It is difficult to pursue financial transactions without understanding the businesses and illicit markets behind them. Understanding the cost and revenue structure of criminal organizations. What are they selling? Where? What are the essential inputs? What is the structure of the competition? The search for answers to these questions has been part of the second and last day of the Latin American Security Summit in Guayaquil, which focused on addressing money laundering and the recruitment of young people for criminal governance.
“Four percent of the resources that enter the Colombian economy are the product of drug trafficking,” explained Daniel Mejía, a professor at the Universidad de los Andes in Colombia. Through data mining, Mejía and his team broke down the production costs of each kilo of cocaine produced in Colombia and tracked each product they use, such as fuel, and thus managed to determine the places where organized crime obtains supplies to transform the coca leaf into a block of cocaine, a tool used in academia that could strengthen the work of the judicial police and investigators. “Analytical training is key, because it is useless to have the most advanced technology and tools if we do not know how to use them and thus hit crime,” he added.
The problem that the countries agreed on is that there is a disconnection between the financial analysis units. “In 2018, the Attorney General of Colombia received 98 reports of suspicious operations by organized crime. Can we believe that they only made that many transactions?” Mejía asked. Crime exists because there is an economic gain. “Cut off the oxygen to organized crime,” was the main message from Ilan Goldfjan, president of the Inter-American Development Bank (IDB) at the start of the Summit. “Hitmen, mules, criminals and corrupt officials without money cannot be paid,” added Paolo Brucato, provincial commander of Italy’s Guardia di Finanza, which manages 400 databases for its financial analyses.
The Ecuadorian case is critical. The Financial Analysis Unit (UAFE) only has two databases to combat money laundering, it is not even connected to the Internal Revenue Service. “In 2023, banks in Ecuador reported that 12.7% of their deposits were in cash and this is totally atypical compared to the region,” said José Neira, director of UAFE in Ecuador.
“It is sad to say that these organized groups have achieved what we call regional integration, which has been promoted for many decades in Latin America – not always successfully – in just a few months,” said Nathalie Alvarado, coordinator of Citizen Security and Justice at the IDB. Organized crime businesses are expanding into the poorest areas of cities and where criminal governance exists. “It is a strategy to distance the State, to keep it out. And it works because it removes the State’s incentive to enter those areas,” said Benjamin Lessing, associate professor of the department at the University of Chicago. “We have lost territory due to crime,” acknowledged Ecuador’s Minister of the Interior, Monica Palencia.
“We have to give a regional response, with greater coordination with our police forces, a transnational policy of confiscating property and striking financing more quickly, eliminating bureaucracy,” said José Santiváñez, Minister of the Interior of Peru, where they have detected a dozen criminal gangs that are present throughout the region, such as Tren de Aragua, Comando Vermelho or Los Tiguerones. According to Santiváñez, for three months they have been implementing a policy of “hunting criminals.” “We have neighborhood councils that are the eyes and ears of the police, they are the neighbors themselves who report illegal or irregular acts,” he explained.
The IDB proposed a regional alliance to strengthen security and work on three objectives: limit the influence of organized crime on the most vulnerable populations; improve the capacities of institutions in the criminal justice chain; and affect the flow of money that allows them to expand their control and influence. Ecuador’s Minister of the Interior will serve as president and the IDB will serve as technical secretary. The Summit ended with the intention of Argentina, Panama, Paraguay, Costa Rica, and Honduras to participate in the commissions; however, there was no document that sealed the agreement.
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