Anti Money Laundering (AML) in Puerto Rico
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|Puerto Rico is currently a major hub for transactions related to money laundering. Most notably, many money launderers transfer dirty money from the United States (US) through Puerto Rico en route to the Dominican Republic, where it is laundered and then transferred back to multiple countries. The U.S., responsible for monitoring and regulating Anti Money Laundering (AML) activities in Puerto Rico, has recently begun to focus more on the money laundering threats posed by the commonwealth to the U.S.
The Financial Crimes Enforcement Network (FinCEN) serves as the U.S.’s Financial Intelligence Unit (FIU) and subsequently acts as the FIU for Puerto Rico. Recently, FinCEN designated Puerto Rico as a High Intensity Financial Crime Area (HIFCA). The designation of HIFCAs was outlined in the Money Laundering and Financial Crimes Act of 1998 and put into affect as an addition to the Bank Secrecy Act.
The HIFCA program was created to concentrate federal and local law enforcement in specific areas most prone to money laundering activities. Currently, all areas of Puerto Rico are listed as HIFCAs. However, the US has been cracking down on enforcement, including holding banks and other financial institutions responsible for failing to report suspicious activity. For this reason, it is important that all banks and financial institutions implement proper AML training for all of their employees.
The Economy of Puerto Rico
Puerto Rico has one of the strongest and most dynamic economies in the Caribbean region. The commonwealth’s diverse industrial sector has greatly surpassed agriculture as the primary source of economic activity and income. Part of Puerto Rico’s economic success is due to the heavy investment of foreign companies in the region, encouraged by duty-free access to the US and tax incentives.
Recently, Puerto Rico’s economy has faced a slight decline due to the troubles faced by the U.S. economy.
Banking in Puerto Rico
Due to the fact that Puerto Rico is a commonwealth of the U.S., there is no Central Bank in Puerto Rico. Instead, the U.S. Federal Bank acts as Puerto Rico’s Central Bank, regulating Monetary and Credit policies.
The Federal Reserve is the Central Bank of the U.S., created in 1913. The main responsibilities of the Federal Reserve are maintaining monetary policy; ensuring the safety and soundness of the nation’s banking and financial system; maintaining the stability of the financial system and containing systemic risk that may arise in financial markets; and providing certain financial services to the U.S. government, to the public, to financial institutions, to foreign official institutions, and to Puerto Rico.
Puerto Rico's Currency
The currency in Puerto Rico is the United States Dollar (USD) due to the fact that Puerto Rico is a commonwealth country of the US. The Bureau of Engraving and Printing (BEP) issues the USD banknotes and the United States Mint issues all USD coinage. The United States Department of Treasury is in charge of overseeing the production of both departments.
The USD is issued in denominations of 1, 2, 5, 10, 20, 50 and 100 dollar bills, known as ‘pesos’ or ‘dolars’ in Puerto Rico. USD coins are each worth a certain amount of cents, called ‘centavos’ or ‘chavitos’ in Puerto Rico. These coins are commonly issued in a one-cent piece, five-cent piece (ficha or vellons), ten-cent piece and twenty-five cent piece (peseta). There are also fifty-cent pieces and one dollar pieces, but it is rare to see either.
Other Key Statisics of Puerto Rico
Time Zone: UTC-4 (1 hour ahead of Washington, DC during Standard Time).
Location: Caribbean, island between the Caribbean Sea and the North Atlantic Ocean, east of the Dominican Republic.
Population: 3.548 (2014 est.).
Labor Force: Approximately 2.1% works in agriculture, 19% in industry, and 79% in services industries. The unemployment rate is 12%.
Languages Spoken: Spanish and English.
Trade Organizations: Puerto Rico is a member of the World Trade Organization (WTO).