Long abstract

SUMMARY OF THE REPORT PUBLISHED BY GAFISUD / FATF

Money Laundering (ML) and Terrorist Financing (TF) are transnational problems. Money launderers frequently and intentionally make use of illegal operations involving two or more countries and use international funds or value transfers as part of money laundering operations. Typologies studies conducted by GAFISUD and other international bodies have identified a number of ML schemes that operate in South America. This study enhances these previous studies and seeks to identify a number of current ML typologies – methods used to launder money using the international funds or value. 
The research project focused primarily on money remitters and mail service companies or couriers, the foreign exchange sector, and the physical cross-border transportation of currency or negotiable instruments, concerns a regional analysis of international funds transfers and the means and sectors involved.
Relevant information about the regional view concerning international funds transfers was included, and the study indicates regions where controls are insufficient or inexistent. This information is available for the financial sector, FIUs and the law enforcement agencies, to understand the vulnerabilities with the GAFISUD region that could be exploited for complex ML/TF operations.
Specific ML/TF typologies in relation to international funds transfers were researched and five main typologies were identified:

• Illicit foreign currency arbitrage transactions
• Transfers of unlawful money structured through international remittances
• “Peso broker” (Black Market Peso Exchange)
• International loan simulation and capitalization of legitimate companies with illegal funds 
• Physical transportation of illegal proceeds

A chapter with specific Directives of the sectors under study is included to identify those areas that may be vulnerable ML/TF operations due to poor or inadequate regulation and supervision. This also includes proposals for strengthening prevention and detection measures.
Lastly, this paper concludes with general recommendations regarding the observed weaknesses that allow ML and TF to abuse the international funds or value transfer systems.