Saturday, June 27, 2009

DGC Banking in Costa Rica? No Thanks!

By Mark Herpel
American Chronicle
Friday, May 2, 2008

We've all seen what happens to countries that make the black list for money laundering...Latvia, Nigeria...etc. A lot of DGC bank accounts, debit cards and a ton of customer DGC money is usually lost overnight.

There is nothing that will get you black listed faster than banks or countries involved with 'terrorist financing' and those related financial crimes. At present, it is believed that just Liberty Reserve banks in Costa Rica.

During an appearance before a special security commission at the Asamblea Legislativa Wednesday, April 16th, Costa Rica's chief prosecutor, Francisco Dall'Anesse issued a warning that Costa Rica could become the world center of terrorism financing and money laundering if lawmakers do not move quickly to pass pending legislation.

Costa Rica is a member of the Egmont Group (see below) which is an 18-year-old informal organization of countries dedicated to fighting money laundering.

However, in order to remain a member of the Egmont Group requires that Costa Rica enact new terrorist financing legislation by May 2008 (this month). This legislation has been bogged down since October of last year and still has not passed.

Considering May is is less than a week away, there appears to be little chance that the financial anti -terrorism measures will be passed in time.

Dall'Anesse also told lawmakers the country is losing the fight against crime because those who enforce the laws lack weapons to confront organized crime. One of these tools needed is the ability to wiretap phones. Today, even in extreme cases of kidnapping, it takes the Costa Rican authorities up to one month to track a call !!

In a March 25th article, Kenneth Rijock who is the Financial Crime Consultant for World-Check ( points out that a lot of illicit Venezuelan and Iranian funds are now flowing into Costa Rica. This is money destined for FARC and other leftist groups seeking to topple democratic Latin American governments. Mr. Rijock has repeatedly made the point that Costa Rica's financial structure is often used for terrorist financing of FARC.

His sources point out that:
  • The funds originate in Venezuelan banks that are assisting both the Venezuelan and Iranian governments in achieving their radical political goals, to wit: replacing those remaining democratic Latin American governments with extreme leftist regimes allied with Venezuela.
  • The Iranian-owned Venezuelan financial institution, Banco Internacional Desarrollo (BID), has been named as a primary force in several such transfers. This bank received its charter in only one week after its application had been filed, which is extraordinary in and of itself, and it has been extremely active throughout all regions of Latin America.
  • From Costa Rica, funds are transferred to the FARC, and are delivered to several radical leftist groups, including other designated global terrorist organizations, There is no indication that Costa Rica law enforcement or regulatory authorities have interdicted or seized any of these inbound or outbound wire transfers, or cash withdrawals, most of which reportedly ends up in the hands of the FARC. Other radical organizations, dedicated to the violent overthrow of their country's lawfully-elected governments, also are recipients of these funds.
The Egmont Group, Financial Intelligence Units (FIUs)

The fight against money laundering has been an essential part of the overall struggle to combat illegal narcotics trafficking, the activities of organized crime, and more recently the financing of terrorist activity. It became apparent over the years that banks and other financial institutions were an important source for information about money laundering and other financial crimes being investigated by law enforcement. Concurrently, governments around the world began to recognize the corrosive dangers that unchecked financial crimes posed to their economic and political systems.

To address that threat, a number of specialized governmental agencies were created as countries around the world developed systems to deal with the problem of money laundering. These entities are now commonly referred to as "financial intelligence units" or "FIUs". They offer law enforcement agencies around the world an important avenue for information exchange.

Recognizing the benefits inherent in the development of a FIU network, in 1995, a group of FIUs at the Egmont Arenberg Palace in Brussels decided to establish an informal group for the stimulation of international co-operation. Now known as the Egmont Group, these FIUs meet regularly to find ways to cooperate, especially in the areas of information exchange, training and the sharing of expertise.

There are currently 106 countries with recognized operational FIU units, with others in various stages of development. Countries must go through a formal procedure established by the Egmont Group in order to be recognized as meeting the Egmont Definition of an FIU. The Egmont Group as a whole meets once a year. The five Working Groups and the Egmont Committee are used to conduct common business, along with the Egmont Group Secretariat established in 2007.

FIUs, at a minimum, receive, analyze, and disclose information by financial institutions to competent authorities of suspicious or unusual financial transactions. Although every FIU operates under different guidelines, most FIUs, under certain provisions, can exchange information with foreign counterpart FIUs. In addition, many FIUs can also be of assistance in providing other government administrative data and public record information to their counterparts, which can also be very helpful to investigators. One of the main goals of the Egmont Group is to create a global network by promoting international co-operation between FIUs.

The ongoing development and establishment of FIUs exemplify how countries around the world continue to intensify their efforts to focus on research, analysis and information exchange in order to combat money laundering, terrorist financing and other financial crimes.

Mark Herpel is the editor of Digital Gold Currency Magazine and resides in Panama. This article was also published in DGC Magazine (May 2008).

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