Must-read article at Deutsche Welle on the upcoming report by The Financial Action Task Force (FATF),
Ecuador emerges as hub for international crime
Ecuador is emerging as a focus for transnational criminal groups, according to US and European officials. Colombian and Mexican drug traffickers as well as Chinese and African human traffickers use it as a business hub.
The Financial Action Task Force (FATF), the inter-governmental body responsible for combating money laundering and the financing of terrorism, is expected at its meeting in February in Abu Dhabi to include Ecuador on its high-risk jurisdiction list at the request of G20 finance ministers.
Ecuador attracting transnational crime
FARC’s penetration of Ecuador’s government and judiciary, the country’s weak institutions and anti-money laundering laws and its nonexistent anti‐terror financing laws as well as its porous borders with its drugs producing neighbors have turned Ecuador into a place where transnational criminal organizations from Latin America, Russia, China, India and Africa can conduct business, according to a just-released report by the Washington-based International Assessment and Strategy Center (IASC).
The report goes on to say that Ecuador is “increasingly attractive for Russian organized criminal groups, both for weapon sales to the FARC and to launder money” and that “Chinese triads, particularly those involved in smuggling human beings, have greatly increased their presence in Ecuador.” The Financial Action Task Force warned in 2007 that Ecuador had failed to comply with 48 of its 49 recommendations on money laundering and terrorist financing.
The officials say the lifting in 2008 of visa requirements for nationals of most countries and the adoption in 2000 of the US dollar as Ecuador’s national currency make it easy for Russian, Chinese, Indian and African criminal organizations to operate in Ecuador.
The dollarization of Ecuador’s economy, lax restrictions on the movement of large amounts of money and some of world’s strongest bank secrecy laws enable the laundering by Russian crime groups of proceeds of Mexican drug and Asian and African human traffickers. A recent study by Quito’s San Francisco University concluded that annually up to $1billion (0.7 billion euros) are laundered through Ecuador. US law enforcement officials say the figure could be substantially higher.
The lifting of visa requirements has allowed Chinese triads as well as Indian and African human traffickers to process people they are trafficking through Ecuador, the Washington institute’s report says. US diplomats say that virtually every non-Latin American immigrant caught since the lifting entering the United States from Central America and Mexico has transited through Ecuador. “They are mostly Africans or Central Asians, which raises security concerns,” one diplomat said.
DW also explains some of the shady financial dealings with Iran, and the corrupt judicial system.
If you are one of the many Americans considering retirement in Ecuador, I urge you to read this article.