Reading time: 4 minutes
Every year, criminals around the world launder $1.6 trillion in transactions, bypassing global authorities and strict surveillance networks. While significant progress has been made in combating irregular financial flows around the world, the increasing use of cryptocurrencies and financial loopholes has made this challenge even more pressing.
Three years ago, the United Nations said money laundering was nearly 2.7% of global GDP and called for urgent reform of global finance. US-based Nasdaq revealed that more than $3.1 trillion in illicit funds were flowing through the global financial system in 2023.
Leading the way in tackling these issues is the new chairman of the Financial Action Task Force (FATF), a Paris-based organization that fights global money laundering, terrorist financing and proliferation financing. This is Elisa de Anda Madrazo. De Anda, a 42-year-old Mexican, is the second woman and fourth Latin American to lead FATF in its 35-year history. A lawyer with two master’s degrees from Harvard University, her career has included positions at Mexico’s Ministry of Finance and Public Trust. Since her two-year term began on July 1, she has aimed to promote financial inclusion and assist countries with low capacity to implement FATF’s anti-money laundering and counter-terrorist financing standards.
Money laundering scandals continue to occur in high-income and low-income countries alike, including TD Bank’s guilty plea and $3 billion fine last week, and the recent $2.2 billion case in Singapore. And in recent years, Latin America has seen high-profile investigations into money laundering, from Brazil’s groundbreaking car wash operation to the Panama Papers.
Having a Latin American president could bring some of the financial crime challenges facing the region and other developing countries back “to the forefront of the FATF’s agenda,” it said. said Julia Jansula, program director for environmental crime and illicit finance in Washington. Based on the FACT coalition, he told AQ.
Mr. de Anda began his public sector career in 2015 at the Mexican Financial Intelligence Service, part of the Ministry of Finance. In an interview with AQ in August, De Anda said she started working for the government because she was “interested in looking at organized crime from a financial perspective.”
There she worked as an attaché at the Mexican Embassy in Washington from 2015 to 2019, primarily focusing on bilateral issues between Mexico and the United States. She served as the head of the Mexican delegation to the FATF and later served as the organization’s vice president. Mexico’s government hailed De Anda’s election in February as a “victory” for the country’s fiscal diplomacy and a vote of confidence in the country.
FATF and Latin America
Established by the G7 in 1989 to combat money laundering, the FATF’s mandate has been expanded twice. The first time was to combat terrorist financing after 9/11, and again in 2012 to stop financing the proliferation of weapons of mass destruction. More than 200 countries and jurisdictions have committed to implementing FATF’s anti-money laundering and counter-terrorist financing standards, including 40 member states, primarily high-income countries, and nine regional bodies. Includes countries within the organization’s global network of Russia’s membership was suspended in February 2023.
FATF states that in order to be considered as a potential member candidate, a country must be “strategically It stipulates that it must be “important”. Money laundering and counterterrorism financing activities, among many other criteria. Indonesia was the latest country to join, joining in 2023.
The FATF sets standards for anti-money laundering and combating the financing of terrorism and evaluates their implementation through peer reviews, known as mutual assessments. On average, these national assessments take almost two years to complete.
The organization also uses “gray” and “black” lists to identify countries with weak anti-money laundering and anti-terrorism measures. The Gray List includes jurisdictions that have increased surveillance and are actively cooperating with the FATF to address deficiencies in anti-money laundering, terrorist financing, and counter-proliferation financing. The blacklist includes “serious strategic deficiencies” in the same areas.
The blacklist also includes Iran, North Korea and Myanmar. The gray list, last updated in June, includes 21 countries, including Venezuela and Haiti. In the past few years, several Latin American and Caribbean countries have been removed from the gray list, including Jamaica, Barbados, Panama, and Nicaragua.
Issues remain to be resolved in the region, which is under the jurisdiction of the Buenos Aires-based Financial Action Task Force for Latin America (GAFILAT). Mr. de Anda highlighted some of the anti-money laundering challenges identified by GAFILAT in its 2021 threat assessment, namely financial crimes (mainly tax evasion), corruption and bribery, and illicit transactions (mainly drug-related). .
Mr. De Anda told AQ that in a recent meeting with GAFILAT officials, he had been working on improving these crimes in the region, including access to information on transnational organized crime, asset recovery, virtual assets and beneficial ownership. He said he had identified several obstacles to combating and deterring the situation.
supporting low-income countries
Some critics point out that because the FATF applies the same recommendations to all countries, low-income countries may not be able to implement these standards as effectively as high-income countries. “All links in the chain need to work together,” De Anda told AQ, including countries with significant capacity, but “jurisdictions with limited capacity, primarily low-income countries, This includes countries in debt crisis.” You need to make sure everyone is on board. ”
Under his chairmanship, Mr. de Anda will ensure that the FATF guides jurisdictions with lower capacity to implement its standards and considers their challenges, and ensures that all voices are heard when drafting standards. I hope you will. The FATF invites regional jurisdictions with no FATF member states to participate as observers on an annual basis. De Anda also highlighted FATF’s ties to the global network, citing recent visits to Colombia and Kenya.
on the horizon
De Anda told AQ that a new evaluation round has begun and will also include Mexico and Cuba. The FATF is expected to release a new global threat assessment on terrorist financing and proliferation of weapons of mass destruction in mid-2025.
When asked about new trends in illicit finance, De Anda said that cyber-based fraud is on the rise and is “not just a threat, but a vulnerability that countries are not prepared to fight against.” This is also an issue.” ” Cybercriminals frequently use virtual assets, De Anda said, and regulation and oversight of this area in Latin America is still beginning.
“What is very interesting in Latin America is the interest in private sector involvement and compliance,” de Anda noted. Lawyers, notaries, accountants, banking associations, and other financial institutions in the region tend to be well organized, allowing for “good communication and coordination between governments.” For De Anda, this is a “huge strength” of the region.
About the author
Reading time: 4 minutes Sweigert is editor of Americas Quarterly and policy manager for the Americas Society/Council of the Americas.
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The opinions expressed in this article do not necessarily reflect those of Americas Quarterly or its publisher.
