Anti Money Laundering (AML) in Colombia
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|The Government of Colombia is a regional leader in the fight against money laundering. Nevertheless, the laundering of money from Colombia’s illicit cocaine and heroin trade continues to penetrate its economy and affect its financial institutions. In addition to drug-related money laundering, laundered funds are also derived from commercial smuggling for tax and import duty evasion, kidnapping for profit, arms trafficking, and terrorism connected to violent paramilitary groups and guerrilla organizations.
While Colombia is not a regional financial center, the banking sector is mature and well regulated. Comprehensive AML regulations, as well as international cooperation on AML organizations, have allowed the government to refine and improve its ability to combat financial crimes and money laundering. Law 526 of 1999 established Colombia’s Financial Intelligence Unit (FIU), the Financial Information and Analysis Unit (Unidad de Información y Análisis Financiero or UIAF). However, money laundering is still a problem, and the UIAF has identified more than 44 techniques for laundering money.
Financial institutions are required by law to maintain records of account holders and financial transactions for five years. Secrecy laws have not been an impediment to bank cooperation with law enforcement officials, since under Colombian law there is a legal exemption to client confidentiality when a financial institution suspects money laundering activity. General negligence laws and criminal fraud provisions ensure the financial sector complies with its responsibilities while protecting consumer rights. Obligated entities are supervised by the Financial Superintendent. In June 2008, the Financial Superintendent issued a circular effective October 2008, further tightening financial reporting requirements for the financial, insurance and securities sectors with strict deadlines for submitting regular transaction reports.
The Economy of Colombia
Colombia’s economy experienced significant growth from 2002 until 2007, chiefly due to rising commodity prices, advancements in domestic security, and President Uribe’s premarket economic policies. Recently, Colombia has witnessed record levels of foreign investment.
Inequality, underemployment and drug trafficking remain significant challenges to the Colombian economy. Although economic growth faltered in 2008, resulting from the global financial crisis and a weakening demand for Colombian exports, the United States and Venezuela remain Colombia’s largest trading partners.
Banking in Colombia
Banco de la República is the Central Bank of Colombia, charged with the tasks of issuing and administering Colombia’s legal currency. Colombia’s Central Bank also control’s the country’s monetary, credit and foreign exchange systems.
The primary responsibilities of Colombia’s Central Bank include acting as the government’s bank, controlling the issuing of legal tender, receiving allocations of credit and providing loans to the government and commercial banks, directing and managing Colombia’s financial and monetary policy, and carrying out currency transfers with other countries.
Colombia’s Central Bank also works to promote scientific, social and cultural development within Colombia through the creation of financially funded foundations focused on technology, anthropology and many other educational and cultural fields.
The currency of Colombia is the Peso. It originally replaced the Real in 1837 at a rate of 1 peso to 8 reales. Since then, the Peso has been pegged in value to a number of other currencies, including the French Franc in 1871, at a rate of 1 peso to 5 francs, the British Pound in 1907, at a rate of 5 pesos to 1 pound, and most recently, the U.S. Dollar in 1931, at a rate of 1.05 pesos to 1 dollar.
The peso comes in both banknotes and coins. Coins are currently available in 20, 50, 100, 200, and 500 cent pieces. Banknotes are available in 1,000, 2,000, 5,000, 10,000, 20,000, and 50,000 denominations. A 100,000 banknote is slated to be released.
Other Key Statistics of Colombia
Time Zone: UTC-5 (same time as Washington, DC during Standard Time).
Location: Northern South America, bordering the Caribbean Sea, between Panama and Venezuela, and bordering the North Pacific Ocean, between Ecuador and Panama.
Population: 45,644,023 (July 2009 est.).
Labor Force: Approximately 22.4% work in agriculture, 18.8% in industry and 58.8% in services industries. The unemployment rate is 11.8%.
Languages Spoken: Spanish.