Money Laundering

Money laundering

During the last two decades, there has been an important growth of religious entities in our country, reaching more than 4 thousand registered institutions. In practice, its creation is simple and without much requirement. Once incorporated, they can receive donations and carry out commercial and non-commercial activities. They are exempt from income tax for the latter, even when they do not have obligations of accountability, transparency or internal and external controls. Thus – in fact – they enjoy broad “administrative freedom”, in addition to their freedom of worship. The sensible thing is that some of these entities handle large sums in cash. Taken together, all these characteristics carry a huge risk that these legal vehicles will be abused to launder money, illegally finance terrorism and politics, or to enrich yourself personally by misusing tax benefits. It has already been seen in the history of the Catholic Church. Even though it has continuously tightened its controls, the indications of corruption and money laundering – even with money from the mafia – still do not seem to end. At the end of 2020, after new scandals associated with real estate investments, the Vatican now underwent a new evaluation of Moneyval, the European body in charge of the fight against money laundering.

Also in Chile, the current lack of regulation of religious entities may facilitate that illegal activities remain as invisible as the faith that inspired the creation of these institutions. This is delicate, especially in current times, characterized by a greater risk of corruption, organized crime and drug trafficking, as the Observatory of the Public Ministry also showed. The positive: there are tools to deal with this situation. Given that an inseparable part of the drug world is money laundering, one of the most effective ways to combat crime is from your finances, through records of the natural persons who finally have power over the financial flows of legal entities,

It is important to establish a centralized registry of final beneficiaries of legal entities in Chile, and that it covers all legal vehicles in the country, with or without profit – be they companies, trusts, political parties, or foundations and religious entities from a certain size. Final beneficiary registries are a strategic tool to combat not only drug trafficking, but also tax evasion and corruption. It would allow detecting the real economic concentration in Chile, and in general terms it will make institutions such as the UAF, SII, CMF, CGR and FNE better able to fulfill their mandates. Even so, it was the government itself that postponed the launch of a registry of final beneficiaries in Chile. Between 2018 and 2020 the UAF, SII and Chile Compra had prepared a proposal together with civil society institutions. According to the open government commitment, the Executive was to later appoint a commission that would have prepared the proposal for legal changes to materialize the registry.

A few days ago, Canada was added to the list of countries that already have implemented or compromised registries. Via his budget law, he set funds to create a registry and make it public in 2025. In this way, he probably seeks to face the accusations of “snow washing” that had been raised after the revelation of the Panama Papers – alluding to the ease of launder money in Canada and make it as white as the snow of the arctic tundra. Once and for all, in Chile, it is also time to create this registry, and establish specialized audits and sanctions in case of not credible reporting – be it for companies, trusts, or religious organizations of a certain size. Laundering money with or without the holy spirit is still the same crime.


You May Also Like

About the Author: Forbes Times

Leave a Reply

Your email address will not be published.