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Money laundering is the second-most prevalent criminal economy in Ecuador, according to a new study. Money laundering is heavily concentrated around industries that have historically facilitated the appearance of legality, such as real estate and secondhand car sales, according to the study, which was based on fieldwork and interviews with state security officials. Certain economic activities — including construction, real estate, and online gambling — are frequently used by money launderers. As heightened drug trafficking activity pushes levels of violence in Ecuador upwards and illicit revenues increase, InSight Crime outlines the three obstacles the country faces in tackling money laundering. This dynamic led to Ecuador seizing the second-highest volume of drugs in Latin America in It has also increased the need for local criminal groups to launder their illicit proceeds, with many turning to foreign criminal organizations. This allows them to launder drug money, and also to control the transit of drugs to Europe. Ecuador adopted the US dollar in , and the Central Bank of Ecuador Banco Central del Ecuador reports that the measure has been successful in combating fiscal indiscipline and reducing levels of poverty. But dollarization has also permitted the laundering of assets from illicit economies. The global dominance of the dollar facilitates the movement of dirty money. In this context, drug trafficking profits in the United States can flow directly into Ecuador without the need for conversion, making money laundering easier than in neighboring Colombia, for example, where strict exchange controls are a major barrier to illicit financial flows. In addition, Of these, This suggests that criminal groups have identified loopholes in the banking system and have taken advantage of them to launder their proceeds. Subscribe to our newsletter to receive a weekly digest of the latest organized crime news and stay up-to-date on major events, trends, and criminal dynamics from across the region. Donate today to empower research and analysis about organized crime in Latin America and the Caribbean, from the ground up. Skip to content. Stay Informed With InSight Crime Subscribe to our newsletter to receive a weekly digest of the latest organized crime news and stay up-to-date on major events, trends, and criminal dynamics from across the region.
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Workers haul the bunches to an assembly line, where the bananas are washed, weighed and plastered with stickers for European buyers. Owner Franklin Torres is monitoring all activity on a recent morning to make sure the fruit meets international beauty standards — and ever more important, is packed for shipment free of cocaine. Torres is hypervigilant because Ecuador is increasingly at the confluence of two global trades: bananas and cocaine. Shootings, homicides, kidnappings and extortions have become part of daily life , particularly in the Pacific port city and banana-shipping hub of Guayaquil. They have ruined our country. The country, which is not a major cocaine producer, was especially rattled when a presidential candidate known for his tough stance on organized crime and corruption — Fernado Villavicencio — was fatally shot at the end of an Aug. In addition to its proximity to cocaine production, cartels from Mexico, Colombia and the Balkans have settled in Ecuador because it uses the U. Authorities say Ecuador also gained prominence in the global cocaine trade after political changes in Colombia last decade. Coca bush fields in Colombia have been moving closer to the border with Ecuador due to the breakup of criminal groups after the demobilization of the rebel group Revolutionary Armed Forces of Colombia, better-known by their Spanish acronym FARC. A record 2, metric tons of cocaine was manufactured in around the world, mostly in Colombia, Peru and Bolivia. That year, nearly a third of the cocaine seized by customs authorities in Western and Central Europe came from Ecuador, double the amount reported in , according to a United Nations report citing data from the World Customs Organization. Large drug busts have become more frequent and within the past month, European authorities have made record-setting busts after inspecting containers carrying bananas from Ecuador. Authorities on Aug. Authorities in Greece and Italy also announced seizures of cocaine hidden in Ecuadorian bananas this year. Bananas headed to Europe are boxed at plantations, loaded into trucks that take them to massive warehouses in and around Guayaquil and transferred to maritime containers driven to an area port. Then the ships head northeast to the Panama Canal, cross to the Caribbean Sea, and go east across the Atlantic. Knowingly or not, banana growers, exporters, shipping corporations, port operators, private security companies, customs agents, agriculture officials, police, and buyers offer opportunities that drug traffickers have exploited. Some traffickers have created front companies to mimic legitimate banana exporters, while others have acquired legitimate businesses, including plantations. They have found companies willing to be complicit in trafficking. They also have paid off, threatened or kidnapped truck drivers and other workers to help get cocaine into shipments. Other traffickers have corrupted or intimidated police, customs agents, security guards and port workers to assist with — or ignore — tampering with containers at the ports. Drug trafficking has contributed to the number of violent deaths in Ecuador, which doubled from to , when 4, died, the most ever recorded in a year. The country is on track to break the annual record again, with 3, violent deaths tallied in the first half of In Guayaquil, where maritime shipping containers are part of the landscape, people live in fear these days. Convenience stores have floor-to-ceiling metal bars that prevent customers from entering from the sidewalk. Restaurants that survived the pandemic close early. That is more than three times the amount seized in National Police Gen. He said two ports have tested the scanners to smooth out internal procedures and train the people who will be working with the machines. The operator of the largest port in Guayaquil, Contecon Guayaquil S. Jose Hidalgo, executive director of the Association of Banana Exporters of Ecuador, said the industry faces greater exposure to trafficking than other commodity exports because of the volume of containers that it uses. Nonetheless, some exporters have been accused of being complicit or directly involved in trafficking cocaine. Hours after this story was published Monday, agriculture and customs officials in Ecuador announced in a statement that the administration had purged a government-run banana-export database. It annulled the profiles of export companies deemed to be fake or incomplete and revoked permits of plantations covering 16, hectares 39, acres determined to be nonexistent. Torres, the plantation owner, would like to see that type of troubled exporters kicked out of the industry. By Regina Garcia Cano. Originally Published: September 4, at a. Share this: Click to share on Twitter Opens in new window Click to share on Facebook Opens in new window Click to print Opens in new window Click to email a link to a friend Opens in new window Click to share on Reddit Opens in new window. More in Business.
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