Costa Rica Proposes Legislation to Combat Terrorism Financing

By Dialogo
February 19, 2016




Costa Rica is continuing to take steps to comply with recommendations by the Latin American Financial Action Task Force (GAFILAT, for its Spanish acronym) to stop terrorism financing within its borders.

In July 2015, during the GAFILAT XXXI Plenary Meeting in the Costa Rican capital of San José, authorities unveiled the National Strategy to Counter Money Laundering and Terrorism Financing
, a far-reaching instrument aimed at creating new tools to prevent those crimes from occurring in the country. The initiative was based on 40 recommendations made by regional group, and among other things, proposed legislation to combat terrorism financing.

Now, key legislation is moving forward. According to Guillermo Araya, Director of the Costa Rican Institute on Drugs (ICD), a bill aiming to bolster the laws and regulations to help security forces fight money laundering and terrorism financing was approved by Costa Rica’s Congressional Security and Drug Trafficking Committee on December 18th, and will be presented to the country's Parliament for debate on a date yet to be determined.

The proposed legislation seeks to reform four of Law 8204’s 170 articles to further strengthen provisions against the financing of terrorism. Its revisions would empower the ICD to freeze funds, bolster its ability to track international money orders, and take into consideration terrorists and terrorist organizations identified by the UN Security Council.

The aim of the proposed revisions is to “assure Costa Ricans that a contribution made to any organization – it could be a non-governmental or a private organization – won’t be diverted to fund terrorist cells or members going through the Americas,” Araya explained. “We’ve seen Syrians going from country to country, sleeping in hostels, taking buses, and some taking planes. It’s from those small funds they live off and travel in the Americas, with a destination that could be any country."

“Mostly, they enter through South America (…) Argentina, Uruguay, and Ecuador – and start their journey, always going north in our continent, so they need resources,” he added. “The aim is to armor and protect countries so those diversions don’t take place, and provide [countries] with that option to detect, control, but above all, prevent that from happening in our countries, so the threat won’t materialize.”

Prevention, intelligence, investigation


Costa Rica’s strategy is based on the principles that make up the core of GAFILAT’s Anti-Money Laundering and Counter-Terrorism Financing system, which includes prevention, detection and intelligence, and investigation and criminal justice. GAFILAT, which operates under the umbrella of the global Financial Action Task Force (FATF), stated in a July 2015 report that “[Costa Rica] is in the process of developing a National Strategy aimed at implementing policies and activities based on the risks identified."

The report also pointed out that ICD’s Financial Intelligence Unit (FIU) generates information that “is used by the competent authorities in money laudering investigations" and suggests that “the usefulness of said financial intelligence could be increased with a greater feedback by the authorities using it.”

“The creation of financial intelligence by the FIU uses different databases that provide added value to the Suspicious Transaction Reports (STR) received by reporting entities,” according to GAFILAT. “The different bodies involved in money laudering prevention seek to work in constant contact from the beginning of the investigations to achieve an efficient exchange of information and experience, in addition to the bimonthly meetings held by the Money Laundering Prosecutor’s Office and the FIU in terms of coordination. Likewise, the efforts made by the law enforcement institutions are recognized.”

Costa Rica “could benefit from the allocation of more economic, human, and technological resources sufficient to carry out their duties in a more effective manner,” according to GAFILAT's report.
Share