The Tri-Border Area (TBA) of South America encompassing Paraguay, Argentina, and Brazil is considered a hub for criminal activities for terrorist financing networks. Their broad range of large-scale criminal schemes include trafficking of arms and drugs, smuggling of goods and money laundering (ML). Terrorist groups engage in illicit activity in the TBA, carry out transactions with criminals from the region, and obtain funding from criminal organizations operating in the TBA. Despite expressing a political commitment to combat ML and counter the financing of terrorism (CFT) by adopting the United Nations (UN) Security Council Resolutions’ obligations and Financial Action Task Force recommendations, the governments in the TBA are still facing challenges in deterring crime and establishing state authority in the region.
Countering Money Laundering and the Financing of Terrorism in South America
In 2022, ABA ROLI launched the Countering the Financing of Terrorism in South America program which strives to improve the capacity of the governments and obligated entities in the TBA to effectively counter the financing of terrorism in the region. Funded by the US Department of State Bureau of Counterterrorism, the program works closely with central and local government agencies, such as Paraguay’s National Secretariat for the Prevention of Money or Asset Laundering or Asset Forfeiture (Spanish, La Secretaría de Prevención de Lavado de Dinero o Bienes – SEPRELAD), and financial and non-financial entities, such as the Association of Banks (ASOBAN) on anti-money laundering (AML) and CFT obligations. The program provides technical support to the governments, financial sector, and civil society of the TBA to combat the financing of terrorism, thereby reducing the capacity of terrorist organizations to move assets and to conduct terrorist attacks. ABA ROLI is currently implementing the Countering the Financing of Terrorism in South America Program, in partnership with the International Governance and Risk Institute (GovRisk) and K2 Integrity.
Since 2012, GovRisk has been a leading provider of AML/CFT technical assistance in Latin America for the UK Government and other international donors. GovRisk has provided support to public sector stakeholders and civil society in Argentina, Paraguay, Uruguay, Cuba, Guatemala, Peru, Mexico and Panama. GovRisk brings a strong working relationship with key stakeholder groups in each of the TBA countries.
K2 Integrity specializes in AML/CFT, targeted financial sanctions regimes, and their implementation in Latin America. K2 Integrity’s team is comprised of a peerless cadre of individuals who helped design and spearhead the post-9/11 CFT regime in the United States and globally, including through senior leadership positions at the FATF, the Egmont Group, the United States National Security Council, The White House, and the United States Department of the Treasury's Office of Terrorism and Financial Intelligence (TFI). K2 Integrity conducts jurisdictional terrorist financing risk assessments to improve and update the understanding of terrorist financing-specific risks. Members of the K2 Integrity team have worked on sanctions at the highest levels of the United States Government and governments of other countries, including one Latin American country in the Tri-Border Area.
Furthermore, meaningful partnerships have been established with associations of exchange houses, government ministries, banks, security forces, and the judiciary, resulting in substantial advancements toward the program’s objective of raising awareness and building capacity in these matters. In fact, since ABA ROLI initiated the program, more than 30 capacity-building training initiatives have been held across all three participating countries. The initiatives engaged with a diverse range of stakeholders from both the public and private sectors, such as SEPRELAD in Paraguay and the Argentine Public and Private Banks Association (Spanish, Asociación de Bancos Públicos y Privados de la República Argentina - ABAPRA). Notably, these initiatives included an awareness workshop on financial terrorism prevention tools at the Central Bank of Paraguay (Spanish, Banco Central del Paraguay – BCP); a workshop on strengthening the supervision of financial and non-financial entities in AML/ CFT matters; a workshop to strengthen the AML/CFT Preventive System, with more than 100 participants in attendance; and a workshop on corporate governance and code of conduct for Non-Profit Organizations (Spanish, Las Organizaciones Sin Fines de Lucro – OSFL), with 40 representatives in attendance.
The program’s activities address the following objectives:
- Increase the understanding on CFT and AML
- Increase institutional capacity to combat CFT and AML
- Strengthen targeted financial sanctions mechanisms
- Increase coordinating capacity among the TBA countries