Suspicious Financial Transactions in Chile Up 33% from 2012

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Officials in Chile have reported a 33 percent increase in suspicious financial transactions for the first half of 2013, suggesting organized crime groups are using Chile as a base for money laundering operations.

The Finance Ministry’s Financial Analysis Unit (UAF) received 770 reports of suspicious financial transactions from the private sector between January and June 2013, representing a 33.2 percent increase compared to the same period in 2012, according to Infosur Hoy. Of these, 66 percent — 505 cases — were reported by banks or money transfer businesses, and 101 were subsequently referred to the Public Ministry for investigation.

The Public Ministry has reported 67 money laundering convictions since 2007, with 89 percent of those cases linked to drug trafficking. According to UAF Director Mauricio Fernandez, “drug trafficking is, and will continue to remain for some time, the main source of investigations and sentences for money laundering,” reported Infosur Hoy.

The government also seized approximately $6 million and 43 properties from people linked to money laundering between 2007 and 2011. According to Fernandez, the ease with which companies are created in Chile facilitates money laundering, with 30,620 new businesses registered in the first five months of the year — a 40 percent increase on the same period in 2012.

InSight Crime Analysis

Chile’s economic stability and growth make it an attractive location for the financial operations of criminal groups. According to former UAF director Tamara Agnic, laundering money in Chile is appealing because funds coming from the country are not seen as suspicious when they enter other markets.

See Also: Coverage of Money Laundering

Though not as significant as the major regional markets of Argentina and Brazil, Chile does have a growing domestic drug market. The small, relatively wealthy country accounts for 10 percent of all cocaine consumed in Latin America and the Caribbean, according to the UNODC. Chile also plays a smaller role as a transshipment point for Europe-bound drugs.

However, while the growth of the drug trade and money laundering may cause concern for the longevity of the nation’s status as the safest country in Latin America, the fact Chilean authorities actually have a handle on the extent of dubious financial transactions, are able to quantify them, and are willing to publicize them, is testament to it having one of the healthiest democracies in the region. 

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