Colombia Intensifies Battle Against Money Laundering

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Illegal activity fuelled by money laundering is equivalent to 3% of Colombia’s GDP. It’s one of the most pervasive economic issues in Colombia, and local administration is developing and implementing more and better ways to identify and stop companies or individuals of committing this crime.

According to the Information and Financial Analysis Unit in Colombia, when a person or organization generates profits from an illicit activity, the people involved look for ways of controlling the assets without being noticed. In other words, the delinquents “wash” their income before spending or investing it in the legal economy. This process is commonly known as “money laundering” or “asset laundering.” Specifically in Colombia, money laundering is present on a big scale, particularly in commercial and financial areas.

A study developed by the Basel Institute on Governance says that Colombia, Chile and Peru are the Latin American countries with the strongest legal and institutional infrastructure to combat asset laundering activities. On a scale where zero means absence of risks and 10 means more exposure to these crimes, Colombia obtained 4.61, Chile 4.07 and Peru 4.42. Bolivia and Paraguay showed the greatest weakness in the list of 162 countries with 7.32 and 7.59, respectively.

The Bank Association of Colombia (ASOBANCARIA) recently gathered individuals from public organisations and private companies at the XV Pan American Congress on Risk of Money Laundering and Terrorism Financing with the purpose of establishing the latest trends on asset laundering and terrorism financing, and to determine ways to protect these institutions from the effects of these practices.

New measures were announced to identify and control these practices. One of the new regulations states that, from next year, the International Finance Action Group (GAFI) will audit all non-financial companies regarding their asset laundering and terrorism financing system. The GAFI aims to promote and effectively implement legal, regulatory and operational measures to combat money laundering, terrorism financing and other threats to the integrity of the international financial system.