Money Laundering Task Force Critiques Bolivia, Cuba

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Cuba and Bolivia have been mentioned on the Financial Action Task Force’s (FATF) list of countries with “strategic deficiencies” in the fight against money laundering and terrorist financing.

According to a public statement released on the intergovernmental body’s website, Cuba does not work directly with the FATF and its standards “pose a risk to the international financial system.” While Bolivia has made commitments to work with the task force, the country “has not made sufficient progress” toward combating money laundering and terrorist financing.

Meanwhile, Paraguay has been removed from the FATF’s watch list after the country made progress following criticism of its efforts against money laundering in 2008, according to a report by ABC. Paraguay was listed among Bolivia and Cuba in the FATF’s October 2011 report.

InSight Crime Analysis

Bolivia and Cuba both have poorly regulated financial systems and have been previously identified by the FATF as having “strategic deficiencies.” But neither country is a hub for international finance and banking, nor do they have well developed real estate trades. For criminal organizations looking to launder dirty cash into the banking system, other countries with longer traditions of banking secrecy, as well as under-regulated but thriving real estate trades, are likely more appealing. 

Paraguay, on the other hand, may have stepped up its efforts against money laundering, but it has other challenges in confronting organized crime. As a 2011 report by the U.S. Embassy in Paraguay notes, the country has a “multi-billion dollar illicit economy” centered around Ciudad del Este (pictured) and the porous triple border the city shares with Brazil and Argentina, through which drugs, arms, and counterfeit goods pass.

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