FATF AML Deficiency List
Offshore Finance Center
US Dept of State Money Laundering assessment
Uruguay is not on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Uruguay was undertaken in 2019. According to that Evaluation, Uruguay was deemed Compliant for 16 and Largely Compliant for 23 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.
US Department of State Money Laundering assessment (INCSR)
Uruguay was last deemed a Jurisdiction of Primary Concern in the US Department of State 2018 International Narcotics Control Strategy Report (INCSR). The Overview from that report was as follows: -
Uruguay uses the U.S. dollar, often as a business currency; about 75 percent of deposits and 55 percent of credits are denominated in U.S. dollars. Laundered criminal proceeds are derived primarily from foreign activities related to drug trafficking. Local drug dealers participate in a range of other illicit activities, including violent crimes. Law enforcement officials and the judiciary assess that Colombian, Italian, Mexican, Paraguayan, and Russian criminal organizations operate locally. Officials are concerned about growing transnational organized crime originating from Brazil and Peru.
Uruguay continues to make progress combating money laundering by passing new legislation, enforcing laws, and strengthening relevant regulatory agencies. The result is an overall improvement in fiscal transparency and international cooperation. In 2017, Uruguay completed a new risk assessment and as of December 2017 it was finalizing its 2020 AML strategy. On November 1, Uruguay transitioned from the inquisitorial legal system to the accusatorial penal code system, a change the government believes will help advance AML/CFT investigations.
Uruguay needs to increase transparency regarding non-financial entities, improve its AML system of analysis, provide for criminal liability for legal persons, and improve the management and disposition of seized assets and funds.
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 71
World Governance Indicator – Control of Corruption 88
Corruption is a low risk for companies operating in Uruguay, which is considered the least corrupt country in Latin America. Uruguay has a strong rule of law and transparent institutions, and it actively prosecutes corruption offenses. Corruption-related obstacles are most likely to occur when operating in the public procurement sector. The Anti-Bribery Law (in Spanish) prohibits public officials from accepting bribes or facilitation payments, while individuals who offer or pay the bribe or facilitation payment will be held criminally liable. The maximum punishments are fines or jail of up to six years, but companies cannot be held liable. Facilitation payments and gifts are rare in practice. For further information - GAN Integrity Business Anti-Corruption Portal
Uruguay has a free market economy characterized by an export-oriented agricultural sector, a well-educated workforce, and high levels of social spending. Uruguay has sought to expand trade within the Common Market of the South (Mercosur) and with non-Mercosur members, and President VAZQUEZ has maintained his predecessor’s mix of pro-market policies and a strong social safety net.
Following financial difficulties in the late 1990s and early 2000s, Uruguay's economic growth averaged 8% annually during the period 2004-08. The 2008-09 global financial crisis put a brake on Uruguay's vigorous growth, which decelerated to 2.6% in 2009. Nevertheless, the country managed to avoid a recession and keep positive growth rates, mainly through higher public expenditure and investment; GDP growth reached 8.9% in 2010 but slowed in 2012-13 as a result of a renewed slowdown in the global economy and in Uruguay's main trade partners and Mercosur counterparts, Argentina and Brazil.
Agriculture - products:
soybeans, rice, wheat; beef, dairy products; fish; lumber, cellulose
food processing, electrical machinery, transportation equipment, petroleum products, textiles, chemicals, beverages
Exports - commodities:
beef, soybeans, cellulose, rice, wheat, wood, dairy products; wool
Exports - partners:
China 15%, Brazil 14.4%, US 6.5%, Argentina 4.9% (2015)
Imports - commodities:
refined oil, crude oil, passenger and other transportation vehicles, vehicle parts, cellular phones
Imports - partners:
Brazil 18.2%, China 17.4%, Argentina 12.6%, US 9.1%, Germany 4.5%, Nigeria 4.1% (2015)
Investment Climate - US State Department
The Government of Uruguay recognizes the important role foreign investment plays in economic development and maintains a favorable investment climate that does not discriminate against foreign investors.
Uruguay has a stable legal system in which foreign and national investments are treated alike, most investments are allowed without prior authorization and investors may freely transfer abroad their capital and profits from their investment. Investors can choose between arbitration and the judicial system to settle disputes. The World Bank's 2016 "Doing Business" Index placed Uruguay 4th out of eleven countries in South America.
There are significant tax incentives for investors which, together with strong economic growth and booming commodities prices, contributed to a strong increase in foreign and local investment over the past decade. Foreign Direct Investment (FDI) rose from an average of $0.3 billion in 2000-2004 to $2.5 billion in 2010-2014. Over the past decade, Uruguay received the third largest inflow of FDI in South America adjusted by Gross Domestic Product (GDP), especially in pulp mills, construction, agriculture and industry.
With the fourth largest stock of foreign investment, the United States is an important investor in Uruguay. Currently about 130 U.S. firms operate locally and distribute their investments amongst a wide array of sectors, including forestry, tourism and hotels, other services, and telecommunications.
Uruguay is a stable democracy. Political risk is low and there have been no recent cases of expropriation. U.S. firms have not identified corruption as a problem for investment.
Uruguay has free trade agreements with its Mercosur partners (Argentina, Brazil, Paraguay and Venezuela), as well as Chile, Bolivia, Colombia, Ecuador, Mexico and Peru. Its strategic location (in the center of Mercosur´s wealthiest and most populated area) and its special import regimes (such as free zones and free ports) also make it a well-situated distribution center for U.S. goods into the region. Several U.S. firms warehouse their products in Uruguay´s tax free areas and service their regional clients effectively. With a market of 3.3 million high-income consumers, Uruguay is a good test market for U.S. products.
Uruguay has bilateral investment treaties with over 30 countries, including the United States. The two countries have also signed agreements or Memorandums of Understanding (MOU) on Open Skies, Trade and Investment, Cooperation in Science and Technology, Promotion of Small and Medium Firms and Customs Mutual Assistance. As of April 2016, both governments are negotiating an agreement on social security. The United States does not have a double-taxation treaty with Uruguay.
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