Identifier
Created
Classification
Origin
09MONTEVIDEO734
2009-12-17 16:57:00
UNCLASSIFIED
Embassy Montevideo
Cable title:  

INCSR II -- URUGUAY

Tags:  EFIN KCRM PTER SNAR UY 
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VZCZCXYZ1118
RR RUEHWEB

DE RUEHMN #0734/01 3511657
ZNR UUUUU ZZH
R 171657Z DEC 09
FM AMEMBASSY MONTEVIDEO
TO RUEHC/SECSTATE WASHDC 0087
INFO RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHMN/AMEMBASSY MONTEVIDEO
UNCLAS MONTEVIDEO 000734 

SIPDIS
STATE FOR INL, SCT AND EEB
TREASURY FOR FINCEN
JUSTICE FOR AFMLS, OIA AND OPDAT

E.O. 12958: N/A
TAGS: EFIN KCRM PTER SNAR UY
SUBJECT: INCSR II -- URUGUAY

REF: STATE 14598

UNCLAS MONTEVIDEO 000734

SIPDIS
STATE FOR INL, SCT AND EEB
TREASURY FOR FINCEN
JUSTICE FOR AFMLS, OIA AND OPDAT

E.O. 12958: N/A
TAGS: EFIN KCRM PTER SNAR UY
SUBJECT: INCSR II -- URUGUAY

REF: STATE 14598


1. Post submits the 2009-2010 INCSR II report. An e-mail copy
with tracked changed was delivered by e-mail, per reftel
instructions.




2. While the level of money laundering and related crimes is
considered relatively low in Uruguay, the country's financial
system remains vulnerable to this threat as well as terrorist
financing risks associated with international sources that may be
involved in Uruguay's cross-border financial operations. Officials
from the Uruguayan police and judiciary assess that there is a
growing presence of Mexican and Colombian cartels in the Southern
Cone and fear they will begin operating in earnest in Uruguay. Drug
dealers are slowly starting to participate in other illicit
activities like car theft and trafficking in persons, according to
the police. The Government of Uruguay (GOU) acknowledges that there
is also a risk of money laundering in the real estate sector, in
free zones and in bureaus that administer corporations and is
working to develop new regulations soon to address these
vulnerabilities.




3. In the past, Uruguay's strict bank secrecy laws, liberal
currency exchange and capital mobility regulations, and overall
economic stability made it a regional financial center (mainly for
Argentine depositors) vulnerable to money laundering, though the
extent and the nature of suspicious financial transactions have
been unclear. In recent years, however, Uruguay has made
significant efforts to expand the reach and strength of its
anti-money laundering and counterterrorist financing (AML/CTF)
regime, including by enacting several laws to criminalize money
laundering and terrorist financing. The most recent law (Law
18.494, passed in June 2009) significantly upgrades Uruguay's
anti-money laundering efforts by giving national authorities more
flexibility to fight money laundering and terrorism financing.
These recent developments have led to the investigation of 22 cases
--10 of which started in 2009 at the influx of the new courts
specialized on organized crime-- and the prosecution of 39
individuals. New legislation and enforcement efforts also resulted
in the freezing of $20 million in assets, the detection of $2.5
million in undeclared cross-border cash and other financial

instrument movements, and increases in suspicious activities
reports and information requests about international financial
activities.




4. The 2009 GAFISUD mutual evaluation of Uruguay showed a strong
improvement over the 2006 evaluation. According to GAFISUD,
Uruguay "fully complied" with 13 of FTAF's 40+9 recommendations,
"mostly complied" with 23, "partially complied" with 11 and did
"not comply" with only 2. This is a strong improvement over 2006
when it "fully complied" with only 5, "mostly complied" with 13,
"partially complied" with 12 and did "not comply" with 19. The
evaluation did not take into account the developments of Law 18.494
passed in mid-2009, which according to GOU officials, address
several of GAFISUD's concerns.




5. Uruguay's financial sector consists of: one government owned
commercial bank (which has roughly half of total deposits and
credits),one government owned mortgage bank, 12 foreign-owned
banks, 6 offshore banks, 11 cooperatives of financial
intermediation, 6 financial houses, 5 administrators of previous
savings, 12 credit administrators, 85 exchange houses and 21
representative offices of foreign banks. The six offshore banks are
subject to the same laws, regulations, and controls as local banks,
with the GOU requiring them to be licensed through a formal process
that includes a background investigation. Offshore trusts are not
allowed. Bearer shares may not be used in banks and institutions
under the authority of the Central Bank, and any share transactions
must be authorized by the Central Bank. The financial private
sector, most of which is foreign-owned, has developed
self-regulatory measures against money laundering, such as the
Codes of Conduct approved by the Association of Banks and the
Chamber of Financial Entities (1997),the Association of Exchange
Houses (2001),and the Securities Market (2002).



6. There are twelve free trade zones located throughout the
country. While most are dedicated almost exclusively to
warehousing, three host a wide variety of tenants performing a wide
range of services, including financial services. Two free trade
zones were created exclusively for the development of the paper and
pulp industry. Some of the warehouse-style free trade zones have
been used as transit points for containers of counterfeit goods
bound for Brazil and Paraguay. There are nine casinos, eight of
which are government owned, and 28 premises with slot machines
(although media reports indicate a problem with businesses running
unregistered slot machines). Four of the eight government-owned
casinos are run by the state, and the other four by private sector
concessions. Fiduciary companies called SAFIs (Anonymous Societies
for Financial Investment) are also thought to be a convenient
conduit for illegal money transactions. As of January 1, 2006, all
SAFIs were required to provide the names of their directors to the
Finance Ministry. In addition, the GOU implemented a comprehensive
tax reform law in July 2007, which prohibited the establishment of
new SAFIs as of that date. All existing SAFIs are to be eliminated
by January 1, 2010. The tax reform law also implemented a personal
income tax for the first time in Uruguay.




7. Uruguay achieved several notable actions against financial
crime in 2008 and 2009. Parliament passed laws 18.362 and 18.390 in
October 2008, which created two courts and two prosecutor's offices
dedicated to prosecuting organized crime. These offices --which
started working in January 1, 2009--, deal with money laundering,
terrorism financing, banking fraud, tax fraud, counterfeiting, as
well as drug trafficking, corruption, trafficking of weapons, child
prostitution, among other crimes. Law 18.494, passed in June 2009,
significantly upgraded Uruguay's anti-money laundering regime by
incorporating new reporting agents and new preceding crimes, and
including detailed provisions on the use of precautionary and
seizure measures, as well as controlled delivery. Law 18.494 also
incorporates and regulates the use of new investigation techniques
--such as electronic surveillance, use of collaborators and
undercover agents--, and creates a protection system for victims,
witnesses and collaborators. Decrees 296/09 and 305/09 (from June
22, 2009 and October 26, 2009 respectively) created the first
"Comprehensive Permanent National Plan Against Drug Trafficking and
Money Laundering" that was designed by the Coordination Commission
for Anti-Money Laundering and Terrorism Financing (this commission
was created in October 2008). While not publicly available the
Plan greatly focuses on improving the coordination among different
institutions involved in anti-money laundering efforts.




8. Since 2005, 43 individuals have been prosecuted for money
laundering; 40 were related to drugs and 3 to sexual exploitation.
Uruguay's first arrest and prosecution for money laundering (under
Law 17.835) occurred in October 2005 and resulted in the conviction
of the offender. In another ongoing high-profile case, 14 people
were indicted in September 2006 for a money laundering charge tied
to the largest cocaine seizure in Uruguay at that time; in June
2008 the kingpin was convicted and in November 2009 five
individuals, including a well know attorney, were prosecuted. This
case significantly invigorated the GOU's efforts to fight money
laundering and to push for increased reporting of suspicious
activities. In the November 2009 prosecutions, the GOU applied the
set of new investigative techniques (the use of collaborators and
the improved electronic surveillance) provided by Law 18.494 for
the first time. The use of new techniques has triggered a moderate
public debate over the need to keep a balance between investigative
requirements, respect for the privacy of individuals, and potential
uncertainty in the practice of law. Other cases involving another
large cocaine seizure and proceeds from trafficking in 2007 are
also under investigation. There have been no reported cases or
investigations related to terrorist financing.




9. Unlike in neighboring Argentina and Brazil, tax evasion is not
an offense in Uruguay, which in practice limits cooperation
possibilities because the local Financial Intelligence Unit's
Financial Information and Analysis Unit (UIAF) cannot share
tax-related information with its counterparts. Nevertheless, the
UIAF is becoming increasingly active in cooperation with
counterpart financial units and judiciaries from other countries.
In 2009, the UIAF received 54 information requests from the
Judiciary and 48 requests from other financial units abroad.


10. In Uruguay, money laundering is treated as an autonomous
criminal offense, separate from the underlying crimes, which
extends, under certain circumstances, to offenses committed in
other countries. Money laundering is criminalized under Law 17.343
of 2001, Law 17.835 of 2004, and Law 18.494 of 2009. The courts
have the power to seize and confiscate property, products or
financial instruments linked to money laundering activities. Law
17.343 identifies money laundering predicate offenses to include
narcotics trafficking; corruption; terrorism; smuggling (of items
valued more than $20,000); illegal trafficking in weapons,
explosives and ammunition; trafficking in human organs, tissues,
and medications; trafficking in human beings; extortion;
kidnapping; bribery; trafficking in nuclear and toxic substances;
and illegal trafficking in animals or antiques. Law 18.494
incorporates seven new predicate offenses: i) fraud; ii)
embezzlement; iii) fraudulent bankruptcy; iv) fraudulent
insolvency; v) offenses against trademarks and intellectual
property rights; vi) offenses related to trafficking in persons and
sexual exploitation (involving child prostitution and pornography
or related to trafficking or sexual exploitation); and vii)
counterfeiting or alteration of currency.




11. Four government bodies are responsible for coordinating GOU
efforts to combat money laundering: (1) the UIAF, (2) the National
Anti-Drug Secretariat, (3) the Coordination Commission for
Anti-Money Laundering and Terrorism Financing, and (4) the National
Internal Audit. Decree 245/007 (passed July 2007),transformed the
Center for Training on Money Laundering (CECPLA) into the
Coordination Commission for Anti-Money Laundering and Terrorism
Financing. The Commission works under the National Anti-Drug
Secretariat, which is the senior authority for anti-money
laundering policy and is headed by the President's Deputy Chief of
Staff. The Commission's board is composed of government entities
involved in anti-money laundering efforts: the head of the UIAF and
the Ministries of Education (via prosecutors),of the Interior (via
the police force),Defense (via the Naval Prefecture),and Economy
and Finance. The Director of the Commission serves as coordinator
for all government entities involved and sets general policy
guidelines. The Director defines and implements GOU policies, in
coordination with the Finance Ministry and the UIAF. Decree 239/09
(passed May 2009) created the National AML Secretariat (National
Secretariat Against Laundering of Assets, or Secretaria Nacional
Antilavado by its Spanish acronym) and tasked it with: i)
coordinating the execution of AML/TF polices with other
institutions; and ii) coordinating and executing AML/TF training
programs for banks' staff, agents involved in AML/TF prevention and
repression (e.g. judges, prosecutors and police officials). The
decree incorporates the Secretary General into the AML Secretariat
and delineates his functions. Among other duties, the Secretary
General of the AML Secretariat is in charge of convoking the
Coordination Commission for Anti-Money Laundering and Terrorism
Financing, acting as National Coordinator before GAFISUD, and
representing the GOU at OAS's CICAD.




12. The UIAF is responsible for supervising all financial
institutions, and the National Internal Audit Office (AIN) is
responsible for overseeing all nonfinancial institutions, such as
casinos and real estate firms. The recent Central Bank's charter
(passed by Law 18.401 in October 2008) placed the UIAF under the
Central Bank's Superintendent of Financial Services, and tasked it
with several new activities that enhance its abilities as a
mechanism to stop money laundering. The UIAF is structured in
three units: information and analysis, exchange houses, and money
laundering control. GOU and private sector entities cannot refuse
to provide information to the UIAF on the grounds of banking,
professional or tax secrecies. Law 17.835 expands the realm of
entities required to file Suspicious Activity Reports (SARs),
making reporting of such suspicious financial activities a legal
obligation, and conferring upon the UIAF the authority to request
additional related information. Law 18.494 designates ten new types
of individuals/enterprises required to report unusual or suspicious
transactions and mandates SARs reporters to include information on
suspicious intended transactions --even if they were not finally
carried out-- and on those transactions that albeit licit are
suspected of being related to individuals related to terrorism
financing. Reports to the UIAF are confidential and secrecy can
only be lifted per a criminal court order. Fines for failure to
report range from 1,000 indexed units to 20,000,000 indexed units
(equivalent to about $100 to $2,000,000 as of December 2009). The
2008 rendering of accounts (Law 18.362) granted the AIN additional

funding of about $1 million for staffing needs, but the agency will
need further funding to achieve its new While severely
understaffed in the past, the UIAF achieved its goal in 2008 of
establishing a staff of 19 people. In 2009, the UIAF consolidated
its work and increased the number of inspections. Through initial
funding from the Organization of American States (OAS),the UIAF is
updating its hardware and software systems in order to receive SARs
electronically, develop electronic early-alarm systems for SARs,
and improve control and analysis of its lists.




13. During 2009, Treasury's Office of Technical Assistance (OTA)
provided technical assistance on financial enforcement to the
Central Bank and the Anti-Money Laundering Secretariat. An
Information Technology Specialist visited the UIAF in October to
assess its information systems with a view to enhancing the overall
system by adding more robust analytical software and visualization
tools. In mid-November an expert from OTA's Financial Enforcement
Unit delivered a three-day training course to Financial Analysts.
Sixteen out of the eighteen UIAF analysts participated in the
training. In early November another team of instructors from OTA's
Financial Enforcement Unit delivered Financial Investigative
Techniques training to a select group of twenty-five professionals
from diverse backgrounds. The group included some of the country's
highest profile judges and prosecutors, along with officials from
Uruguay's intelligence, customs and anti-drug agencies. The three
programs were much appreciated and the heads of the UIAF and the
Anti-Money Laundering Secretariat have requested OTA continued
assistance with advanced editions of courses in 2010. The head of
OTA's Financial Investigative Techniques team singled out
Uruguay????s
recently upgraded anti-money laundering legislation for special
praise. In August 2009, the Embassy invited the Presidency's Chief
of Staff and the heads of the Anti-Money Laundering and Anti-Drug
Secretariats to a ten-day official trip to Washington and New York
where they met numerous Anti-Money Laundering officials. Both
countries expressed their willingness to sign an agreement to split
the value of assets seized in joint operations, but no progress has
been made as of December 2009.




14. The UIAF has circulated to financial institutions the list of
individuals and entities included in UN 1267 Sanctions Committee
and published it on its web page. It also works with lists from the
Department of Treasury's Office of Foreign Assets Control (OFAC)
and the European Union and is exploring options to purchase
commercial databases with global blacklists. While the UIAF does
not transmit OFAC's list directly to its supervised institutions,
anti-money laundering officials told Post the vast majority of
local financial institutions are acquainted with OFAC's lists and
use them actively from a best practices standpoint. The UIAF is
also working on a Politically Exposed Persons (PEPs) list that will
also be published on their website.




15. Law 17.835 from 2004 and Law 18.494 from 2009 significantly
strengthened the GOU's anti-money laundering regime by including
specific provisions related to the financing of terrorism and to
the freezing of assets linked to terrorist organizations. Under Law
17.835, terrorist financing was a separate, autonomous offense that
can be prosecuted from other terrorism-related crimes. Laws 17.835
and 18.494suffer, however, from a narrow definition, which is
limited to the financing of terrorists or terrorist organizations
where specific terrorist acts have been committed or are being
planned. As a result, the laws do not specifically cover the
provision or collection of funds by known terrorists or terrorist
organizations for purposes other than terrorist acts




16. Beyond criminalizing terrorist financing, Law 17.835 provided
the courts with the power to seize and confiscate property,
products or financial instruments linked to money laundering
activities. Law 18.494 improved the seizure regime by listing the
kind of property that can be seized while establishing the
possibility of seizing assets of similar worth or imposing a fine
when listed property cannot be seized. Under the new legislation,
based on a prosecutor's request, courts can seize: prohibited
narcotics and psychotropic substances confiscated in the process;
property or instruments used in committing the criminal offense or
the punishable preparatory activity; property and products
considered proceeds of the criminal offense. Courts can also seize

property and products coming from the use of the proceeds of the
criminal offense, including: property and products into which
proceeds of the criminal offense have been converted or mixed and;
income or other benefits derived from the property and products
that are proceeds of the criminal offense. If such property cannot
be seized the court can seize any other property of the convicted
offender of an equivalent value. Seizure by "operation of the law"
allows courts to seize assets in four cases: i) those assets
belonging to fugitives against whom a warrant of arrest has been
issued and have not appeared or been arrested in over six months;
ii) assets that have been frozen and whose holders failed to prove
their legal origin within a six months period; iii) undeclared
assets in transit whose holders also failed to prove their legal
origin within a six months period; and iv) proceeds of criminal
offenses or connected criminal offenses that are discovered and not
claimed within a period of six months.




17. Despite these powers, the way real estate is registered
complicates efforts to track money laundering in this sector,
especially in the partially foreign-owned tourist sector. The UIAF
and other government agencies must obtain a judicial order to have
access to the name of titleholders. The GOU is in the process of
implementing a national computerized registry that will facilitate
the UIAF's access to titleholders' names, is at an advanced stage
of implementation. The UIAF is already using the loaded data for
investigation purposes. In December 2009, the Ministry of
Agriculture signed an agreement with settlers to establish a joint
production entity in a 6,000 acre farm that had been seized in

2007. In May 2008, the GOU signed a cooperation memorandum with the
OAS to get assistance in developing a fund to administer seized
assets for Uruguay, Argentina, and Chile. The GOU expects to launch
the fund in the first half of 2009. A by-product of the program
was a best practices document that was approved by CICAD in
November 2009.




18. Law 18.494 enables criminal courts to adopt precautionary
measures (under their own initiative or at the request of an
interested party) at any stage of proceedings, including the
preliminary hearing. Measures adopted during the preliminary
hearing stage shall become void if GOU prosecutors do not request a
trial within a two years term. Precautionary measures shall be
adopted when considered indispensable to protect the State's right
to have assets at its disposal once seized and provided that there
is a danger of impairment or frustration of this right due to the
delay of the proceedings. Law 18.494 improved the precautionary
measures regime by exempting the GOU from depositing a bond to
cover potential losses or damages (it would be however liable for
damages if assets are not finally seized),and allowing courts to
swiftly auction certain assets. The law provides that assets
subject to precautionary measures that run the risk of perishing,
deteriorating or depreciating, or whose adequate preservation would
be overly costly, can be auctioned swiftly, and mandates the GOU to
deposit the proceeds of the auction in indexed units (an unit
designed to avoid deterioration of purchasing power caused by
inflation) or other units that ensure the preservation of value.




19. The UIAF can instruct those institutions subject to the
Central Bank's control to stop, for up to seventy-two hours, the
execution of operations suspected of involving funds proceeding
from criminal offenses. The decision must be communicated
immediately to the competent criminal court that can determine to
freeze the assets with no prior notification. Up to 2008 the GOU
had frozen assets for $20 million. Seventeen of the $20 million
dollars were frozen just in 2009. Some major cases, involving a
Russian church and Brazilian and Greek citizens, are related to
requests from abroad.




20. Under Law 17.835, all obligated entities must implement
anti-money laundering policies, such as thoroughly identifying
customers, recording transactions more than $10,000 in internal
databases, and reporting suspicious transactions to the UIAF. This
obligation extends to all financial intermediaries, including
banks, currency exchange houses, stockbrokers, insurance companies,
casinos, art dealers, and real estate and fiduciary companies. Law
18.494 obliges ten new types of individuals or enterprises to
report unusual or suspicious transactions. New obligated subjects
include: i) businesses that render services of lease and

safekeeping of safe deposit boxes, transportation of assets and
transfer or sending of funds; ii) professional trust managers, iii)
persons natural or judicial who, from Uruguay, professionally
provide advisory services in the areas of investment, placement and
other financial transactions to clients; iv) casinos; v) real
estate brokers other intermediaries in transactions involving real
estate; vi) notaries, when carrying out certain operations for
their clients; vii) auctioneers; viii) natural or juridical persons
dedicated to the purchase and sale of antiques, works of art and
precious metals or stones; ix) free trade zones operators; x) and
natural or judicial persons who carry out transactions or
administer corporations on behalf of third parties.




21. Law 17.835 and Law 18.494 extended reporting requirements to
all persons entering or exiting Uruguay with more than $10,000 in
cash or in monetary instruments. This measure has resulted in the
detection of over $ 2.0 million in about 25 undeclared cross-border
movements since the declaration requirement entered into force in
December 2006. In 2009, the GOU detected three undeclared
operations for over $300,000. Since all movements were detected at
one single customs office, and given Uruguay's porous borders, the
GOU suspects that many more movements are passing undetected. Law
18.494 raised the maximum fine on undeclared funds from 30 percent
to 100 percent of undeclared funds. Under the new law competent
authorities can determine precautionary measures to ensure that the
State collects the fine, as well as seize the undeclared assets
when there is a well founded suspicion that they derive from a
preceding crime (even if such crime was committed abroad). To get
them back, the asset holder has to prove the legal origin of his
assets.




22. Lawyers, accountants, and other nonbanking professionals that
habitually carry out financial transactions or manage commercial
companies on behalf of third parties are also required to identify
customers whose transactions exceed $15,000 and report suspicious
activities of any amount.




23. Implementing regulations have been issued by the Central Bank
for all entities it supervises (banks, currency exchange houses,
stockbrokers, and insurance companies),and are being issued by the
Ministry of Economy and Finance for all other reporting entities.
On November 26, 2007, the Central Bank issued Circular 1.978, which
requires financial intermediary institutions, exchange houses,
credit administration companies and correspondent financial
institutions to implement detailed anti-money laundering and
counterterrorist financing policies. This circular mandates
financial intermediaries to report conversion of foreign exchange
or precious metals over $10,000 into bank checks, deposits or other
liquid instruments; conversion of foreign exchange or precious
metals over $10,000 into cash; cash withdrawals over $10,000; and
wire transfers over $ 1,000. As of November 2008, the Central
Bank's Capital Market Division is considering requesting reports of
transactions with securities over $10,000. Circular 1.978 requires
these institutions to pay special attention to business with PEPs;
persons, companies, and financial institutions from countries that
are not members of the Financial Action Task Force (FATF) or a
FATF-style regional body; and persons, companies, and financial
institutions from countries that are subject to FATF special
measures for failure to comply with the FATF Recommendations.




24. Obligated entities are mandated to know their customers on a
permanent basis, keep adequate records and report suspicious
activities to the UIAF. Compliance by reporting entities increased
from 94 SARs in all of 2006 to 174 SARs in 2009. SARs are largely
concentrated within the financial system. While in 2009 banks and
exchange houses accounted for 60 percent and 19 percent of total
reports, there has been a gradual increase in SARs from other
institutions, including capital market agents and firms that wire
funds. Other obligated entities, like off shore banks casinos or
real estate agents, have issued few SARs. Eight cases stemming from
SARs were sent to the Judiciary in 2009. Four cases stemming from
SARs have ended in prosecutions in recent years. The recent high
profile money laundering cases have provided a boost to the money
laundering issue and the Central Bank's efforts.


25. As stated above, Law 18.494 from 2009 incorporates or provides
for more detailed regulation of new investigative techniques
--controlled delivery, electronic surveillance, the collaborator
and the undercover agent-- and a witness protection program.




26. On controlled delivery, the 2009 law provides that during the
investigation of an offense and at the request of the prosecutor a
criminal judge can authorize: i) the circulation of prohibited
substances or any other goods that may be the object of a crime,
ii) the use of all available technological means to facilitate the
elucidation of the case.




27. The law also provides that at any stage of the criminal
proceedings, the prosecutor may come to an agreement with a person
that has committed organized crime offenses to cut his sentence in
half or even not press charges in case the offender: i) reveals the
identity of "other perpetrators, co-perpetrators, accomplices or
aiders and abettors to the acts under investigation or other
connected acts"; ii) "provides sufficient information that would
allow for the prosecution of crime syndicates or the definitive
resolution of the case or significant progress in the
investigation; or iii) provides information that would allow for
the seizure of elements that could serve for the commission of
crimes, their planning and even recuperation of proceedings of
crimes.




28. At the request of the prosecutor, courts may authorize public
officials to act under an assumed identity and to acquire and
transport objects, effects and instruments linked with criminal
activity and to defer seizure of the same. The information gathered
by the undercover agent must be submitted to those who authorized
the investigation at the earliest convenience.




29. Witnesses, victims when acting as such, experts and
collaborators, may be subject to protective measures when there is
a well-founded suspicion that their lives or physical integrity as
well as that of their families are at great risk. Protective
measures include: i) physical protection of these individuals by
the police; ii) mechanisms to impede their visual identification by
third parties unconnected to the process when they have to appear
at any proceeding for gathering of evidence; iii) being summoned in
a confidential manner; iv) possibility to take depositions by
audiovisual means or other technologies; v) prohibition of
registration and disclosure of their images by private parties and
the media; vi) relocation under a new identity; vii) total or
partial prohibition against revealing information concerning their
identity or whereabouts; viii) and economic assistance in cases of
relocation. Decree 499/09 (passed July 1, 2009) incorporates GOU
officials fighting Money Laundering and Drug Trafficking into the
witness protection program.




30. The GOU states that safeguarding the financial sector from
money laundering is a priority, and Uruguay remains active in
international anti-money laundering efforts. Uruguay is a party to
the 1988 UN Drug Convention, the UN Convention for the Suppression
of the Financing of Terrorism, the UN Convention against
Transnational Organized Crime, and the UN Convention against
Corruption. The GOU is also a member of the OAS Inter-American Drug
Abuse Control Commission (CICAD) Experts Group to Control Money
Laundering. Uruguay and the United States are parties to a mutual
legal assistance treaty that entered into force in 1994. Uruguay is
also a founding member of the Financial Action Task Force for South
America (GAFISUD). Since early 2005, the former director of the
GOU's Center for Training on Money Laundering Issues (CECPLA) has
served as GAFISUD Executive Secretary, and has offered the services
of Uruguay's anti-money laundering training center to GAFISUD.




31. The GOU has taken significant steps over the past few years to
strengthen its anti-money laundering and counterterrorist financing
regime. Law 18.494 significantly improved the regime by
incorporating new money laundering predicate offenses, requiring
new types of financial and non-financial entities supervised by the
UIAF and the AIN to report suspicious transactions, and providing

for new investigation techniques (such as undercover and
collaborator agents),a new witness protection program, and new
measures to facilitate and speed up the seizure of assets.




32. Also in 2009, the UIAF submitted its application for Egmont
Group membership sponsored by Brazil. The GOU is confident that
Egmont will approve its membership in its 2010 plenary. Gaining
membership in the Egmont Group would enable the UIAF to share
financial information with other FIUs globally. In fact, the GOU
waited for the passage of Law 18.494 before submitting its
application to Egmont since it enables de UIAF to exchange
information to fight terrorism financing, which had been
involuntarily left out of previous provisions. Under the new law,
the UIAF may exchange information relevant to the investigation of
the criminal offenses of money laundering and financing of
terrorism with its counterparts of other States.




33. The Government of Uruguay (GOU) acknowledges that there is
also a risk of money laundering in the real estate sector, in free
zones, and in bureaus that create or administer corporations. To
this extent it is working to address these vulnerabilities by
developing new regulations on these sectors, which is expected to
be in place in the first half of 2010. The GOU also acknowledges
there is a risk of money laundering in the sports sector but is
addressing the risk mainly through its participation in the FTAF,
which started working on the issue in mid-2009. To continue its
recent progress, Uruguay should continue the implementation and
enforcement of recently enacted legislation. Gaining membership in
the Egmont Group would enable the UIAF to share financial
information with other FIUs globally.
MATTHEWMAN