Ecuador

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The Basel Institute on Governance signed a cooperation agreement with one of Ecuador’s prosecutor’s offices, the Procuraduría General del Estado, on combating corruption, money laundering and other financial crimes.

The Basel Institute held a two-day virtual meeting with Ecuador’s Financial and Economic Analysis Unit, focusing on the country’s efforts to combat corruption and other financial crimes.

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Important Facts

  • The U.S. State Department labels Ecuador as a major money laundering country. Located between two major drug-producing countries, Ecuador is a major drug transit country with money laundering frequently committed through trade, commercial activity, and cash couriers. Bulk cash smuggling and structuring are also common activities surrounding the significant transit of illicit cash. In addition, corruption, and a lack of specialized AML expertise in the judiciary, law enforcement and banking regulators hinder Ecuador's efforts to improve AML enforcement and prosecutions. Other persistent money laundering problems in the country are associated with narcotrafficking, real estate transactions, embezzlement, tax fraud, illegal mining, gold smuggling, human trafficking and cross-border commercial activity with Colombia. Despite progress made under President Lenin Moreno’s government, Ecuador needs to implement additional AML/CTF reforms. The country limits law enforcement’s ability to investigate and prosecute money laundering charges against bulk cash smugglers by requiring that they prove that the money came from illicit activity. The State Department notes that officials under investigation for money laundering frequently flee Ecuador until the statute of limitations expires. Ecuador has suspicious transaction reporting requirements and enhanced due diligence for politically exposed persons. Public officials are prohibited from maintaining assets in countries designated as tax havens. In 2020, the country's financial intelligence unit referred 10 possible money laundering cases to law enforcement authorities, though the country does not publicize statistics on money laundering-related prosecutions and convictions.
-Source: 2021 International Narcotics Control Strategy Report (INCSR)

Rankings

FATF i

Technical Effectiveness
Compliant : 1 High :
Largely Compliant : 13 Substantial :
Partially Compliant : 29 Moderate :
Non-Compliant : 6 Low :

BASEL i

Rank : 84/141
Score : 4.89/10

TRANSPARENCY INTERNATIONAL i

Rank : 92/179
Score : 39/100

Tax Justice Network i

Rank : 120/133
Score : 47/100