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*Please note that FATF deems that a country has significant aml deficiencies if
any of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated
either Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
any of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated
either Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
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Sanctions:
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
Yes, but no further information currently available.
____________________________________________________
US State Department Money Laundering Report - 2012:
The Government of Colombia (GOC) is a regional leader in the
fight against money laundering and terrorist financing. The GOC
has a forceful anti-money laundering/counter-terrorist financing
(AML/CFT) regime; however, the laundering of money from
Colombia’s illicit cocaine and heroin trade continues to penetrate
its economy and affect its financial institutions. Laundered funds
also are derived from commercial smuggling for tax and import
duty evasion; kidnapping; arms trafficking; and terrorism
connected to violent, illegally-armed groups and guerrilla
organizations, including U.S. Government-designated terrorist
organizations.
Both drug and money laundering organizations use a variety of
methods to repatriate their illicit proceeds to Colombia. These
methods include the Black Market Peso Exchange (BMPE), bulk
cash smuggling, wire transfers, remittances, smuggled
merchandise (contraband) and more recent methods, such as
through the securities markets (both U.S. and Colombian),
casinos, electronic currency and prepaid debit cards as well as
illegal mining. Criminal elements have used the banking sector,
and Colombian money brokers, primarily concentrated in Bogota,
but also in Medellin and Cali, are additional entities that facilitate
money laundering activities. The trade of counterfeit items in
violation of intellectual property rights is an ever increasing
method to launder illicit proceeds. Casinos, free trade zones
(FTZs) and the postal money order market in Colombia present
opportunities for criminals to take advantage of inadequate
regulation and transparency.
Money laundering also has occurred via trade and the non-bank
financial system, especially transactions that support the informal
or underground economy. Trade-based money laundering by
Colombian organizations with connections to Mexico, China,
Ecuador, Peru and Panama has grown exponentially in recent
years. In the BMPE, or trade-based money laundering scheme,
goods from abroad (China has replaced the United States) are
bought with drug dollars. Many of the goods are either smuggled
into Colombia or brought directly into Colombia’s customs
warehouses, thus avoiding various taxes, tariffs and legal customs
duties. In other trade-based money laundering schemes, goods
are over-or-under invoiced to transfer value. According to people
who have worked for years in the BMPE industry, evasion of the
normal customs charges is frequently facilitated through the
corruption of Colombian oversight authorities by the drug and
money laundering groups.
Official corruption has also aided money laundering and terrorist
financing in geographic areas controlled by the Revolutionary
Armed Forces of Colombia (FARC). Although corruption of
government officials remains a problem, President Juan Manuel
Santos has taken a hard line on corruption and has demonstrated
that he is serious about punishing corrupt officials at the highest
level. Since Santos entered office, four former ministers, three
former security directors of the Administrative Department, and
other government officials have been dismissed from office, taken
to court, or jailed.
In 2005, Colombia’s Congress passed a comprehensive FTZ
modernization law that opens investment to international
companies, allows one-company or stand-alone FTZs, and
permits the designation of pre-existing plants as FTZs. As of
September 2011, there are 91 FTZs in Colombia. Companies
within FTZs enjoy a series of benefits such as a preferential
corporate income tax rate and exemption from customs duties and
value-added taxes on imported materials. The Ministry of
Commerce administers requests for establishing FTZs, but the
government does not participate in their operation. The DIAN
(Colombia’s Tax and Customs Authority), regulates activities and
materials in FTZs, and there are identification requirements for
companies and individuals who enter or work in the FTZs. The
Santos Administration is revising the FTZ and tax exemption
scheme in order to limit their use in the near future.
For additional information focusing on terrorist financing, please
refer to the Department of State’s Country Reports on Terrorism,
which can be found here: http://www.state.gov/j/ct/rls/crt/
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: YES
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: List approach
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: NO
Domestic: NO
KYC covered entities: Banks, stock exchanges and brokers,
mutual funds, investment funds, export and import intermediaries,
credit unions, wire remitters, money exchange houses, public
agencies, notaries, casinos, lottery operators, car dealers, and
foreign currency traders
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 4,904 January through
August 2011
Number of CTRs received and time frame: 98,076 January
through August 2011
STR covered entities: Banks, securities broker/dealers, trust
companies, pension funds, savings and credit cooperatives,
depository and lending institutions, lotteries and casinos, vehicle
dealers, currency dealers, importers/exporters and international
gold traders
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: 115 in 2010
Convictions: 95 in 2010
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
Colombia is a member of GAFISUD, a Financial Action Task Force
(FATF)-style regional body. Its most recent mutual evaluation can
be found here: http://www.gafisud.
info/pdf/InformedeEvaluacinMutuaRepblicadeColombia_1.pdf
Enforcement and implementation issues and comments:
The Government of Colombia continues to make progress in the
development of its financial intelligence unit, regulatory framework
and interagency cooperation within the government. However,
referrals from the Colombian UIAF (Financial Intelligence Unit) to
the public ministry for ML/TF cases substantially decreased in
2011 and therefore prosecutions have decreased as well. Placing
greater focus and priority on money laundering investigations,
including increasing resources and training, will be necessary to
ensure continued and improved progress. The GOC should take
steps to foster better interagency cooperation, including
coordination between the UIAF, Colombia’s financial intelligence
unit; National Police; Colombia’s Trade Transparency Unit; and
the tax and customs authority in order to combat the growth in
contraband trade to launder illicit drug proceeds. Congestion in
the court system, procedural impediments, and corruption remain
problems that need to be addressed.
Colombian law lists specific predicate crimes upon which it bases
money laundering violations. The included crimes generally
involve illegal armed groups and criminal syndicates and their
related activities.
The Colombian legal system has evolved with the introduction of
the adversarial oral system. Related to this, the Prosecutor
General’s Office (Fiscalia), has undergone a transformation that
has resulted in the loss of significant institutional knowledge and
professional ability. This has been due, in large part, to a court
decision requiring staffing changes whereby many experienced
prosecutors were let go and new hires replaced them. The office
is in the process of reconstructing its capabilities, but its
effectiveness has been affected..
The Colombian Superintendency of Companies
(SuperSociedades) has been working on new anti-money
laundering regulations and know-your-customer regulations for
the private sector that should be announced by the end of 2011.
While the Colombian financial system has banking controls and
government regulatory processes in place, it is reported that drug
and money laundering groups have influenced high level bank
officials in order to circumvent both established anti-money
laundering controls and government regulations.
Colombian law is unclear on the government’s authority to block
assets of individuals and entities on the UN 1267 Sanctions
Committee’s consolidated list. Banks are able to close accounts,
but not to seize assets. Colombian law should be clarified to spell
out the government’s authority to block assets of individuals and
entities on the UN 1267 Sanctions Committee’s consolidated list.
The GOC should put in place streamlined procedures for the
liquidation and sale of seized assets under state management
and should revise procedures to permit expedited forfeiture of
seized assets. A five to 15 year time frame for forfeiture opens
opportunities for waste, fraud and abuse while limiting the
deterrent effect that could result from rapid asset forfeiture.
Colombian prosecutors could take steps to not only seize the
physical assets (real property) of narcotics traffickers but also
seize their bank accounts in Colombia. This element is frequently
not a part of regular Colombian asset seizure operations. In
addition, the GOC should increase the number of judges that
oversee asset forfeiture and money laundering cases to expedite
the judicial process.
The GOC works extensively with U.S. law enforcement agencies to
identify, target and prosecute groups and individuals engaged in
financial and drug crimes. The GOC should explore steps to foster
increased cooperation between the UIAF and the U.S. Treasury
Department’s Financial Crimes Enforcement Network (FinCEN)
and Office of Foreign Assets Control (OFAC) as case exchanges
substantially decreased in 2011.
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
Colombia remains one of the world’s largest producers and
exporters of cocaine, as well as a source country for heroin and
marijuana. According to the U.S. Department of Justice’s 2010
Cocaine Signature Program, 95.5 percent of the cocaine seized in
the United States in their sampling system originates in Colombia.
Colombia’s marijuana is typically not sent to the United States, but
feeds internal and Latin American consumption. The Government
of Colombia (GOC) continues to make significant progress in its
fight against the production and trafficking of illicit drugs. The
United States Government (USG) found that the area devoted to
coca cultivation in 2010 was down 14 percent compared to 2009,
from 116,000 to 100,000 hectares (ha). Crediting sustained aerial
and manual eradication operations and aggressive enforcement
activity in 2010, the USG also reported a decline in potential pure
cocaine production of 7.4 percent, from 290 metric tons (MT) in
2009 to 270 MT in 2010 – and a 61.4 percent drop from the 700
MT estimated pure cocaine production potential in 2001.
The United Nation’s (UN) 2010 assessment of the drug problem
in Colombia reflected a similar trend from 2009 to 2010. The UN
Office for Drug Control (UNODC) estimates that in 2010, coca
area under cultivation fell 15 percent to 62,000 from 73,000 ha,
and cocaine production potential dropped 19 percent to 330 MT
from 410 MT. Although estimates differ due to dissimilar
methodologies, both reflect a similar declining trend in coca
cultivation and cocaine production potential.
In 2011, the GOC continued its aggressive interdiction and
eradication programs, and maintained a strong extradition record
for persons charged with crimes in the United States. The GOC
extradited 119 fugitives to the United States in 2011, the vast
majority of which were wanted for drug crimes. According to the
GOC, authorities seized over 186 MT of cocaine and cocaine
base and eliminated hundreds of tons of additional potential
cocaine through the combined aerial and manual eradication of
137,794 ha of coca. The GOC also continued to address
increasing domestic drug consumption, and raised the profile of
drug prevention and treatment efforts.
The GOC continued to apply pressure to the Revolutionary Armed
Forces of Colombia (FARC) and the National Liberation Army
(ELN), which maintain considerable control in areas with high
concentrations of coca and opium poppy cultivation. In 2011,
Colombian security forces captured or killed many high value
targets, including the FARC supreme commander Guillermo León
Sáenz Vargas, alias Alfonso Cano, the leader of the FARC since
2008, FARC 48th Front finance chief Olidem Romel Solarte Ceron,
alias Oliver Solarte, the drug trafficking kingpin of southern
Colombia, and FARC 30th Front commander Jorge Naphtali
Umenza Velasco, alias “Mincho,” the drug trafficking kingpin of
Colombia’s Pacific coast.
Colombia continues to see a rise in criminal organizations known
as “bandas criminales” or BACRIMs, which have become a major
law enforcement challenge. These groups include members of
former paramilitary groups and are active throughout much of the
country -- competing and sometimes cooperating with the FARC in
the drug trade. For example, the largest BACRIM organization,
“los Rastrojos,” has traceable cooperative agreements with both
the ELN and the FARC in southern Colombia. The violence
associated with the BACRIMs has spilled over into many of
Colombia’s major cities, leading to an increase in the murder rates
within some urban centers and the mass displacement of
thousands of rural citizens in 2011. In 2011, President Juan
Manuel Santos announced a comprehensive strategy to combat
the increasingly powerful BACRIM. The strategy identified
overarching themes to attack the BACRIM and detailed how
various government agencies would coordinate efforts, but it did
not designate additional resources to confront the problem.
Colombia is a party to the 1988 UN Drug Convention.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 1)
Colombia is a major source country for women and girls subjected
to sex trafficking in Latin America, the Caribbean, Western
Europe, Asia, and North America, including the United States, as
well as a transit and destination country for men, women, and
children subjected to forced labor. Within Colombia, some men
and children are found in conditions of forced labor in mining and
agriculture, and the sex trafficking of women and children from
rural areas into urban areas remains a significant problem. Some
women and children are subjected to domestic servitude, and
NGOs reported that forced begging was a problem in urban
areas. Groups at high risk for internal trafficking include displaced
persons, poor women in rural areas, indigenous communities, and
relatives of members of criminal organizations. Continued armed
violence in Colombia has displaced many communities, making
them vulnerable to human trafficking. Some Ecuadorian children,
many of them indigenous, are subjected to forced labor and sex
trafficking in Colombia. Illegal armed groups forcibly recruit
children to join their ranks; an international organization estimates
that at least 10,000 children participate in illegal armed groups.
Members of gangs and organized criminal networks force
relatives, acquaintances, and displaced persons – typically women
and children – into conditions of sex trafficking and forced labor,
including in the illegal drug trade. Colombia is a destination for
foreign child sex tourists from the United States and Europe,
particularly to coastal cities such as Cartagena and Barranquilla.
Migrants from South America, Africa, and China transit Colombia
en route to the United States and Europe; some may fall victim to
traffickers.
The Government of Colombia fully complies with the minimum
standards for the elimination of trafficking in persons. During the
reporting period, the government maintained law enforcement
actions against transnational sex trafficking offenders, achieved
its first conviction for forced labor, and continued robust
prevention efforts. The government worked with NGOs and
international organizations to provide adult trafficking victims with
services; however, it did not fund specialized shelters or services
for trafficking victims. Authorities did not utilize formalized
procedures to proactively identify trafficking victims among
vulnerable populations. The significant number of Colombians
trafficked abroad as well as internally reflects the continued need
for dedicated funding for comprehensive victim services.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: The Colombian government continued its vigorous
military, law enforcement, intelligence, and economic measures
against the Revolutionary Armed Forces of Colombia (FARC), the
National Liberation Army (ELN), and remaining elements of the
demobilized United Self-Defense Forces of Colombia (AUC).
Colombia continued to increase its international counterterrorism
cooperation and training efforts. As of October 31, the Colombian
government reported that more than 2,000 members of the FARC
and ELN demobilized in 2010, more than 1,500 were captured,
and more than 400 were killed in military or police operations.
2010 Terrorist Incidents: Despite its weakened state, the FARC
still numbered approximately 8,000 members, and continued
terrorist attacks, extortion, and kidnapping. The group increased
its use of land mines, ambushes, snipers, and improvised
explosive devices (IEDs). The FARC also used non-uniformed
militia members to carry out terrorist attacks, especially in more
populated areas. The FARC continued narcotics trafficking
activities, bombed military and civilian targets in urban areas, and
targeted rural outposts, police stations, infrastructure, and local
political leaders. The Colombian government reported that 391
members of the military and police forces were killed in the first 10
months of 2010, while 1,681 were injured and another 211 were
injured or killed by land mines. Some independent Colombian
organizations reported higher 2010 public security force casualty
figures.
Examples of 2010 terrorist activity attributed to the FARC included:
* On February 13, the FARC ambushed gubernatorial candidate
Jose Alberto Perez near San Jose de Guaviare, injuring him and
killing four police officers.
* On March 24, the FARC detonated a powerful car bomb on a
crowded street in downtown Buenaventura, Valle del Cauca
Province, next to the offices of the prosecutor general and the
mayor. Ten were killed in the attack, and more than 50 were
wounded.
* On March 25, the FARC convinced an unsuspecting 12-year-old
to carry an explosive device to a police station in Charco, Nariño
Province. The FARC detonated the bomb, killing the child and
wounding five others, including two police officers.
* On August 12, the FARC detonated a powerful car bomb in north
Bogota in front of the Caracol Media Building, injuring nine
civilians and causing significant property damage.
* On September 1, a sophisticated FARC roadside IED attack and
ambush killed 14 Colombian National Police officers and wounded
nine others unit near Doncello, Caqueta Province.
* On November 30, the FARC tricked a bus driver into carrying a
powerful bomb in Vegalarga, Huila, and detonated the explosive
while it was parked in front of a police station, killing the driver,
and wounding 10 police officers and a civilian.
The ELN remained active with approximately 1,250 fighters, but
with diminished resources and a reduced capability. Still, the ELN
continued to inflict numerous casualties on the Colombian military
through use of land mines and ambushes. The ELN financed its
operations through drug trafficking, kidnapping, and extortion.
Reaffirming their pact of non-aggression announced in December
2009, there was some increase in the FARC and ELN level of
cooperation against Colombian security forces in 2010, but long-
existing rivalries remained in many areas.
Legislation and Law Enforcement: The Colombian government
continued vigorous military, law enforcement, intelligence, and
economic measures against the FARC, ELN, and remaining
elements of the demobilized AUC. Extradition to the United States
remained an important tool for bringing drug traffickers and
terrorists to justice. Colombia extradited 148 defendants to the
United States in 2010 for prosecution, and 1,200 have been
extradited since July 4, 1991; most were Colombian nationals. The
Colombian government sought to extend the legislation allowing
for individual demobilizations from these terrorist groups, and
proposed legislation to address legal issues associated with the
earlier demobilization of approximately 17,000 of the over 32,000
demobilized members of the AUC.
On September 23, the Colombian government announced that
FARC Secretariat member and Eastern Bloc commander Victor
Julio Suarez Rojas (alias “Mono Jojoy”) was killed in a joint police
and military operation. Mono Jojoy had more than a dozen
convictions and 60 orders for capture for terrorism, murder, drug
trafficking, kidnapping, and forcible recruitment of minors. He had
also been indicted for the March 1999 killing of three U.S. citizens
(Ingrid Washinawatch, Kah’ena’e Gay, and Terence Freitas). On
June 13, Colombian forces rescued three Colombian police and
one Army hostage who had been held captive by the FARC for
nearly 12 years. Although the FARC’s supreme commander,
Guillermo León Sáenz (alias “Alfonso Cano”), evaded capture,
Colombian security forces also captured or killed a number of mid-
level FARC leaders during the year.
Public forces continued to debrief terrorist group deserters for
detailed information on their respective units, and reduced the
amount of territory where terrorists could freely operate. The
Colombian military and police destroyed caches of weapons and
supplies, and reduced the groups’ financial resources through
counternarcotics operations.
Colombia participated in the Megaports and Container Security
Initiatives.
Countering Terrorist Finance: Colombia cooperated with the
United States to block terrorists' assets, and Colombian
authorities and police carried out several operations during the
year to arrest and charge financial support networks of the FARC.
Aerial and manual eradication of illicit drugs in Colombia
destroyed approximately 143,000 hectares of illegal drug crops as
of December 3, thus depriving terrorist groups of potentially huge
profits. All Colombian financial institutions immediately close drug
trafficking and terrorism-related accounts on Colombian
government orders or in response to sanctions designations by
the United States. The Colombian financial sector is proactive in
the filing of Suspicious Activity Reports (SARs) with the Colombian
Financial Intelligence Unit (UIAF), and the Colombian government
has now extended its SAR requirements to casinos, public
notaries, and other non-financial sectors.
The United States carried out two major designation actions
against over 100 financial targets associated with narcotics
traffickers and money launderers tied to the FARC pursuant to the
Foreign Narcotics Kingpin Designation Act. Both actions were tied
to ongoing Colombian money laundering investigations of the
same targets. In June, UIAF hosted the annual Egmont plenary for
more than 100 member financial intelligence units worldwide in
Cartagena, Colombia, which recognized Colombia’s global role
and regional leadership in efforts to investigate and analyze
money laundering and terrorist financing cases.
Regional and International Cooperation: The Colombian
government expanded its role as a regional leader in
counterterrorism, continued to seek enhanced regional
counterterrorism cooperation to eliminate terrorist safe havens in
vulnerable border areas, and provided counterterrorism training
to officials from partner countries across the region. Colombia and
Mexico significantly increased joint training and operations against
narco-terrorist organizations operating in both countries.
Colombia enjoyed positive relations with and cooperated on
border security with Panama, Peru, and Brazil.
Colombia and Ecuador formally restored diplomatic relations in
December, which Ecuador had broken in March 2008 following a
Colombian military attack against a FARC camp inside
Ecuadorean territory. Relations with Venezuela deteriorated in the
first half of 2010, with Colombia publicly accusing the Venezuelan
Government of harboring and aiding top FARC and ELN leaders
in its territory. Relations with Venezuela were restored, however,
after Colombian President Juan Manuel Santos took office in
August. In November, the Venezuelan government extradited one
FARC and two ELN members to Colombia.
Countering Radicalization and Violent Extremism: The Colombian
government maintained strategic communications aimed at
countering terrorist propaganda and sought to increase individual
demobilizations. The government proposed potentially
transformative legislative agenda on victims and land restitution,
and began implementing an initial plan to return and formalize
land for 130,000 families.
The Colombian government continued to process and investigate
demobilized AUC members under the Justice and Peace Law
(JPL), which offers judicial benefits and reduced prison sentences
for qualifying demobilizing terrorists. The law requires all
participants to confess fully to their crimes as members of a
terrorist group and to return all illicit profits. More than 32,000
rank-and-file ex-AUC members who did not commit serious crimes
have demobilized, and many were receiving benefits through the
government’s reintegration program, including psychosocial
attention, education, healthcare, and career development
opportunities. Three senior leaders of the AUC have been
convicted and sentenced to eight years in prison under the JPL
process. Over 160,000 victims have registered under JPL,
although Colombian government efforts to create measures to
provide reparations to victims stalled. Some former paramilitaries
continued to engage in criminal activities after demobilization,
mostly in drug trafficking. The Colombian government refers to
these criminal groups as criminal bands, and estimated their
membership at more than 3,500, while non-governmental
organizations estimate membership at 6,000 or more.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
Unidad de Informacion y Analisis Financiero (UIAF)
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
Yes, but no further information currently available.
____________________________________________________
US State Department Money Laundering Report - 2012:
The Government of Colombia (GOC) is a regional leader in the
fight against money laundering and terrorist financing. The GOC
has a forceful anti-money laundering/counter-terrorist financing
(AML/CFT) regime; however, the laundering of money from
Colombia’s illicit cocaine and heroin trade continues to penetrate
its economy and affect its financial institutions. Laundered funds
also are derived from commercial smuggling for tax and import
duty evasion; kidnapping; arms trafficking; and terrorism
connected to violent, illegally-armed groups and guerrilla
organizations, including U.S. Government-designated terrorist
organizations.
Both drug and money laundering organizations use a variety of
methods to repatriate their illicit proceeds to Colombia. These
methods include the Black Market Peso Exchange (BMPE), bulk
cash smuggling, wire transfers, remittances, smuggled
merchandise (contraband) and more recent methods, such as
through the securities markets (both U.S. and Colombian),
casinos, electronic currency and prepaid debit cards as well as
illegal mining. Criminal elements have used the banking sector,
and Colombian money brokers, primarily concentrated in Bogota,
but also in Medellin and Cali, are additional entities that facilitate
money laundering activities. The trade of counterfeit items in
violation of intellectual property rights is an ever increasing
method to launder illicit proceeds. Casinos, free trade zones
(FTZs) and the postal money order market in Colombia present
opportunities for criminals to take advantage of inadequate
regulation and transparency.
Money laundering also has occurred via trade and the non-bank
financial system, especially transactions that support the informal
or underground economy. Trade-based money laundering by
Colombian organizations with connections to Mexico, China,
Ecuador, Peru and Panama has grown exponentially in recent
years. In the BMPE, or trade-based money laundering scheme,
goods from abroad (China has replaced the United States) are
bought with drug dollars. Many of the goods are either smuggled
into Colombia or brought directly into Colombia’s customs
warehouses, thus avoiding various taxes, tariffs and legal customs
duties. In other trade-based money laundering schemes, goods
are over-or-under invoiced to transfer value. According to people
who have worked for years in the BMPE industry, evasion of the
normal customs charges is frequently facilitated through the
corruption of Colombian oversight authorities by the drug and
money laundering groups.
Official corruption has also aided money laundering and terrorist
financing in geographic areas controlled by the Revolutionary
Armed Forces of Colombia (FARC). Although corruption of
government officials remains a problem, President Juan Manuel
Santos has taken a hard line on corruption and has demonstrated
that he is serious about punishing corrupt officials at the highest
level. Since Santos entered office, four former ministers, three
former security directors of the Administrative Department, and
other government officials have been dismissed from office, taken
to court, or jailed.
In 2005, Colombia’s Congress passed a comprehensive FTZ
modernization law that opens investment to international
companies, allows one-company or stand-alone FTZs, and
permits the designation of pre-existing plants as FTZs. As of
September 2011, there are 91 FTZs in Colombia. Companies
within FTZs enjoy a series of benefits such as a preferential
corporate income tax rate and exemption from customs duties and
value-added taxes on imported materials. The Ministry of
Commerce administers requests for establishing FTZs, but the
government does not participate in their operation. The DIAN
(Colombia’s Tax and Customs Authority), regulates activities and
materials in FTZs, and there are identification requirements for
companies and individuals who enter or work in the FTZs. The
Santos Administration is revising the FTZ and tax exemption
scheme in order to limit their use in the near future.
For additional information focusing on terrorist financing, please
refer to the Department of State’s Country Reports on Terrorism,
which can be found here: http://www.state.gov/j/ct/rls/crt/
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: YES
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: List approach
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: NO
Domestic: NO
KYC covered entities: Banks, stock exchanges and brokers,
mutual funds, investment funds, export and import intermediaries,
credit unions, wire remitters, money exchange houses, public
agencies, notaries, casinos, lottery operators, car dealers, and
foreign currency traders
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 4,904 January through
August 2011
Number of CTRs received and time frame: 98,076 January
through August 2011
STR covered entities: Banks, securities broker/dealers, trust
companies, pension funds, savings and credit cooperatives,
depository and lending institutions, lotteries and casinos, vehicle
dealers, currency dealers, importers/exporters and international
gold traders
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: 115 in 2010
Convictions: 95 in 2010
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
Colombia is a member of GAFISUD, a Financial Action Task Force
(FATF)-style regional body. Its most recent mutual evaluation can
be found here: http://www.gafisud.
info/pdf/InformedeEvaluacinMutuaRepblicadeColombia_1.pdf
Enforcement and implementation issues and comments:
The Government of Colombia continues to make progress in the
development of its financial intelligence unit, regulatory framework
and interagency cooperation within the government. However,
referrals from the Colombian UIAF (Financial Intelligence Unit) to
the public ministry for ML/TF cases substantially decreased in
2011 and therefore prosecutions have decreased as well. Placing
greater focus and priority on money laundering investigations,
including increasing resources and training, will be necessary to
ensure continued and improved progress. The GOC should take
steps to foster better interagency cooperation, including
coordination between the UIAF, Colombia’s financial intelligence
unit; National Police; Colombia’s Trade Transparency Unit; and
the tax and customs authority in order to combat the growth in
contraband trade to launder illicit drug proceeds. Congestion in
the court system, procedural impediments, and corruption remain
problems that need to be addressed.
Colombian law lists specific predicate crimes upon which it bases
money laundering violations. The included crimes generally
involve illegal armed groups and criminal syndicates and their
related activities.
The Colombian legal system has evolved with the introduction of
the adversarial oral system. Related to this, the Prosecutor
General’s Office (Fiscalia), has undergone a transformation that
has resulted in the loss of significant institutional knowledge and
professional ability. This has been due, in large part, to a court
decision requiring staffing changes whereby many experienced
prosecutors were let go and new hires replaced them. The office
is in the process of reconstructing its capabilities, but its
effectiveness has been affected..
The Colombian Superintendency of Companies
(SuperSociedades) has been working on new anti-money
laundering regulations and know-your-customer regulations for
the private sector that should be announced by the end of 2011.
While the Colombian financial system has banking controls and
government regulatory processes in place, it is reported that drug
and money laundering groups have influenced high level bank
officials in order to circumvent both established anti-money
laundering controls and government regulations.
Colombian law is unclear on the government’s authority to block
assets of individuals and entities on the UN 1267 Sanctions
Committee’s consolidated list. Banks are able to close accounts,
but not to seize assets. Colombian law should be clarified to spell
out the government’s authority to block assets of individuals and
entities on the UN 1267 Sanctions Committee’s consolidated list.
The GOC should put in place streamlined procedures for the
liquidation and sale of seized assets under state management
and should revise procedures to permit expedited forfeiture of
seized assets. A five to 15 year time frame for forfeiture opens
opportunities for waste, fraud and abuse while limiting the
deterrent effect that could result from rapid asset forfeiture.
Colombian prosecutors could take steps to not only seize the
physical assets (real property) of narcotics traffickers but also
seize their bank accounts in Colombia. This element is frequently
not a part of regular Colombian asset seizure operations. In
addition, the GOC should increase the number of judges that
oversee asset forfeiture and money laundering cases to expedite
the judicial process.
The GOC works extensively with U.S. law enforcement agencies to
identify, target and prosecute groups and individuals engaged in
financial and drug crimes. The GOC should explore steps to foster
increased cooperation between the UIAF and the U.S. Treasury
Department’s Financial Crimes Enforcement Network (FinCEN)
and Office of Foreign Assets Control (OFAC) as case exchanges
substantially decreased in 2011.
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
Colombia remains one of the world’s largest producers and
exporters of cocaine, as well as a source country for heroin and
marijuana. According to the U.S. Department of Justice’s 2010
Cocaine Signature Program, 95.5 percent of the cocaine seized in
the United States in their sampling system originates in Colombia.
Colombia’s marijuana is typically not sent to the United States, but
feeds internal and Latin American consumption. The Government
of Colombia (GOC) continues to make significant progress in its
fight against the production and trafficking of illicit drugs. The
United States Government (USG) found that the area devoted to
coca cultivation in 2010 was down 14 percent compared to 2009,
from 116,000 to 100,000 hectares (ha). Crediting sustained aerial
and manual eradication operations and aggressive enforcement
activity in 2010, the USG also reported a decline in potential pure
cocaine production of 7.4 percent, from 290 metric tons (MT) in
2009 to 270 MT in 2010 – and a 61.4 percent drop from the 700
MT estimated pure cocaine production potential in 2001.
The United Nation’s (UN) 2010 assessment of the drug problem
in Colombia reflected a similar trend from 2009 to 2010. The UN
Office for Drug Control (UNODC) estimates that in 2010, coca
area under cultivation fell 15 percent to 62,000 from 73,000 ha,
and cocaine production potential dropped 19 percent to 330 MT
from 410 MT. Although estimates differ due to dissimilar
methodologies, both reflect a similar declining trend in coca
cultivation and cocaine production potential.
In 2011, the GOC continued its aggressive interdiction and
eradication programs, and maintained a strong extradition record
for persons charged with crimes in the United States. The GOC
extradited 119 fugitives to the United States in 2011, the vast
majority of which were wanted for drug crimes. According to the
GOC, authorities seized over 186 MT of cocaine and cocaine
base and eliminated hundreds of tons of additional potential
cocaine through the combined aerial and manual eradication of
137,794 ha of coca. The GOC also continued to address
increasing domestic drug consumption, and raised the profile of
drug prevention and treatment efforts.
The GOC continued to apply pressure to the Revolutionary Armed
Forces of Colombia (FARC) and the National Liberation Army
(ELN), which maintain considerable control in areas with high
concentrations of coca and opium poppy cultivation. In 2011,
Colombian security forces captured or killed many high value
targets, including the FARC supreme commander Guillermo León
Sáenz Vargas, alias Alfonso Cano, the leader of the FARC since
2008, FARC 48th Front finance chief Olidem Romel Solarte Ceron,
alias Oliver Solarte, the drug trafficking kingpin of southern
Colombia, and FARC 30th Front commander Jorge Naphtali
Umenza Velasco, alias “Mincho,” the drug trafficking kingpin of
Colombia’s Pacific coast.
Colombia continues to see a rise in criminal organizations known
as “bandas criminales” or BACRIMs, which have become a major
law enforcement challenge. These groups include members of
former paramilitary groups and are active throughout much of the
country -- competing and sometimes cooperating with the FARC in
the drug trade. For example, the largest BACRIM organization,
“los Rastrojos,” has traceable cooperative agreements with both
the ELN and the FARC in southern Colombia. The violence
associated with the BACRIMs has spilled over into many of
Colombia’s major cities, leading to an increase in the murder rates
within some urban centers and the mass displacement of
thousands of rural citizens in 2011. In 2011, President Juan
Manuel Santos announced a comprehensive strategy to combat
the increasingly powerful BACRIM. The strategy identified
overarching themes to attack the BACRIM and detailed how
various government agencies would coordinate efforts, but it did
not designate additional resources to confront the problem.
Colombia is a party to the 1988 UN Drug Convention.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 1)
Colombia is a major source country for women and girls subjected
to sex trafficking in Latin America, the Caribbean, Western
Europe, Asia, and North America, including the United States, as
well as a transit and destination country for men, women, and
children subjected to forced labor. Within Colombia, some men
and children are found in conditions of forced labor in mining and
agriculture, and the sex trafficking of women and children from
rural areas into urban areas remains a significant problem. Some
women and children are subjected to domestic servitude, and
NGOs reported that forced begging was a problem in urban
areas. Groups at high risk for internal trafficking include displaced
persons, poor women in rural areas, indigenous communities, and
relatives of members of criminal organizations. Continued armed
violence in Colombia has displaced many communities, making
them vulnerable to human trafficking. Some Ecuadorian children,
many of them indigenous, are subjected to forced labor and sex
trafficking in Colombia. Illegal armed groups forcibly recruit
children to join their ranks; an international organization estimates
that at least 10,000 children participate in illegal armed groups.
Members of gangs and organized criminal networks force
relatives, acquaintances, and displaced persons – typically women
and children – into conditions of sex trafficking and forced labor,
including in the illegal drug trade. Colombia is a destination for
foreign child sex tourists from the United States and Europe,
particularly to coastal cities such as Cartagena and Barranquilla.
Migrants from South America, Africa, and China transit Colombia
en route to the United States and Europe; some may fall victim to
traffickers.
The Government of Colombia fully complies with the minimum
standards for the elimination of trafficking in persons. During the
reporting period, the government maintained law enforcement
actions against transnational sex trafficking offenders, achieved
its first conviction for forced labor, and continued robust
prevention efforts. The government worked with NGOs and
international organizations to provide adult trafficking victims with
services; however, it did not fund specialized shelters or services
for trafficking victims. Authorities did not utilize formalized
procedures to proactively identify trafficking victims among
vulnerable populations. The significant number of Colombians
trafficked abroad as well as internally reflects the continued need
for dedicated funding for comprehensive victim services.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: The Colombian government continued its vigorous
military, law enforcement, intelligence, and economic measures
against the Revolutionary Armed Forces of Colombia (FARC), the
National Liberation Army (ELN), and remaining elements of the
demobilized United Self-Defense Forces of Colombia (AUC).
Colombia continued to increase its international counterterrorism
cooperation and training efforts. As of October 31, the Colombian
government reported that more than 2,000 members of the FARC
and ELN demobilized in 2010, more than 1,500 were captured,
and more than 400 were killed in military or police operations.
2010 Terrorist Incidents: Despite its weakened state, the FARC
still numbered approximately 8,000 members, and continued
terrorist attacks, extortion, and kidnapping. The group increased
its use of land mines, ambushes, snipers, and improvised
explosive devices (IEDs). The FARC also used non-uniformed
militia members to carry out terrorist attacks, especially in more
populated areas. The FARC continued narcotics trafficking
activities, bombed military and civilian targets in urban areas, and
targeted rural outposts, police stations, infrastructure, and local
political leaders. The Colombian government reported that 391
members of the military and police forces were killed in the first 10
months of 2010, while 1,681 were injured and another 211 were
injured or killed by land mines. Some independent Colombian
organizations reported higher 2010 public security force casualty
figures.
Examples of 2010 terrorist activity attributed to the FARC included:
* On February 13, the FARC ambushed gubernatorial candidate
Jose Alberto Perez near San Jose de Guaviare, injuring him and
killing four police officers.
* On March 24, the FARC detonated a powerful car bomb on a
crowded street in downtown Buenaventura, Valle del Cauca
Province, next to the offices of the prosecutor general and the
mayor. Ten were killed in the attack, and more than 50 were
wounded.
* On March 25, the FARC convinced an unsuspecting 12-year-old
to carry an explosive device to a police station in Charco, Nariño
Province. The FARC detonated the bomb, killing the child and
wounding five others, including two police officers.
* On August 12, the FARC detonated a powerful car bomb in north
Bogota in front of the Caracol Media Building, injuring nine
civilians and causing significant property damage.
* On September 1, a sophisticated FARC roadside IED attack and
ambush killed 14 Colombian National Police officers and wounded
nine others unit near Doncello, Caqueta Province.
* On November 30, the FARC tricked a bus driver into carrying a
powerful bomb in Vegalarga, Huila, and detonated the explosive
while it was parked in front of a police station, killing the driver,
and wounding 10 police officers and a civilian.
The ELN remained active with approximately 1,250 fighters, but
with diminished resources and a reduced capability. Still, the ELN
continued to inflict numerous casualties on the Colombian military
through use of land mines and ambushes. The ELN financed its
operations through drug trafficking, kidnapping, and extortion.
Reaffirming their pact of non-aggression announced in December
2009, there was some increase in the FARC and ELN level of
cooperation against Colombian security forces in 2010, but long-
existing rivalries remained in many areas.
Legislation and Law Enforcement: The Colombian government
continued vigorous military, law enforcement, intelligence, and
economic measures against the FARC, ELN, and remaining
elements of the demobilized AUC. Extradition to the United States
remained an important tool for bringing drug traffickers and
terrorists to justice. Colombia extradited 148 defendants to the
United States in 2010 for prosecution, and 1,200 have been
extradited since July 4, 1991; most were Colombian nationals. The
Colombian government sought to extend the legislation allowing
for individual demobilizations from these terrorist groups, and
proposed legislation to address legal issues associated with the
earlier demobilization of approximately 17,000 of the over 32,000
demobilized members of the AUC.
On September 23, the Colombian government announced that
FARC Secretariat member and Eastern Bloc commander Victor
Julio Suarez Rojas (alias “Mono Jojoy”) was killed in a joint police
and military operation. Mono Jojoy had more than a dozen
convictions and 60 orders for capture for terrorism, murder, drug
trafficking, kidnapping, and forcible recruitment of minors. He had
also been indicted for the March 1999 killing of three U.S. citizens
(Ingrid Washinawatch, Kah’ena’e Gay, and Terence Freitas). On
June 13, Colombian forces rescued three Colombian police and
one Army hostage who had been held captive by the FARC for
nearly 12 years. Although the FARC’s supreme commander,
Guillermo León Sáenz (alias “Alfonso Cano”), evaded capture,
Colombian security forces also captured or killed a number of mid-
level FARC leaders during the year.
Public forces continued to debrief terrorist group deserters for
detailed information on their respective units, and reduced the
amount of territory where terrorists could freely operate. The
Colombian military and police destroyed caches of weapons and
supplies, and reduced the groups’ financial resources through
counternarcotics operations.
Colombia participated in the Megaports and Container Security
Initiatives.
Countering Terrorist Finance: Colombia cooperated with the
United States to block terrorists' assets, and Colombian
authorities and police carried out several operations during the
year to arrest and charge financial support networks of the FARC.
Aerial and manual eradication of illicit drugs in Colombia
destroyed approximately 143,000 hectares of illegal drug crops as
of December 3, thus depriving terrorist groups of potentially huge
profits. All Colombian financial institutions immediately close drug
trafficking and terrorism-related accounts on Colombian
government orders or in response to sanctions designations by
the United States. The Colombian financial sector is proactive in
the filing of Suspicious Activity Reports (SARs) with the Colombian
Financial Intelligence Unit (UIAF), and the Colombian government
has now extended its SAR requirements to casinos, public
notaries, and other non-financial sectors.
The United States carried out two major designation actions
against over 100 financial targets associated with narcotics
traffickers and money launderers tied to the FARC pursuant to the
Foreign Narcotics Kingpin Designation Act. Both actions were tied
to ongoing Colombian money laundering investigations of the
same targets. In June, UIAF hosted the annual Egmont plenary for
more than 100 member financial intelligence units worldwide in
Cartagena, Colombia, which recognized Colombia’s global role
and regional leadership in efforts to investigate and analyze
money laundering and terrorist financing cases.
Regional and International Cooperation: The Colombian
government expanded its role as a regional leader in
counterterrorism, continued to seek enhanced regional
counterterrorism cooperation to eliminate terrorist safe havens in
vulnerable border areas, and provided counterterrorism training
to officials from partner countries across the region. Colombia and
Mexico significantly increased joint training and operations against
narco-terrorist organizations operating in both countries.
Colombia enjoyed positive relations with and cooperated on
border security with Panama, Peru, and Brazil.
Colombia and Ecuador formally restored diplomatic relations in
December, which Ecuador had broken in March 2008 following a
Colombian military attack against a FARC camp inside
Ecuadorean territory. Relations with Venezuela deteriorated in the
first half of 2010, with Colombia publicly accusing the Venezuelan
Government of harboring and aiding top FARC and ELN leaders
in its territory. Relations with Venezuela were restored, however,
after Colombian President Juan Manuel Santos took office in
August. In November, the Venezuelan government extradited one
FARC and two ELN members to Colombia.
Countering Radicalization and Violent Extremism: The Colombian
government maintained strategic communications aimed at
countering terrorist propaganda and sought to increase individual
demobilizations. The government proposed potentially
transformative legislative agenda on victims and land restitution,
and began implementing an initial plan to return and formalize
land for 130,000 families.
The Colombian government continued to process and investigate
demobilized AUC members under the Justice and Peace Law
(JPL), which offers judicial benefits and reduced prison sentences
for qualifying demobilizing terrorists. The law requires all
participants to confess fully to their crimes as members of a
terrorist group and to return all illicit profits. More than 32,000
rank-and-file ex-AUC members who did not commit serious crimes
have demobilized, and many were receiving benefits through the
government’s reintegration program, including psychosocial
attention, education, healthcare, and career development
opportunities. Three senior leaders of the AUC have been
convicted and sentenced to eight years in prison under the JPL
process. Over 160,000 victims have registered under JPL,
although Colombian government efforts to create measures to
provide reparations to victims stalled. Some former paramilitaries
continued to engage in criminal activities after demobilization,
mostly in drug trafficking. The Colombian government refers to
these criminal groups as criminal bands, and estimated their
membership at more than 3,500, while non-governmental
organizations estimate membership at 6,000 or more.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
Unidad de Informacion y Analisis Financiero (UIAF)
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| Last Updated: 16 April 2012 |