The Risk of Money Laundering in Central America

Panama and Nicaragua are among the ten countries in Latin America with the highest risk of money laundering, according to the Basel Institute of Governance.

Friday, August 25, 2017

The anti-money laundering index (AML) prepared by the Basel Institute of Governance places Panama in fourth place in the list of countries with the highest risk of money laundering and financing of terrorist activities in Latin America and the Caribbean. 

Panama is surpassed only by Paraguay, Haiti and Bolivia, according to the index. 

Central America is closely followed by Nicaragua, in the eighth position, ahead of Guatemala, which is ranked 14th in the list of Latin American countries. 

Honduras (16), Costa Rica (18) and El Salvador (21) received lower scores, and although they are countries prone to money laundering, according to the Basel Institute of Governance, the risk is lower than in the aforementioned countries. 

According to the Basel Institute of Governance,   "... While most countries legally comply with current rules to combat money laundering and terrorist financing, many countries are short on compliance (sometimes severely short) in terms of effective implementation and compliance with those laws."

"...  By including data from the FATF, which in recent years has used an evaluation methodology that focuses not only on technical compliance but also on law enforcement capacity, the Basel AML Index is increasingly able to capture this significant difference."

See details on the AML index complied by the Basel Institute of Governance.

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More on this topic

Money Laundering: Panama and Nicaragua Join the List

May 2020

The European Commission announced that the two Central American countries are on the list of nations with deficiencies in their anti-money laundering and anti-terrorist financing strategies.

Bahamas, Barbados, Botswana, Cambodia, Ghana, Jamaica, Mauritius, Mongolia, Myanmar/Burma, Nicaragua, Panama and Zimbabwe are the countries included in the list, the European Commission reported.

Panama Does Not Want to Be a "High Risk" Country

February 2019

The Varela administration rejects the European Commission's proposal to include the country in a list of high-risk countries with strategic deficiencies in the struggle against money laundering and terrorism.

Considering that the publication issued today by the European Commission must be submitted to the European Parliament for approval within one month, which may be extended, the Government of Panama announced that it will continue its efforts to establish a communication channel to clarify the Commission's concerns.

Guatemala: What is Lacking in Money Laundering Prevention

November 2016

Gafilat has identified the outstanding tasks needed to bring up to date matters relating to financing terrorism, control of casinos and the inclusion of lawyers in the Mandated Persons category.

The ruling was made by the Financial Action Task Force for Latin America (Gafilat), who released the Mutual Evaluation Report, up to the date of the in situ visit made between November 23 and December 4, 2015.

Panama and Nicaragua on the OECD Gray List

July 2014

The two nations have been included in the list of countries with deficiencies in the fight against money laundering and terrorist financing.

The Financial Action Group, assigned to the Organization for Economic Cooperation and Development noted that Panama and Nicaragua are in breach of the recommendations that the agency provides to improve controls for preventing money laundering in the financial system.

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