El Salvador

New Documents

IMF Examines Risks of Bitcoin Legal Tender in El Salvador

The International Monetary Funds noted that though government e-wallets, such as El Salvador’s Chivo, are important for promoting financial inclusion, they also come with financial stability and integrity risks, along with consumer protection concerns.

February 22, 2022

White House: Northern Triangle Leaders Discuss Cooperation on Transnational Criminal Organizations

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.

September 25, 2016

OECD’s Global Tax Forum Evaluates El Salvador’s Compliance with International Standards

March 14, 2016

OECD: El Salvador Signs Convention on Tax Cooperation

June 1, 2015

OECD: Tax Information Exchange Regulatory Framework in Place for El Salvador

March 16, 2015

News

Weekly Roundup: NatWest Pleads Guilty to AML Breaches, UK Banks Terminate Record Number of Clients, and More

U.S. lawmakers want AML rules for lawyers and real estate agents, Justice Department plans more corporate prosecutions, and more, in the weekly roundup.

October 8, 2021

Weekly Roundup: Binance Withholds AML Cooperation, India Targets Human Hair Exports, and More

OFAC informally clears humanitarian transfers to Afghanistan, U.S. officials fine Chinese bank and Romanian bank, and more, in the weekly roundup.

August 27, 2021

Midweek Roundup: Afghanistan’s Financial System Grinds to Halt, Taliban Orders Banks to Reopen, and More

August 25, 2021

Midweek Roundup: Panama Penalizes Bank of China, Circle Breached US Sanctions, and More

July 28, 2021

Weekly Roundup: Deutsche Bank Accused of Ignoring Ponzi Scheme, Italy Investigates US Hedge Fund’s Insurance Branch, and More

July 23, 2021

Enforcement Actions

0 Items Found

Key Documents

El Salvador Criminalizes Money Laundering (in Spanish)

December 23, 1998

El Salvador Mandates KYC, Transaction Reporting Procedures (in Spanish)

January 31, 2000

El Salvador Provides Instruction on CDD, Threshold Cash Reporting (in Spanish)

July 1, 2013

Important Facts

  • The U.S. State Department labels El Salvador as a major money laundering country. In 2020, the country's Attorney General’s office led efforts to make significant progress in combating money laundering. However, poor regulatory AML and CTF oversight and enforcement results in financial crime vulnerabilities, particularly with respect to designated non-financial businesses and professions (DNFBPs). 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 trafficking, human trafficking, extortion, tax evasion and corruption. Organized crime groups misuse front companies, travel agencies, remittances, the import and export of goods, and cargo transportation to launder illicit funds. Common methods also include 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 DNFBPs do not file suspicious activity reports. The State Department highlights that in 2020, criminal charges were filed in several high-profile money laundering cases, including charges against the former president of the legislative assembly, Sigfredo Reyes.
-Source: 2021 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 : 104/179
Score : 36/100

Tax Justice Network i

Rank : 85/133
Score : 64/100