The housing market, casinos, concert halls, and the livestock sector are all used to launder money in Central American countries.
Excerpted from the report "International Narcotics Control Strategy Report, Volume II, Money Laundering and Financial Crimes" by the US State Department:
Costa Rica Transnational criminal organizations continue to favor Costa Rica as a base to commit financial crimes due to its location and limited enforcement capability. Costa Rica’s government has attempted to strengthen the legal framework for supervision and enforcement; however, challenges remain in mitigating money laundering risks. Costa Rica is a transit point that is also increasingly used as an operations base for narcotics trafficking; and significant laundering of proceeds from illicit activities continues. Costa Rica should continue to close financial crimes legislative gaps and allocate resources for investigation and prosecution.
The figure is an estimate made by the Intelligence Directorate in Costa Rica released by the US State Department, along with information that indicates a rise in criminal organizations based in the country, and little capacity to combat them.
Money laundering is a criminal activity that handles amounts that are difficult to measure. For example, the report "Illicit Financial Flows from Developing Countries: 2004-2013" by Global Financial Integrity says that during the aforementioned 10 year period, the flow of illicit money from Costa Rica exceeded $11 billion, that is about $1.1 billion a year.
If emergency measures are not taken, Central America will soon collapse into failed states dominated by criminal organizations who are able to buy political power.
This is the dramatic but realistic conclusion reached by a study on the subject carried out by a coalition of Guatemalan institutions composed of the Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations (CACIF), the National Economic Research Center (CIEN) the Foundation for the Development of Guatemala (FUNDESA) and Fundación G.
The majority of Central American nations are perceived as being the most corrupt in Latin America.
The Index of Corruption Perception created by Transparency International, ranks Honduras, Guatemala and Nicaragua in the list of countries perceived as the most corrupt.
Honduras is ranked at number 140, while Nicaragua and Guatemala are located in positions 127 and 123, respectively.
World Bank statistics show that every day, about $1.3 billion are paid in bribes related to state contracts.
The figures were mentioned by Michael Kramer, a consultant at the entity, who is taking part in the forum "Preventing and combating corruption and collusion in public procurements", taking place in Panama.
"... In addition to cash bribes for the award of contracts in recent years the practice has spread to awarding projects to companies created by officials," reported Prensa.com. Sometimes they are consultancies or suppliers that have no references or physical offices.
The phenomenon affects much of Latin America, whose countries spend on average 8% of their GDP on security costs.
That was the conclusion reached during the forum "Connecting businesses as partners for prosperity with security in the Americas", organized by the Organization of American States (OAS) and the private sector, under the framework of the Guatemala Investment Summit.
The lack of government capacity and economic power disadvantage compared to the drug industry, has lead to an increase in violence and corruption.
"Using systematic violence and corruption, intimidation and extortion of public officials, the wealthy and powerful criminal groups have been able to weaken police and judicial systems. They often use violence to threaten or punish anonymous complainants.
An ex President, high ranking public officers and distinguished businessmen are sentenced for corruption and peculation in Costa Rica.
When justifying the sentence, the judges told of how a group of powerful politicians from a prominent party conformed a criminal gang which developed an entire operation using assets of the State, among them Legislative Assembly and Social Security, to make money with illegal commissions paid by foreign and domestic dishonest businessmen.