GAFILAT evaluates El Salvador’s anti-money laundering efforts

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By Marco Echevarria

The Latin American Financial Action Task Force (GAFILAT) visited El Salvador to assess its fight against money laundering and the fight against terrorism financing. The evaluation visit lasted 12 days and was carried out by experts from Guatemala, Costa Rica, Nicaragua, Panama, Uruguay and the Dominican Republic.

The event was confirmed by GAFILAT on its social networks, where it details that the activity took place within the framework of the Fourth Round of Mutual Evaluations carried out by the countries that make up that international organization.

“The on-site visit is a key stage of the process, as it aims to verify the extent to which international anti-asset and counter-terrorism financing (ALA/CFT) standards are being implemented in the country,” GAFILAT reported.

The on-site visit is a key stage of the process, as it aims to verify the extent to which international standards are
They’re implementing.
GAFILAT, on their social networks.

The process was coordinated by the Financial Investigation Unit (UIF) of the Office of the Attorney-General of the Republic (FGR) and was attended by 40 working meetings, including government institutions related to the subject of the visit, including the Ministry of Justice and Public Security (MJSP), the Supreme Court of Justice (CSJ), the Superintendency of the Financial System (SSF) and the Ministry of Economy (MINEC). International representatives also met with non-profit organizations, banks, cryptocurrency service providers, casinos, lawyers, accountants, co-ops, among others.

The final evaluation report will be presented at the end of July 2024, following presentation and discussion of the plenary of Representatives of FATFLAT. It would be a month after the International Financial Action Task Force (FATF) Global Network reviewed.

There is progress

Experts analyzed this visit for the RAMFICATE PRENSA and addressed their expectations for El Salvador.

Iris Montano, a technician with the Foundation for the Studies for the Application of Law (Fespad), clarified that El Salvador is new to GAFILAT, since it was integrated only in 2022, and that this is why two important components are analyzed: “technical compliance and effectiveness.”

The lawyer spoke about the factors that the evaluation group came to analyze. “One of the components that analyzes mutual evaluations has to do with the normative framework, in this sense it can be considered that some actions have been public and notorious, such as the Instruction for the Prevention, Detection and Control of Money and Asset Laundering, Financing of Terrorism and Proliferation of Weapons of Massive Destruction of the FIU. This was followed by reforms to include the issue of Virtual Assets, and in September 2023 several reforms were incorporated, including some relating to the Customer Diligence (DDC) and requirements of the enforcement officials for the non-profit organizations,” he said.

I am also talking about the Special Law on the Prevention, Detection and Punishment of Money Laundering and Assets, Financing Terrorism and the Proliferation of Weapons of Mass Destruction, which was withdrawn from the plenary of the Legislative Assembly, which had already been approved by the Security Commission, and which, according to a report by LA PRENSA GRANIFIC, had excluded important sectors such as political parties and construction sector from supervision. The expert also said that meeting these standards prevents the country from entering the grey list and has the opportunity to enter unimpeded financial markets.

The good evaluation in FATF in general is for multilateral financing. Since the World Bank, the BCIE and the IMF are observers.
ALAC-FUNDE, on evaluation.

“The good evaluation in FATF in general is for multilateral financing, as the World Bank, the Central American Bank for Economic Integration (BCIE), the International Monetary Fund (IMF) are observers, so doing well generates good reference for the fight against the illegals that are sought to combat,” said the Center for Legal Anti-Corruption Advisory (ALAC) of the National Development Foundation (Funde).

For his part, Martín Martínez, a specialist in money laundering, said that this mutual evaluation is routine, and that what is being established is “what the Salvadoran system in the field of combat and prevention of money laundering is in accordance with international regulations, according to all the instructions and technical standards, instruments and good practices that FATF has drawn. This somehow demonstrates the fulfillment of the international commitments that El Salvador must necessarily make.”

Of the recently approved regulations, the expert only questions what happened to the Draft Law on Laundering of Assets that was about to be passed in the Legislative Assembly, since in the end the First State Body did not report whether it was approved or whether they will wait after the elections.

El Salvador’s latest evaluation dates back to 2010

El Salvador had not been visited for more than a decade. In 2010, the Immediate Caribbean Action Group (Gafic) left these observations:

Extraditions
One of the observations was on the extraditions. GAFIC said there was time implementation of measures to cooperate internationally, lack of laws and procedures that clearly regulate extradition. That’s already been reformed.

IFC resources
This observation was one of the most extensive. GAFIC said there was an “a lack of functional autonomy for the FIU,” as it depends directly on the decisions and appeals made by the Attorney General. For the time being, the IIF continues to depend on the FGR.

Organizations
The FATF said the country does not inform organizations of the risks of use in the financing of terrorism. This is a point that organizations still argue, they say that in the regulations the country does are not taken into account.

This article has been translated from the original which first appeared in El Salvador