Nicaragua’s Anti-Money Laundering Unit Tainted by Politics

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Controversy over the Nicaragua’s appointment of an army general to head a new anti-money laundering unit reveals the difficulty of disentangling the fight against organized crime from politics in this Central American nation.

President Daniel Ortega named Major General Denis Membreño Rivas to head the new Financial Analysis Unit (UAF). Membreño has served as the army’s inspector general and as head of its intelligence agency. His deputy will be police Chief Commissioner Aldo Martin Saenz Ulloa, reported Confidencial.

The government passed the law creating the Financial Analysis Unit in June. Its mission is to prevent the laundering of profits from crime or terrorism, and it will have the power to demand information on “suspicious transactions,” defined as those involving the transfer of $10,000 or more.

Jose Adan Aguerri, head of business association Cosep, expressed concern that the unit’s leaders were not specialists in finance, insisting that they lacked the experience to lead the body. However, he said that it was good that at least the men were not drawn directly from the ruling FSLN party, reported La Prensa.

InSight Crime Analysis

The controversy over the establishment of the anti-money laundering unit is an example of how, as with many things in Nicaragua, the fight against organized crime is hard to disentangle from politics. The business sector, government critics and civil society groups have opposed the creation of the UAF, saying that the government will use it to harass its opponents and invade citizens’ privacy.

Opposition parties have warned that the unit, which will be under the direct command of the executive, could be used as a “political weapon” by the Ortega government.

However, it is important to establish this kind of institution to complement the interdiction work Nicaragua is carrying out.  Last weekend the Nicaraguan navy intercepted a boat carrying a ton of cocaine off the coast of the North Atlantic Autonomous Region (RAAN). A recent InSight Crime investigation examined the Nicaraguan criminal networks that have been set up to traffic cocaine through the RAAN and neighboring South Atlantic Autonomous Region (RAAS), driving up murder rates and in some areas substituting for the state. The government needs all the tools it can to fight the growing problem Nicaragua faces as a transit nation for drugs.

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