Consolidated assessment ratings – Ecuador’s measures to combat money laundering and terrorist financing & Uganda’s progress in strengthening measures to tackle money laundering and terrorist financing

On 9 January 2023, the Financial Action Task Force (FATF) has published an update to its Consolidated assessment ratings together with Ecuador’s Mutual Evaluation Report of the Republic of Ecuador and Uganda’s 9th Enhanced Follow-up Report & 4th Technical Compliance Re-Rating, addressing the progresses made in relation to tackle money laundering and terrorist financing.
CONSOLIDATED ASSESSMENT RATINGS
The updated Consolidated assessment ratings provide an up-to-date overview of all assessed countries concerning the effectiveness and technical compliance with the FATF Recommendations, using the FATF Methodology together with the FATF 4th Round Procedures. These ratings should be read in conjunction with the detailed Mutual Evaluations. All these documents are available on the FATF website.
This update of FATF’s Consolidated assessment ratings incorporates the findings of the Mutual Evaluation Report of Ecuador & Uganda’s progress in strengthening measures to tackle money laundering and terrorist financing (see national details below). Notable current characteristics and changes compared to previous reports on both effectiveness of Anti-Money Laundering/Combating Financial Terrorism (AML/CFT) systems as well as technical compliance with the FATF Recommendations are the following:
Ecuador
R.17 (Reliance on third parties) rated at NC (Non-compliant – There are major shortcomings)
Uganda
R.12 (Politically exposed persons) rated at C (Compliant)
R.22 (Designated Non-Financial Businesses and Professions (DNFBPs): Customer due diligence) rated at LC (Largely compliant – There are only minor shortcomings)
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ECUADOR’S MUTUAL EVALUATION REPORT OF THE REPUBLIC OF ECUADOR
This report provides a summary of AML/CFT measures in place in the Republic of Ecuador at the date of the on-site visit, which took place between 28 March 28 and 8 April 2022. The report analyses the level of compliance with the FATF 40 Recommendations and the level of effectiveness of the AML/CFT system in the country, and recommends how the system can be strengthened.
Ecuador has made significant efforts to identify and assess its ML/TF risks. The country developed and approved a national risk assessment (NRA) in 2021, the results of which are generally reasonable, and largely reflect the country’s main risks. There are certain areas that were not covered in depth in the NRA, such as in relation to virtual assets, but its key areas were addressed by strategic studies, typologies or other relevant reports.
In general, competent authorities have a good understanding of the country’s ML/TF risks. However, there is room for deepening the understanding of the modalities that TF can adopt, especially within the Judiciary. Also, in general, there is good and fluid cooperation and coordination among the main key authorities of the system. In addition, the country has an agency in charge of AML/CFT policy development at the national level, which was recently created.
However, there are limitations in the investigations and convictions for ML. In particular, there are limitations in terms of available human and technological resources, lack of sufficient parallel financial investigations, lack of appropriate formal mechanisms to prioritise ML cases, and limitations in the understanding by some sentencing judges of the judiciary of the autonomy of the ML offence. There is a lack of consistency between the cases sanctioned and the country’s risk profile.
The Ecuadorian regulatory framework does not explicitly prohibit reliance on third parties, except for the case of stock exchange, securities and fund management FIs. Consequently, reliance on third parties would be enabled for FIs in general, with the above caveat. Within this framework, the sectorial regulations do not cover the requirements of Recommendation 17 in view of the cases of reliance on third parties that may exist. Therefore, Recommendation 17 is rated Non-Compliant.
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UGANDA’S 9TH ENHANCED FOLLOW-UP REPORT & 4TH TECHNICAL COMPLIANCE RE-RATING
The Mutual Evaluation Report (MER) of Uganda was adopted by the Task Force in April 2016 and subsequently approved by the Council of Ministers in May 2016. This follow-up report assesses the progress made by Uganda to resolve the technical compliance shortcomings identified in its MER relating to Recommendations 12 and 22. New ratings are given when sufficient progress has been made.
Uganda has made significant overall progress in resolving the technical compliance shortcomings identified in its MER and ratings for 2 Recommendations have been revised. The jurisdiction has fully addressed the deficiencies in respect of R12 (initially re-rated PC), and largely addressed those on R22 (initially rated PC) and the reviewers recommend to upgrade the rating for R.12 (Politically exposed persons) with Compliant (C), and with Largely Compliant (LC) on R.22 (DNFBPs: Customer due diligence).
Uganda will remain in enhanced follow-up and will continue to inform the ESAAMLG of the progress made in improving and implementing its AML/CFT measures.