The Tri-Border Area (TBA) shared by Argentina, Brazil and Paraguay is a key focus in the US state department’s efforts to curb trade-based financial crime according to its recently published 2019 International Narcotics Control Strategy Report (INCSR).

The state department sees this area as one of the world’s principal locations for multi-billion dollar trade-based money laundering (TBML), counterfeiting, drug trafficking, and other smuggling offences.

Hezbollah links

The report says criminal networks in the TBA also provide financial support to Hezbollah, which the US has designated a foreign terrorist organisation and which the state department sees as a prime participant in TBML operations in the region.

The three countries within the TBA are making efforts to curb money laundering in the area, with varying degrees of success according to the INCSR.

Progress in Argentina

Argentina is “moving in the right direction…[but] has important progress to make in implementing adequate mechanisms to effectively prevent, detect, investigate, and prosecute money laundering and related crimes,” in the TBA the report says.

Under President Mauricio Macri, who has been in office since 2015, the INCSR says Argentina has taken significant steps to strengthen its anti-money laundering and counter financing of terrorism regime.

But the report concludes that despite these positive steps, limited regulatory and criminal enforcement capabilities continue to raise concerns.

Paraguay’s efforts

Paraguay has worked to reduce the criminal use of the country’s financial system to launder illicit proceeds by taking steps to address corruption, eliminate bureaucratic inefficiencies, and enhance inter-agency coordination according to the INCSR.

The report complements the administration of recently installed President Mario Abdo Benítez for its, “renewed focus on [anti money laundering and counter financing of terrorism] efforts, with strong early results.”

Brazilian concerns

The INCSR appears most concerned about Brazil, pointing out that in June 2018 the Financial Action Task Force (FATF) issued a warning that the country risks suspension if it fails to remedy remaining counter-financing of terrorism deficiencies.

The deficiencies relate to the implementation of targeted sanctions for terrorist financiers designated by the UN Security Council.

The 2019 International Narcotics Control Strategy Report by the US Department of State can be found here.

Categories: Trade Based Financial crimes News