Consolidated assessment ratings – Venezuela’s measures to combat money laundering and terrorist financing

On 20 February 2023, the FATF has published its latest update to its Consolidated assessment ratings together with the publication of the Mutual Evaluation Report of the Bolivarian Republic of Venezuela on progress in strengthening measures 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. The FATF 40 Recommendations can have one of the following five settings:
C (Compliant)
LC (Largely compliant – There are only minor shortcomings)
PC (Partially compliant – There are moderate shortcomings)
NC (Non-compliant – There are major shortcomings)
NA (Not applicable – A requirement does not apply, due to the structural, legal or institutional features of the country)
This update of FATF’s Consolidated assessment ratings incorporates the findings of the Mutual Evaluation Report of the Bolivarian Republic of Venezuela on progress in strengthening measures to tackle money laundering and terrorist financing (see national details below). Of note, no prior Mutual Evaluation Report is available, hence no changes can be compared. Notable current characteristics on both the effectiveness of AML/CFT systems, as well as technical compliance with the FATF Recommendations are the following:
Venezuela
R.3 (Money laundering offence) rated as LC
R.6 (Targeted financial sanctions related to terrorism & terrorist financing) rated as NC
R.7 (Targeted financial sanctions related to proliferation) rated as NC
R.8 (Non-profit organisations) rated as NC
R.9 (Financial institution secrecy laws) rated as LC
R.11 (Record keeping) rated as LC
R.13 (Correspondent banking) rated as LC
R.21 (Tipping-off and confidentiality) rated as LC
R.24 (Transparency and beneficial ownership of legal persons) rated as NC
R.25 (Transparency and beneficial ownership of legal arrangements) rated as NC
R.30 (Responsibilities of law enforcement and investigative authorities) rated as LC
R.31 (Powers of law enforcement and investigative authorities) rated as LC
R.36 (International instruments) rated as LC
R.39 (Extradition) rated as LC
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MUTUAL EVALUATION REPORT OF THE BOLIVARIAN REPUBLIC OF VENEZUELA
This report provides a detailed assessment of the Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) measures in place in the Bolivarian Republic of Venezuela as of the on-site visit conducted from 17 to 28 January 2022. The report analyzes the country’s level of compliance with the FATF 40 Recommendations and the effectiveness of its AML/CFT system.
The report highlights several key findings, including the limited legislative and regulatory instruments and structures in place to combat money laundering (ML) and terrorist financing (TF), the lack of a comprehensive and systematic methodology for conducting risk assessments, and the insufficient regulation and supervision of designated non-financial businesses and professions (DNFBPs). The report also notes technical deficiencies that need to be addressed to ensure a robust AML/CFT/CFP system.
Furthermore, the report identifies weaknesses in the National Financial Intelligence Unit’s (UNIF) limited access to information beyond suspicious activity reports (SARs) submitted by reporting entities, the manual preparation of SARs by reporting entities that may affect their quality, and the lack of agility and efficiency in the current system for cooperation with investigative and law enforcement agencies (LEAs).
The report also notes that ML investigations are not a priority, and there is a lack of a specific national strategy or plan focused on confiscation and forfeiture of instrumentalities and proceeds of crime. The report highlights the absence of data on international cooperation regarding the repatriation and restitution of the proceeds of ML and predicate offenses committed abroad or sent to other countries.
Moreover, the report finds the TF risk analysis performed in the 2015-2020 National Risk Assessment (NRA) to be brief and lacking comprehensive or detailed analysis of risks related to the presence of terrorist groups, geographical location, and porous borders. The assessment team did not obtain information regarding inter-agency and international cooperation, the activity of specialized anti-terrorist units, and the education and training of officials of competent agencies and entities responsible for TF identification and investigation.
Finally, the report highlights the lack of a legal framework implementing Recommendation 7 and records of deficiencies identified by supervisory authorities, and the presence of unregulated financial institutions and DNFBPs, including savings banks and cooperatives, real estate agents, lawyers, accountants and other legal professionals, and trust and corporate service providers. The report therefore provides recommendations for strengthening the AML/CFT system to mitigate these identified risks and improve compliance with the FATF 40 Recommendations.