El Salvador

New Documents

U.S. Vice President Joe Biden issued a joint statement with the presidents of El Salvador, Guatemala and Honduras concerning the fight against transnational criminal organizations, economic challenges and security issues.

The Organisation for Economic Co-operation and Development’s Global Forum on Transparency and Exchange of Information for Tax Purposes evaluated El Salvador’s regulatory framework for tax transparency and concluded that the country has an overall rating of largely compliant.

Enforcement Actions

0 Items Found


Important Facts

  • The U.S. State Department labels El Salvador as a major money laundering country. The country's financial intelligence unit was reinstated in the Egmont Group after demonstrating compliance with international standards, which provides Salvadoran institutions increased access to financial intelligence from foreign partners. El Salvador's dollarized economy and geographic location make it an ideal haven for transnational organized crime groups, including human smuggling and drug trafficking organizations. Money laundering in El Salvador is primarily related to the proceeds of illegal narcotics and organized crime. The following mechanisms are the most often used to launder funds: the use of front companies, travel agencies, remittances, the import and export of goods, and cargo transportation. Illicit activity includes the use of smurfing operations, whereby small amounts of money are deposited or transferred in a specific pattern to avoid detection by government authorities, often in connection with narcotics activities in Guatemala. Also, the free movement of citizens across borders with Guatemala, Honduras and Nicaragua creates a vulnerability for the cross-border movement of contraband and illicit proceeds of crime. Due to a lack of regulation, accountants, auditors, casinos, pawn shops and other designated non-financial businesses and professions do not file suspicious activity reports. El Salvador’s major money laundering convictions to date relate to ex-president Antonio Saca and his associates who diverted approximately $260 million of government funds into secret accounts, then through businesses owned by himself or co-conspirators.
-Source: 2020 International Narcotics Control Strategy Report (INCSR)

Rankings

FATF i

Technical Effectiveness
Compliant : 10 High :
Largely Compliant : 12 Substantial :
Partially Compliant : 18 Moderate :
Non-Compliant : 9 Low :

BASEL i

Rank : 86/141
Score : 4.87/10

TRANSPARENCY INTERNATIONAL i

Rank : 113/180
Score : 34/100

Tax Justice Network i

Rank : 85/133
Score : 64/100