Monday, March 3, 2008

US slams Venezuela on money laundering

US slams Venezuela on money laundering
1 March 2008

The US Department of State, in its just-released 2008 International Narcotics Control Strategy Report has, in uncharacteristically direct language, pointed out both Venezuela's central drug trafficking role, and its utter failure to rein in rampant and systemic money laundering and corruption. The recent wave of abrupt closures of bank accounts of Venezuelans by prudent bankers in North America and in Western Europe will most certainly increase when they read the salient portions of this report, which clearly places the country, and its nationals, in the category of constituting an unacceptable risk for any financial institution wishing to keep its banking license. We excerpt some of the more important sections of the document for the benefit of our readers.
Please note that these are all direct quotes; they have not been edited in any way:
Venezuela is one of the principal drug-transit countries in the Western Hemisphere, with an estimated 250 metric tons of cocaine passing through the nation annually.
Venezuela's proximity to drug producing countries, weaknesses in its anti-money laundering regime, refusal to cooperate with the United States on counter-narcotics activities, and rampant corruption throughout the law enforcement, judicial, banking and banking regulatory sectors continue to make Venezuela vulnerable to money laundering.
The main sources of money laundering are from proceeds, generated by cocaine and heroin trafficking organizations and the embezzlement of dollars from the petroleum industry.
In spite of the advances made with the passage of the Organic Law against Organised Crime in 2005, major gaps remain. Two years after promulgation, not a single case has been tried under the new law.
Widespread corruption within the judicial and law enforcement sectors also undermines the effectiveness of the law as a tool to combat the growing problem of money laundering.
Terrorist financing is not a crime in Venezuela.
There have been only three money laundering convictions in Venezuela since 1993, and all of them were narcotics-related.
There were no prosecutions or convictions for money laundering in 2007, and this is unlikely to change in 2008.
If the Government of Venezuela does not criminalise the financing of terrorism, the Unidad Nacional de Inteligencia Financiera [Venezuela's Financial Intelligence Unit] faces suspension from the Egmont Group in June 2008.I suggest that this list should be posted on the wall outside every bank in Venezuela, so that the customers will read it, promptly close all their accounts, and refuse to do business with a banking sector that allows such a situatuion to exist.

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