Use of ALBA Nations Currency Linked to Money Laundering

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Authorities in Ecuador and Venezuela are investigating companies suspected of using the countries’ shared virtual currency to launder money, highlighting how greater economic integration can be exploited for criminal purposes.

Prosecutors from both countries are looking into a series of “unusual operations” carried out by businesses using the SUCRE (from its Spanish initials for Unified System for Regional Compensation) — a virtual currency used for trade between countries belonging to the Bolivarian Alliance for the Americas (ALBA).

The suspicious activities, which involve around five percent of total transactions using the SUCRE, include businesses registered with false details, bank transfers far in excess of a business’ registered income and expenditure, and payments for non-existent goods, reported EFE.

According to Ecuador’s Attorney General, Galo Chiriboga, the authorities believe many of the suspect transactions are linked to laundering drug trafficking profits.

InSight Crime Analysis

The SUCRE was devised by the ALBA nations in an attempt to break the stranglehold of the US dollar on international commerce. It has been in use as a virtual currency since 2010, with the intention that it will be used as a hard currency in the future.

The ease with which the SUCRE allows international transactions and a lack of legal oversight both on a national and international level has seen the system come under criticism for being an ideal tool for money laundering. Critics in the United States have even suggested the system has been used to help Iran skirt economic sanctions.

In Ecuador, the combination of the SUCRE with a dollarized economy creates a particularly inviting environment for money launderers.

Among the principal ALBA nations, Ecuador, Venezuela, and Bolivia all play a prominent role in the drug trade, and, as appears to be the case with the SUCRE, their increasing economic integration is likely to facilitate the transnational flow of the huge illegal profits the trade generates.

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