|
Sanctions:
None applicable.
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2012:
While not a major regional financial center, Costa Rica remains
vulnerable to money laundering and other financial crimes,
including various schemes that target U.S.-based victims. Money
laundering activities are primarily related to the foreign proceeds
of international trafficking in cocaine. A sizeable internet gaming
industry also launders millions of dollars in illicit proceeds through
Costa Rica and offshore centers annually. To a lesser extent,
proceeds are laundered in Costa Rica from domestic criminal
activities, including trafficking narcotics, persons or arms; fraud;
corruption; and contraband smuggling. A significant market exists
in the smuggling of contraband liquors from bordering countries.
The Government of Costa Rica (GOCR) reports that Costa Rica is
primarily used as a bridge to send funds to and from other
jurisdictions using, in many cases, companies or banks
established in offshore financial centers.
Money laundering occurs across the formal financial sector; the
non-financial sector, especially via both licensed and unlicensed
money remitters; and within the free trade zones (FTZs).
Nicaraguan nationals residing in Costa Rica send over $200
million in remittances annually to family members in their home
country, much of which is sent via unlicensed money remitters.
Both these unlicensed and licensed money services businesses
are a significant risk for money laundering and a potential
mechanism for terrorist financing. In addition, Costa Rica’s 35
FTZs, used by approximately 284 companies, are susceptible to
money laundering. The smuggling of bulk currency across
borders with Panama and Nicaragua is also prevalent. Trade-
based money laundering, while utilized, has not been detected
with the same frequency as the other typologies described above.
The GOCR has not reported investigations of terrorism financing
in 2011.
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.: NO
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: NO civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
KYC covered entities: Banks, credit institutions, and savings and
loan cooperatives; pension funds; insurance companies and
agents; money exchangers and remitters; trust managers,
investment fund and safekeeping companies; issuers, sellers or
redeemers of travelers checks and postal money orders; and
securities dealers
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 294 from January –
September 2011
Number of CTRs received and time frame: Not available
STR covered entities: Banks, credit institutions, and savings and
loan cooperatives; pension funds; insurance companies and
agents, money exchangers and remitters; trust managers,
investment fund and safekeeping companies; issuers, sellers or
redeemers of travelers checks and postal money orders; and
securities dealers
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: Nine from December 2010 to October 2011
Convictions: Two from December 2010 to October 2011
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: YES
With other governments/jurisdictions: YES
Costa Rica is a member of the Financial Action Task Force on
Money Laundering in South America (GAFISUD), a Financial
Action Task Force-style regional body. Its most recent mutual
evaluation can be found here: http://www.cfatf-gafic.org/mutual-
evaluation-reports.html
Enforcement and implementation issues and comments:
In October 2010, the Judicial Branch appointed a new Attorney
General. As part of a subsequent restructuring, in December
2010, the Attorney General’s Office (AGO) transferred the
prosecution of money laundering cases from the Organized Crime
Bureau to the Economic Crimes Bureau. In addition, the Attorney
General appointed a new bureau chief to the renamed Economic
Crimes, Taxation, and Money Laundering Bureau. Based on these
changes, beginning in January 2011, there has been a significant
emphasis placed on money laundering investigations, including
those involving advanced typologies and transnational crime.
Nevertheless, the AGO and the Judicial Police still lack adequate
resources to effectively investigate and prosecute many of the
complex money laundering cases linked to Costa Rica.
Moreover, the legal doctrine of “self-laundering” (autolavado in
Spanish) prevents prosecutors from charging money laundering
in many cases. Under Costa Rican law, a person who commits a
predicate crime and who subsequently launders the proceeds of
that crime cannot be charged with money laundering as an
additional offense (e.g., a drug dealer who is convicted on drug
charges cannot also be prosecuted for laundering the drug
proceeds). In Costa Rica, money launderers oftentimes use
legitimate businesses and shell corporations to launder illegal
proceeds. However, criminal liability does not extend to legal
persons.
Land-based casinos and internet gaming companies are
effectively not regulated in Costa Rica and represent a significant
risk for money laundering. The online gaming industry transacts
billions of dollars annually and employs thousands of Costa Rican
nationals. Most of its proceeds are laundered in offshore centers
but millions of dollars still circulate in Costa Rica.
The GOCR reports that Costa Rican attorneys oftentimes conduct
large cash purchases of real estate on behalf of persons located
in the United States. While many of these transactions appear
legal, the GOCR has concerns that some of the international wire
transfers ostensibly for legitimate real estate transactions are, in
fact, the proceeds of illegal activities in the United States.
In 2011, the GOCR pursued its first case under the 2009 civil
forfeiture law. The presiding judge subsequently referred the case
to the Costa Rican Supreme Court for an advisory opinion which
has yet to be issued. It is still unclear whether the GOCR will assist
other countries in obtaining non-conviction-based forfeiture.
While it has demonstrated a genuine commitment to
strengthening its anti-money laundering/counter-terrorist
financing (AML/CFT) regulatory regime, the GOCR has not fully
implemented recently enacted risk-based regulations. The GOCR
and its regulators have focused considerable attention on the
formal financial sector; however, they have not adequately
supervised money service businesses, especially money
remitters, and issuers, sellers or redeemers of travelers checks
and postal money orders. While the FIU is tasked with oversight
authority with respect to these entities, it lacks the resources,
personnel, or capacity to comply with this mandate. Additionally,
designated non-financial businesses and professions (DNFBPs),
such as dealers of precious stones and metals, accountants, real
estate agents, lawyers and notaries, are not covered by the
AML/CFT provisions.
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
For the second year, President Obama designated Costa Rica as
a major transit country in the 2011 Report to Congress on Major
Illicit Drug Producing and Drug Transit Countries. Various factors
contributed to Costa Rica’s status as a drug transshipment point
for cocaine and heroin destined for the United States, including its
geographic location on the isthmus linking narcotics producing
countries in South America with the United States, its extensive
Caribbean and Pacific coastlines, and the vulnerable Costa Rican
Coco Island in the Pacific Ocean. The Government of Costa Rica
expressed concern regarding the rising consumption of illicit
narcotics, levels of drug-related violence, and the presence of the
Sinaloa Cartel. The Chinchilla Administration emphasized security
as its top priority and, in cooperation with the Judiciary, initiated
efforts to address security in 2011, including an initiative to
improve police training. The government obtained legislative
approval for fiscal reform that will enable it to make greater
investments in citizen security. Costa Rica is a party to the 1988
UN Drug Convention.
Read full report
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2 Watch List)
Costa Rica is a source, transit, and destination country for men,
women, and children subjected to sex trafficking and forced labor.
Costa Rican women and children are subjected to sex trafficking
within the country, and residents of the north and central Pacific
coast zones are particularly vulnerable to internal trafficking.
Women and girls from Nicaragua, the Dominican Republic, and
other Latin American countries have been identified in Costa Rica
as victims of sex trafficking and forced domestic service. Child sex
tourism is a serious problem, particularly in the provinces of
Guanacaste, Limon, Puntarenas, and San Jose. Child sex tourists
arrive mostly from the United States, Germany, Sweden, and Italy.
Costa Rica is increasingly a destination for men from other Central
American countries and from Asian countries subjected to
conditions of forced labor, particularly in the agriculture,
construction, and fishing sectors. During the reporting period,
more than 40 men from Indonesia, the Philippines, China, and
Vietnam were found in conditions of forced labor in the fishing
industry, and authorities identified three men from El Salvador
who were subjected to forced labor on a farm. Costa Rica serves
as a transit point for migrants en route to the United States, some
of whom may fall victim to human trafficking.
The Government of Costa Rica does not fully comply with the
minimum standards for the elimination of trafficking; however, it is
making significant efforts to do so. These significant efforts
included the government’s implementation of procedures to
identify and assist trafficking victims, increased staffing of the anti-
trafficking police unit, and the creation of a special team to identify
potential trafficking victims among migrants. Authorities, however,
failed to convict or sentence any trafficking offenders, did not
maintain specialized services or shelters for trafficking victims,
and made limited efforts to raise public awareness about human
trafficking. The government did not demonstrate evidence of
overall increasing efforts over the previous reporting period;
therefore, Costa Rica is placed on Tier 2 Watch List.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2009
No report available
None applicable.
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2012:
While not a major regional financial center, Costa Rica remains
vulnerable to money laundering and other financial crimes,
including various schemes that target U.S.-based victims. Money
laundering activities are primarily related to the foreign proceeds
of international trafficking in cocaine. A sizeable internet gaming
industry also launders millions of dollars in illicit proceeds through
Costa Rica and offshore centers annually. To a lesser extent,
proceeds are laundered in Costa Rica from domestic criminal
activities, including trafficking narcotics, persons or arms; fraud;
corruption; and contraband smuggling. A significant market exists
in the smuggling of contraband liquors from bordering countries.
The Government of Costa Rica (GOCR) reports that Costa Rica is
primarily used as a bridge to send funds to and from other
jurisdictions using, in many cases, companies or banks
established in offshore financial centers.
Money laundering occurs across the formal financial sector; the
non-financial sector, especially via both licensed and unlicensed
money remitters; and within the free trade zones (FTZs).
Nicaraguan nationals residing in Costa Rica send over $200
million in remittances annually to family members in their home
country, much of which is sent via unlicensed money remitters.
Both these unlicensed and licensed money services businesses
are a significant risk for money laundering and a potential
mechanism for terrorist financing. In addition, Costa Rica’s 35
FTZs, used by approximately 284 companies, are susceptible to
money laundering. The smuggling of bulk currency across
borders with Panama and Nicaragua is also prevalent. Trade-
based money laundering, while utilized, has not been detected
with the same frequency as the other typologies described above.
The GOCR has not reported investigations of terrorism financing
in 2011.
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.: NO
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: NO civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
KYC covered entities: Banks, credit institutions, and savings and
loan cooperatives; pension funds; insurance companies and
agents; money exchangers and remitters; trust managers,
investment fund and safekeeping companies; issuers, sellers or
redeemers of travelers checks and postal money orders; and
securities dealers
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 294 from January –
September 2011
Number of CTRs received and time frame: Not available
STR covered entities: Banks, credit institutions, and savings and
loan cooperatives; pension funds; insurance companies and
agents, money exchangers and remitters; trust managers,
investment fund and safekeeping companies; issuers, sellers or
redeemers of travelers checks and postal money orders; and
securities dealers
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: Nine from December 2010 to October 2011
Convictions: Two from December 2010 to October 2011
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: YES
With other governments/jurisdictions: YES
Costa Rica is a member of the Financial Action Task Force on
Money Laundering in South America (GAFISUD), a Financial
Action Task Force-style regional body. Its most recent mutual
evaluation can be found here: http://www.cfatf-gafic.org/mutual-
evaluation-reports.html
Enforcement and implementation issues and comments:
In October 2010, the Judicial Branch appointed a new Attorney
General. As part of a subsequent restructuring, in December
2010, the Attorney General’s Office (AGO) transferred the
prosecution of money laundering cases from the Organized Crime
Bureau to the Economic Crimes Bureau. In addition, the Attorney
General appointed a new bureau chief to the renamed Economic
Crimes, Taxation, and Money Laundering Bureau. Based on these
changes, beginning in January 2011, there has been a significant
emphasis placed on money laundering investigations, including
those involving advanced typologies and transnational crime.
Nevertheless, the AGO and the Judicial Police still lack adequate
resources to effectively investigate and prosecute many of the
complex money laundering cases linked to Costa Rica.
Moreover, the legal doctrine of “self-laundering” (autolavado in
Spanish) prevents prosecutors from charging money laundering
in many cases. Under Costa Rican law, a person who commits a
predicate crime and who subsequently launders the proceeds of
that crime cannot be charged with money laundering as an
additional offense (e.g., a drug dealer who is convicted on drug
charges cannot also be prosecuted for laundering the drug
proceeds). In Costa Rica, money launderers oftentimes use
legitimate businesses and shell corporations to launder illegal
proceeds. However, criminal liability does not extend to legal
persons.
Land-based casinos and internet gaming companies are
effectively not regulated in Costa Rica and represent a significant
risk for money laundering. The online gaming industry transacts
billions of dollars annually and employs thousands of Costa Rican
nationals. Most of its proceeds are laundered in offshore centers
but millions of dollars still circulate in Costa Rica.
The GOCR reports that Costa Rican attorneys oftentimes conduct
large cash purchases of real estate on behalf of persons located
in the United States. While many of these transactions appear
legal, the GOCR has concerns that some of the international wire
transfers ostensibly for legitimate real estate transactions are, in
fact, the proceeds of illegal activities in the United States.
In 2011, the GOCR pursued its first case under the 2009 civil
forfeiture law. The presiding judge subsequently referred the case
to the Costa Rican Supreme Court for an advisory opinion which
has yet to be issued. It is still unclear whether the GOCR will assist
other countries in obtaining non-conviction-based forfeiture.
While it has demonstrated a genuine commitment to
strengthening its anti-money laundering/counter-terrorist
financing (AML/CFT) regulatory regime, the GOCR has not fully
implemented recently enacted risk-based regulations. The GOCR
and its regulators have focused considerable attention on the
formal financial sector; however, they have not adequately
supervised money service businesses, especially money
remitters, and issuers, sellers or redeemers of travelers checks
and postal money orders. While the FIU is tasked with oversight
authority with respect to these entities, it lacks the resources,
personnel, or capacity to comply with this mandate. Additionally,
designated non-financial businesses and professions (DNFBPs),
such as dealers of precious stones and metals, accountants, real
estate agents, lawyers and notaries, are not covered by the
AML/CFT provisions.
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
For the second year, President Obama designated Costa Rica as
a major transit country in the 2011 Report to Congress on Major
Illicit Drug Producing and Drug Transit Countries. Various factors
contributed to Costa Rica’s status as a drug transshipment point
for cocaine and heroin destined for the United States, including its
geographic location on the isthmus linking narcotics producing
countries in South America with the United States, its extensive
Caribbean and Pacific coastlines, and the vulnerable Costa Rican
Coco Island in the Pacific Ocean. The Government of Costa Rica
expressed concern regarding the rising consumption of illicit
narcotics, levels of drug-related violence, and the presence of the
Sinaloa Cartel. The Chinchilla Administration emphasized security
as its top priority and, in cooperation with the Judiciary, initiated
efforts to address security in 2011, including an initiative to
improve police training. The government obtained legislative
approval for fiscal reform that will enable it to make greater
investments in citizen security. Costa Rica is a party to the 1988
UN Drug Convention.
Read full report
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2 Watch List)
Costa Rica is a source, transit, and destination country for men,
women, and children subjected to sex trafficking and forced labor.
Costa Rican women and children are subjected to sex trafficking
within the country, and residents of the north and central Pacific
coast zones are particularly vulnerable to internal trafficking.
Women and girls from Nicaragua, the Dominican Republic, and
other Latin American countries have been identified in Costa Rica
as victims of sex trafficking and forced domestic service. Child sex
tourism is a serious problem, particularly in the provinces of
Guanacaste, Limon, Puntarenas, and San Jose. Child sex tourists
arrive mostly from the United States, Germany, Sweden, and Italy.
Costa Rica is increasingly a destination for men from other Central
American countries and from Asian countries subjected to
conditions of forced labor, particularly in the agriculture,
construction, and fishing sectors. During the reporting period,
more than 40 men from Indonesia, the Philippines, China, and
Vietnam were found in conditions of forced labor in the fishing
industry, and authorities identified three men from El Salvador
who were subjected to forced labor on a farm. Costa Rica serves
as a transit point for migrants en route to the United States, some
of whom may fall victim to human trafficking.
The Government of Costa Rica does not fully comply with the
minimum standards for the elimination of trafficking; however, it is
making significant efforts to do so. These significant efforts
included the government’s implementation of procedures to
identify and assist trafficking victims, increased staffing of the anti-
trafficking police unit, and the creation of a special team to identify
potential trafficking victims among migrants. Authorities, however,
failed to convict or sentence any trafficking offenders, did not
maintain specialized services or shelters for trafficking victims,
and made limited efforts to raise public awareness about human
trafficking. The government did not demonstrate evidence of
overall increasing efforts over the previous reporting period;
therefore, Costa Rica is placed on Tier 2 Watch List.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2009
No report available
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| Further Tables |
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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.
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.
| COSTA RICA |
| KnowYourCountry |
|
________________________________________________________________
AML News / Relevant Information
July 6, 2011 - Costa Rica uplifted to OECD White List for
implementation of the agreed tax standard (4 July 2011)
View full list
Links:
Worldwide AML Legislation (International Bar Association)
AML News / Relevant Information
July 6, 2011 - Costa Rica uplifted to OECD White List for
implementation of the agreed tax standard (4 July 2011)
View full list
Links:
Worldwide AML Legislation (International Bar Association)
|
| Last Updated: 16 April 2012 |