The application of customer due diligences in the Tri-Border Area in South America as a measure to prevent money laundering and the financing of terrorism

Resumo

The purpose of this paper is to conduct a study on the application of due diligence measures in the Tri-Border Area (TBA) in South America as a measure to prevent money laundering and terrorist financing. Within this framework, the regulations are studied and the effectiveness of due diligence measures in relation to the identification and knowledge of natural persons applied by financial institutions in this region is analyzed. According to the Financial Action Task Force (FATF) Recommendations, as well as the internal regulations of the countries that make up the TBA in South America, financial entities, as part of the process of applying due diligence measures have the obligation to identify and know their customers, as well as to record and analyze their transactions. Within this framework, a comparative analysis of the current regulation has been carried out to detect similarities and differences. Regarding the regulation of due diligence measures, the countries that make up the TBA implement in their domestic legal systems the provisions of the FATF Recommendations; however, there is no regulatory connection between the three countries to achieve effective control to prevent money laundering and the financing of terrorist activities. It is necessary that the countries that make up the TBA adopt a uniform policy of coordination on customer identification and knowledge of customers procedures, as well as their operations, to prevent organized crime from having the possibility of violating the control systems of financial institutions to launder money and finance terrorist activities. For this purpose, both analytical, interpretative and comparative methods are used in this research paper.