Little Political Will For Fighting Money Laundering in El Salvador

Amendments to the recently approved law are still deficient because they do not include regulations such as special controls for Politically Exposed Persons.

Wednesday, December 18, 2013

From a press release issued by the Salvadoran Social Economic Development Foundation (Fusades):

Background

Money laundering consists of making it seem that wealth acquired through illegal activities, such as political corruption and drug trafficking, comes from legal activities. El Salvador has had a law to combat this crime since 1998, but this does not fully comply with international standards, therefore it is necessary to adapt it to these. On December 5, 2013, the Legislature amended several provisions of the Act, allegedly for this purpose, but following this, the law is still deficient.

The Legislature, without any justification, did not include one of the most important regulations to combat money laundering, which is to create a special control for Politically Exposed Persons (PEP), despite repeated calls made by the Attorney General of the Republic to the Committee on Public Safety and Anti-Drug Trafficking in the Legislature.

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El Salvador: Reform to Law Against Money Laundering Approved

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Reports of suspicious transaction and the inclusion of government officials in the "politically exposed persons" category are part of the reforms to the law.

From a statement by the Legislative Assembly of El Salvador:

A statement of amendments to the Law Against Money and Asset Laundering, was adopted at the plenary session on Thursday, with 72 votes in order to harmonize the law of El Salvador with international standards on combating money laundering, terrorist financing, organized crime, drug trafficking and all its variants.

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The Salvadoran Foundation for Economic and Social Development (FUSADES) requested that the Legislature take into account the reforms recommended by the Caribbean Financial Action Task Force (Gafic) to the Anti-Money and Asset Laundering law, as it is a condition required by the U.S. government in order to release funds from FOMILENIO II.

El Salvador: Anti-Money Laundering Law Fell Short  

January 2014

President Funes signed the Law Against Money and Asset Laundering without noticing the lack of special controls for Politically Exposed Persons.

The special controls for Politically Exposed Persons (PEP), was one of the reforms that was left out because the deputies did not approve it and the President, Mauricio Funes did not suggest it despite this being a recommendation by the Caribbean Financial Action Task Force Group (CFATF by its initials in Spanish).

El Salvador: Reform to Law Against Money Laundering Approved

December 2013

The adoption of the standard was a requirement imposed by the U.S. for the disbursement of the Fomilenio II program.

From a press release issued by the Legislative Assembly of El Salvador:

The National Assembly passed with 83 votes a list of amendments to the Law Against Money and Asset Laundering, ensuring that legislation of El Salvador is in accordance with International Standards on combating money and asset laundering, financing of terrorism, organized crime, drug trafficking and all its variants. The approval of these modifications also complies with the recommendations of the Financial Action Task Force (GAFT by its initials in Spanish).

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