Costa Rica: 25 Days to Avoid the "Gray List"

Entrepreneurs who do business overseas could see their commercial operations affected if the country is included in the list of non cooperative nations in the fight against money laundering and terrorism financing.

Tuesday, June 21, 2016

EDITORIAL

The demonstrated difficulty of the Solis administration in governing, understood as the management of conflicts between different sectors of the population, makes it difficult to be optimistic and believe that it eill be able to approve, before July 15th, the laws against money laundering and terrorism financing, which would prevent the country from being included in the list of non-cooperative countries on these issues.

The director of the Costa Rican Drug Institute (ICD as it is known in Spanish), Guillermo Araya, told deputies in the special legislative commission investigating the issue of the Panama Papers, that before July 15, the Assembly "... must approve the initiative that establishes the financing of terrorism as a crime and imposes a penalty of up to 15 years in prison on those who travel abroad to commit such acts or work for them. "   This project also includes the   "... Freezing of suspicious assets and precise cases where the police can dismantle money laundering networks."

Araya said that "... if Costa Rica ends up on the gray list or is listed as a non - cooperating country (in the fight against money laundering and high risk for terrorist financing), obviously the Costa Rican financial system would collapse, both public and private".

The prestige of Costa Rica as an institutionalized country has so far prevented it from being explicit signaled internationally as a center of money laundering, but times of globalization are fast, and there is increasingly stronger pressure from the major economies in the world to prevent tax evasion by their national citizens.  The extent of money laundering in Costa Rica amounts to $4 billion a year, noted the Directorate of National Intelligence and Security (DIS) itself, therefore the country is a clear target of pressure from the G20 and its dependent department the Financial Action Task Force (FATF).

The parsimony with which problems in the "pura vida" country are addressed, must be ignored and a reaction is urgent, especially from the sector dedicated to international trade - both importers as well as exporters - in order to avoid a situation that could seriously hinder -and make more expensive-, international business transactions.



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Once enacted, the newly approved law will force accountants, lawyers, realtors, and other professionals to report suspicious transactions made by their clients.

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