Homeland Security

23 November 2005

New Project Aims To Fight Money Laundering in Latin America

Steering committee of international banking experts will guide project

By Eric Green
Washington File Staff Writer

Washington -- The Inter-American Development Bank (IDB) is providing a $350,000 grant for a new project aimed at fighting money laundering in Latin America.

In a November 22 statement, the IDB said it is joining with the Federation of Latin American Banks on the project, which the IDB says will contribute to the "stability, integrity and security of the region's financial systems by fostering a close coordination between government agencies and financial institutions."

The IDB says money laundering, defined as the processing of criminal proceeds to disguise their illegal origin, is having a corrosive effect on the economies of Latin America and the Caribbean.  Latin America, said the IDB, is regarded as "perhaps the most active emerging region with money laundering through both bank and non-bank channels."  Financial systems need to be strengthened through multilateral cooperation to prevent money laundering, the IDB said. (See related article.)

The Federation of Latin American Banks -- based in Bogota, Colombia -- is a trade association representing Latin America's banking sector, and works with a number of national and international bodies, including two offices of the U.S. Department of Treasury: the Office of Foreign Assets Control and the Financial Crimes Enforcement Network, on fighting money laundering.

The new project to combat money laundering was presented at the federation's November 20-22 annual meeting in Miami.

The IDB said a steering committee of international experts will provide strategic direction to the project.  The Association of Banking Regulators of the Americas, the Inter-American Drug Abuse Control Commission of the Organization of American States, the Caribbean Financial Action Task Force, and the South American Financial Action Task Force have been invited to join the steering committee.  The project also will complement activities supported by the Andean Development Corporation and the Central American Bank for Economic Integration.

The Federation of Latin American Banks plans to hold a series of workshops in Argentina, Brazil, Chile, the Dominican Republic, Mexico, Panama, Paraguay and Uruguay, bringing together officials from banking regulation agencies, financial intelligence units and prosecutors' offices.  The IDB said the workshops will help pinpoint weaknesses and problems in the region's anti-money-laundering systems.

The U.S. State Department's International Narcotics Control Strategy Report for 2005 includes a section on money laundering and financial crimes.  That section is available on the State Department Web site.

(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)