaking at a public telephone, explained Liu. The Prosecutor stated that banking records showed as if the deceased had conducted a series of financial activity. 15

16 Money Laundering: Law enforcement raided 35 money exchange bureaus and banks 1,800 homeless bought around USD 1.2 Billion within 1 year Homeless were recruited as coleros by a criminal organization Coleros are people that buy dollars in different money exchange bureaus. They just have to provide their name and their DNI (National Identity Document) 16

17 TRIANGULATION 17

18 Export Controls violations Contraband Hide beneficiaries Triangulate funds The funds can go to one place and then transfer to another 18 Photograph:

19 MEXICO & ARGENTINA 19

20 Sales of counterfeit drugs in Mexico were estimated to exceed USD 1.5 Billion Represents 10% of the formal market (USD 15.5 Billion) Well coordinated rings, often working closely with organized crime, slip fake medication into Mexico s legitimate drug supply Growing presence of illicit, online pharmacies is increasing (in 2004 over 200 online pharmacies operating along the US-Mexico border.) Chemical import restrictions in Mexico Currently methamphetamine production is still high Mexico is the primary source of methamphetamine in US drug markets. Mexican DTO s (Drug Trafficking Organizations) are circumventing chemical sales and import restrictions in Mexico Imports of Ephedrine was prohibited in 2008 Source: National Drug Intelligence Center Photograph: Source: Kroll Global Fraud Report Photograph: 4.bp.blogspot.com/_hh3EcdMAlg4/SdEnVM6AeeI GRUPO COLLINS In 2008 was included in the US Treasury Department black list. Providing to a small drug cartel raw material to produce methamphetamines ARGENTINA 20

21 At the beginning Argentina was only a transit country. DTO s (Drug Trafficcking Organizations) from all over made Argentina home and entered drugs for the local market and to transship them New addition to their portfolio were extasis and methamphetamines. Due to the Argentinean open trade policies for the buying and selling of ephedrine. Building labs in border zones Source: Revista Cambio When thinking about the drug war, most focus on Colombia and Mexico Argentina s entry into the drug trade has built up in recent years. Twenty-six tons of ephedrine were imported to Argentina in 2007, compared to only 5 tons in Source: LatIntelligence Photograph: narcoguerillatimes 21

22 REPATRIATION 22

23 Acquisition of assets Acquisition of land or buildings in Mexico Investments made through Mexican Institutions or institutions that are incorporated in Mexico. Acquisition of stocks issued by corporations in Mexico Deposit on Savings and Loans entities authorized by regulatory entities Source: Expansion 23

24 Source: Argentinean funds abroad are of USD 140 Billions Unofficial sources estimates almost USD 230 Billion Only USD 18 Billion were declared to the tax authorities Estimate that USD 109 are in the USA 24

25 WHAT ABOUT 25

26 Country Rank Score Denmark Somali United States Chile / Uruguay Costa Rica Cuba ALBA El Salvador US Dollar Colombia Mexico / Peru Bulk Cash (USD) Brazil Panama Bearer Shares US Dollar Guatemala Bearer Shares Bolivia ALBA Argentina Belize Bearer Shares Nicaragua Bearer Shares ALBA Paraguay Bearer Shares Ecuador US Dollar ALBA Venezuela ALBA Perception of degree of corruption as seen by businesspeople and country analysts. Ranges from 10 (highly clean) and 0 (highly corrupt). Total of 180 countries Index. Source: Transparency International Bulk Cash (USD) 26

27 FOREIGN 27

28 Anguilla, a small Caribbean island is the second source of foreign investment in Colombia, after the US. In 2008, foreign investment in Colombia was of USD 9 Billion. Eleven percent (11%), almost USD 1 Billion came form Anguilla. US investment was of USD 1.2 Billion. 28