Uruguay

Uruguay, with its official name of the Oriental Republic of Uruguay, is an established and very developed state in the southeastern part of South America. With its 3.5 million citizens mostly living in the capital city of Montevideo, the country can serve as a model state for its region. In its economic sphere, Uruguay greatly depends on agribusiness, which constitutes around 70% of its export products, and functions within a favorable and open economic environment for foreign direct investments in specialized free trade zones. After the national elections, the government under the leadership of President Yamandú Orsi works in the context of a very developed and established democracy.

From the viewpoint of governance, Uruguay is known to be one of the most transparent and stable democracies in the Americas region. This country has the best record of the observance of the rule of law and the least corruption in Latin America, due to its competent and independent judiciary. Nevertheless, the present political environment necessitates the need for consensus-oriented decision-making because of the absence of a majority in parliament. Thus, while classical issues of governance are handled excellently, new ones involve the handling of child poverty in certain regions, regional integration with the Mercosur organization, and social security.

Concerning risk compliance, Uruguay’s strong institutions provide a safe setting for conducting business, with low chances of corporate insolvencies and defaults. Despite its solid foundations, the nation suffers from several weaknesses that may become crucial in operations and finance. First of all, more than 70% of the national deposits in the banking system are dollarized, which leaves Uruguay vulnerable to economic and monetary changes in the region. More importantly, Uruguay has been experiencing problems in terms of public security. The nation’s vulnerable borders, along with Montevideo – an important port – have increasingly been used as a transit point for smuggling narcotics to Europe by transnational criminal organizations.

In order to combat the emerging difficulties, the government takes action to implement its revised AML/CFT national strategy. Risk-based compliance programs are to be adopted by financial institutions and reporting entities, extensive Customer Due Diligence is to be practiced, and suspicious activity should be reported. The regulatory landscape remains open for more predicate offenses such as cybercrimes, environmental crimes, and cross-border frauds. Moreover, the country is not placed on the FATF List of countries with strategic weaknesses in AML measures. In the sphere of international sanctions, Uruguay is unsanctioned. At present, there are no multilateral or unilateral international sanctions imposed against the country, its core sectors, and sovereign bodies.