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El Salvador: Combatting laundering

Gerardo Nuñez
Money and assets laundering is the process by which the sources of funds generated by illicit or criminal activities are covered or hidden. Laundering creates the illusion that the funds are the result of legitimate activities moving smoothly within the financial system.

This process of contamination is a complex and serious threat to the international community, which directly affects the financial system, government and social welfare of the nations involved. Therefore, it needs to be made a priority on their financial, economic and political agendas, so they can develop dynamic and coordinated systems of prevention and control along with legal entities and regulations capable of preventing the growth and spread of this practice.

In this regard, and to comply with international standards on combating money and assets laundering and the financing of terrorism contained in the recommendations of the Financial Action Task Force (FATF), the Legislative Assembly of El Salvador recently approved a set of reforms to the already existing Law Against Money and Assets Laundering.

These reforms focus primarily on the expansion of the subjects required by law who, from the effective date of the reforms, should monitor and report any suspicious financial transactions or diligence and adapt processes and institutions for law enforcement. Subjects include those of a political nature such as: president and vice-president, senators, ministers and vice ministers, judges of the Supreme Court and chambers of second instance, judges of the Court of Accounts, attorney general, attorney for the defence of human rights, members of the Supreme Electoral Tribunal, diplomatic representatives, judges, provincial governors and members of municipal councils. Similarly, these reforms also apply to professionals such as notaries, lawyers, accountants and auditors, who should inform the Financial Investigation Unit of the District Attorney Office of transactions above $10,000 granted before them.

Even though the harmonisation of the recommendations established by the FATF have not yet all been completed, the reforms show an important step in the adaptation of the country's legal system in a coordinated and systematic fight against money laundering. This is a pressing issue, which causes serious damage to the development of our economy and society as a whole.

Gerardo Nuñez

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