SRI and combating the crime of Money Laundering
February 29, 2024

Author: Atty. Emily Sampedro Morales 

emily.sampedro@fexlaw.com

 

 

 

Recently our lawyer Emily Sampedro published an article entitled “SRI and the fight against the crime of Money Laundering.” It highlights the role of the institution in the fight and prevention of this type of crime.

 

Over the last few years, Ecuador has faced a tireless fight against Money Laundering, in 2010, Ecuador entered the “black list of non-cooperative countries” of the FATF (International Financial Action Group) for considered a territory of high risk and lack of collaboration in the fight against this crime and the financing of terrorism. With the promulgation of the Comprehensive Organic Criminal Code in 2014, Ecuador left the aforementioned list for having satisfactorily completed the action plan at a technical level to consolidate the anti-money laundering and anti-terrorist financing regime, but in practice we still had a long way to go. to do. In this line, the field of action of effective inter-institutional cooperation was redefined, and within this context, it is important to know about the capacity for action that institutions such as the SRI have in the fight against Money Laundering.

The Internal Revenue Service was created on December 2, 1997 in response to high tax evasion. It is an independent regulatory body in the elaboration of policies and management strategies in tax matters, which over the years, has focused as one of its strategic objectives, increasing the voluntary compliance of taxpayers, in order to improve collection and reduce tax evasion and avoidance. Within the framework of said objective, the SRI created from that, the Money Laundering Unit within the National Directorate of Tax Management, the same one that evolved over time, becoming at the end of 2013 renamed the Fraud Investigation Department. and Money Laundering, and as of May 2016, Tax Intelligence Department. This unit, in addition to the purposes of contributing to the identification of risks in tax matters, operationally coordinates with other similar units in the Prosecutor’s Office and UAFE to compartmentalize information of strategic importance; since, when tax fraud schemes are detected, which constitutes an underlying crime of money laundering, it can lead to the submission of an ROII (Report of Unusual and Unjustified Operation).

From 2014 to 2018, according to the ULA (Money Laundering Unit of the National Police) and the UAFE (Financial and Economic Analysis Unit) this crime has been committed 62 times (of those identified), and in 2019 according to a note released According to the press release distributor Prnewswire, “USD 400,000 million per year is the figure that money laundering is supposed to move in Latin America, 7% of the regional Gross Domestic Product (GDP)”.[1] For its part, the Internal Revenue Service detected a mechanism used to justify capital movements and tax fraud, through the creation of shell companies for invoicing costs/expenses that have not existed since 2010 and that, according to multidimensional statistics that presented on the institutional website, would add up to at least $2.8 billion dollars in transactions.[2] As a result of these actions, criminal complaints related to the aforementioned shell companies have been filed to evade taxes and, in the same way, operations have been carried out against their creators or mentalizers, who sold vouchers in exchange for financial compensation.

It can be seen that the SRI, through the Tax Intelligence Department and other control areas, provide information of vital importance to detect behaviors or typologies that can have an economic impact for the State, an example of this, was reflected in the contribution of the Tax Administration to one of the most emblematic cases of the last decade at a national and international level related to a transnational network dedicated to money laundering based on the smuggling and export of gold from illegal mining in Peru. All this was carried out through two marketing companies identified as Spartan del Ecuador and Clearprocess, companies that moved more than USD 500 million in fraudulent exports, which pretended the legality of their marketing with illegitimate invoices for the purchase and sale of metal ( phantom providers). Regarding these companies, the Internal Revenue Service (SRI) detected that in 2014 they registered unusual purchases for more than USD 157 million and for this reason, an operation was carried out together with the State Attorney General’s Office, the FBI and the Department of Investigation Office. of National Security, in which eight people were prosecuted and more than 230 were investigated, only in Ecuador.

All these companies were investigated through reports of computer forensic analysis, accounting, strategic and operational intelligence, structured fraud risks, notifications on recommendations for risk and threat reduction, and identification of operational risks. In addition to reports of unusual and unjustified operations (ROII) for the UAFE, which most of the time ends with ostensible inter-institutional operations to combat tax fraud and money laundering.

In conclusion, within the problem of the crime of asset collateralization, inter-institutional cooperation[3] has been of vital importance in terms of the exchange of useful information that helps detect and limit the commission of this crime, which, having an international scope , encourages moral and social deterioration and corruption, with destabilizing movements in the economy, in addition to the negative consequences on governability, increase in social violence, concentration of wealth illegally, discredit of the financial system, among other disastrous consequences. .

References:

[1] https://www.elcomercio.com/actualidad/seguridad/actualidad-detenidos-nexos-mossackfonseca-contrabando.html

[2] https://lahora.com.ec/noticia/1102248919/sri-ha-detectado-860-empresas-fantasmas-que-operan-con-facturas-falsas

[3] Article 226 of the Constitution of the Republic of Ecuador determines that State institutions, their agencies, dependencies, public servants or servants and persons acting by virtue of state authority shall only exercise the powers and powers that are attributed in the Constitution and the law. They will have the duty to coordinate actions for the fulfillment of their purposes and to make effective the enjoyment and exercise of the rights recognized in the Constitution.

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