Uruguay, a beacon of economic stability in Latin America, is grappling with a troubling rise in suspicious financial activities.In 2024, the country recorded 964 suspicious transaction reports (STRs) linked to potential money laundering and terrorist financing, a 5.8% increase from the previous year, as reported by Bsqueda.This surge raises questions about whether Uruguays financial openness is becoming a double-edged sword.
The financial sector dominated these reports with 880 filings, up from 830 in 2023.Non-financial entitiessuch as real estate firms, casinos, notaries, and auction housesfiled 84 reports, slightly more than the 81 submitted the year before.
These figures represent a significant jump from 2017 when just 398 reports were recorded.While the increase reflects improved oversight, it also underscores growing vulnerabilities in Uruguays financial system.
Uruguay has long been a magnet for foreign capital due to its banking secrecy laws and tax incentives for non-residents.Uruguays Financial Hub Status Tested by Rising Money Laundering Risks.
(Photo Internet reproduction)However, these same features have made it an attractive target for illicit financial flows.
Government data reveals that investigations into money laundering tied to drug trafficking nearly doubled between 2018 and 2022, rising from 1,597 to 3,021 cases.Uruguays Struggle with Organized CrimeThis trend highlights the mounting challenge of combating organized crime within its borders.
To counter these risks, Uruguay enacted Law No.
19,574 to align its anti-money laundering (AML) framework with international standards set by the Financial Action Task Force (FATF).The law broadened reporting requirements to include non-financial sectors and introduced stricter customer due diligence rules.
Yet, enforcement remains a weak point.
A FATF evaluation in 2019 found Uruguay Compliant with only 16 of its 40 recommendations and ineffective in key areas like prosecution and penalties.Despite being ranked as Latin Americas lowest-risk nation for money laundering by the Basel AML Index in 2024, Uruguays rising STRs tell a more complex story.
Critics argue that while its legal framework appears strong on paper, enforcement gaps exist.These gaps leave room for exploitation.
Cross-border risks and emerging threats like drug-related laundering further complicate the landscape.
Uruguay now stands at a critical juncture.As it balances its role as a regional financial hub with the need for tighter controls, its ability to close enforcement gaps will determine whether it remains a low-risk jurisdictionor becomes a soft target for global criminal networks.