VZCZCXYZ1118
RR RUEHWEB

DE RUEHMN #0734/01 3511657
ZNR UUUUU ZZH
R 171657Z DEC 09
FM AMEMBASSY MONTEVIDEO
TO RUEHC/SECSTATE WASHDC 0087
INFO RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHMN/AMEMBASSY MONTEVIDEO

UNCLAS MONTEVIDEO 000734 
 
SIPDIS 
STATE FOR INL, SCT AND EEB 
TREASURY FOR FINCEN 
JUSTICE FOR AFMLS, OIA AND OPDAT 
 
E.O. 12958: N/A 
TAGS: EFIN KCRM PTER SNAR UY
SUBJECT: INCSR II -- URUGUAY 
 
REF: STATE 14598 
 
¶1.  Post submits the 2009-2010 INCSR II report.  An e-mail copy 
with tracked changed was delivered by e-mail, per reftel 
instructions. 
 
 
 
¶2.  While the level of money laundering and related crimes is 
considered relatively low in Uruguay, the country's financial 
system remains vulnerable to this threat as well as terrorist 
financing risks associated with international sources that may be 
involved in Uruguay's cross-border financial operations. Officials 
from the Uruguayan police and judiciary assess that there is a 
growing presence of Mexican and Colombian cartels in the Southern 
Cone and fear they will begin operating in earnest in Uruguay. Drug 
dealers are slowly starting to participate in other illicit 
activities like car theft and trafficking in persons, according to 
the police. The Government of Uruguay (GOU) acknowledges that there 
is also a risk of money laundering in the real estate sector, in 
free zones and in bureaus that administer corporations and is 
working to develop new regulations soon to address these 
vulnerabilities. 
 
 
 
¶3.  In the past, Uruguay's strict bank secrecy laws, liberal 
currency exchange and capital mobility regulations, and overall 
economic stability made it a regional financial center (mainly for 
Argentine depositors) vulnerable to money laundering, though the 
extent and the nature of suspicious financial transactions have 
been unclear. In recent years, however, Uruguay has made 
significant efforts to expand the reach and strength of its 
anti-money laundering and counterterrorist financing (AML/CTF) 
regime, including by enacting several laws to criminalize money 
laundering and terrorist financing.  The most recent law (Law 
18.494, passed in June 2009) significantly upgrades Uruguay's 
anti-money laundering efforts by giving national authorities more 
flexibility to fight money laundering and terrorism financing. 
These recent developments have led to the investigation of 22 cases 
--10 of which started in 2009 at the influx of the new courts 
specialized on organized crime-- and the prosecution of 39 
individuals.  New legislation and enforcement efforts also resulted 
in the freezing of $20 million in assets, the detection of $2.5 
million in undeclared cross-border cash and other financial 
instrument movements, and increases in suspicious activities 
reports and information requests about international financial 
activities. 
 
 
 
¶4.  The 2009 GAFISUD mutual evaluation of Uruguay showed a strong 
improvement over the 2006 evaluation.  According to GAFISUD, 
Uruguay "fully complied" with 13 of FTAF's 40+9 recommendations, 
"mostly complied" with 23, "partially complied" with 11 and did 
"not comply" with only 2.  This is a strong improvement over 2006 
when it "fully complied" with only 5, "mostly complied" with 13, 
"partially complied" with 12 and did "not comply" with 19.  The 
evaluation did not take into account the developments of Law 18.494 
passed in mid-2009, which according to GOU officials, address 
several of GAFISUD's concerns. 
 
 
 
¶5.  Uruguay's financial sector consists of: one government owned 
commercial bank (which has roughly half of total deposits and 
credits), one government owned mortgage bank, 12 foreign-owned 
banks, 6 offshore banks, 11 cooperatives of financial 
intermediation, 6 financial houses, 5 administrators of previous 
savings, 12 credit administrators, 85 exchange houses and 21 
representative offices of foreign banks. The six offshore banks are 
subject to the same laws, regulations, and controls as local banks, 
with the GOU requiring them to be licensed through a formal process 
that includes a background investigation. Offshore trusts are not 
allowed. Bearer shares may not be used in banks and institutions 
under the authority of the Central Bank, and any share transactions 
must be authorized by the Central Bank. The financial private 
sector, most of which is foreign-owned, has developed 
self-regulatory measures against money laundering, such as the 
Codes of Conduct approved by the Association of Banks and the 
Chamber of Financial Entities (1997), the Association of Exchange 
Houses (2001), and the Securities Market (2002). 
 
 
¶6.  There are twelve free trade zones located throughout the 
country. While most are dedicated almost exclusively to 
warehousing, three host a wide variety of tenants performing a wide 
range of services, including financial services. Two free trade 
zones were created exclusively for the development of the paper and 
pulp industry. Some of the warehouse-style free trade zones have 
been used as transit points for containers of counterfeit goods 
bound for Brazil and Paraguay. There are nine casinos, eight of 
which are government owned, and 28 premises with slot machines 
(although media reports indicate a problem with businesses running 
unregistered slot machines). Four of the eight government-owned 
casinos are run by the state, and the other four by private sector 
concessions. Fiduciary companies called SAFIs (Anonymous Societies 
for Financial Investment) are also thought to be a convenient 
conduit for illegal money transactions. As of January 1, 2006, all 
SAFIs were required to provide the names of their directors to the 
Finance Ministry. In addition, the GOU implemented a comprehensive 
tax reform law in July 2007, which prohibited the establishment of 
new SAFIs as of that date. All existing SAFIs are to be eliminated 
by January 1, 2010. The tax reform law also implemented a personal 
income tax for the first time in Uruguay. 
 
 
 
¶7.  Uruguay achieved several notable actions against financial 
crime in 2008 and 2009. Parliament passed laws 18.362 and 18.390 in 
October 2008, which created two courts and two prosecutor's offices 
dedicated to prosecuting organized crime. These offices --which 
started working in January 1, 2009--, deal with money laundering, 
terrorism financing, banking fraud, tax fraud, counterfeiting, as 
well as drug trafficking, corruption, trafficking of weapons, child 
prostitution, among other crimes. Law 18.494, passed in June 2009, 
significantly upgraded Uruguay's anti-money laundering regime by 
incorporating new reporting agents and new preceding crimes, and 
including detailed provisions on the use of precautionary and 
seizure measures, as well as controlled delivery.  Law 18.494 also 
incorporates and regulates the use of new investigation techniques 
--such as electronic surveillance, use of collaborators and 
undercover agents--, and creates a protection system for victims, 
witnesses and collaborators.  Decrees 296/09 and 305/09 (from June 
22, 2009 and October 26, 2009 respectively) created the first 
"Comprehensive Permanent National Plan Against Drug Trafficking and 
Money Laundering" that was designed by the Coordination Commission 
for Anti-Money Laundering and Terrorism Financing (this commission 
was created in October 2008).  While not publicly available the 
Plan greatly focuses on improving the coordination among different 
institutions involved in anti-money laundering efforts. 
 
 
 
¶8.  Since 2005, 43 individuals have been prosecuted for money 
laundering; 40 were related to drugs and 3 to sexual exploitation. 
Uruguay's first arrest and prosecution for money laundering (under 
Law 17.835) occurred in October 2005 and resulted in the conviction 
of the offender. In another ongoing high-profile case, 14 people 
were indicted in September 2006 for a money laundering charge tied 
to the largest cocaine seizure in Uruguay at that time; in June 
2008 the kingpin was convicted and in November 2009 five 
individuals, including a well know attorney, were prosecuted. This 
case significantly invigorated the GOU's efforts to fight money 
laundering and to push for increased reporting of suspicious 
activities. In the November 2009 prosecutions, the GOU applied the 
set of new investigative techniques (the use of collaborators and 
the improved electronic surveillance) provided by Law 18.494 for 
the first time.  The use of new techniques has triggered a moderate 
public debate over the need to keep a balance between investigative 
requirements, respect for the privacy of individuals, and potential 
uncertainty in the practice of law.  Other cases involving another 
large cocaine seizure and proceeds from trafficking in 2007 are 
also under investigation. There have been no reported cases or 
investigations related to terrorist financing. 
 
 
 
¶9.  Unlike in neighboring Argentina and Brazil, tax evasion is not 
an offense in Uruguay, which in practice limits cooperation 
possibilities because the local Financial Intelligence Unit's 
Financial Information and Analysis Unit (UIAF) cannot share 
tax-related information with its counterparts. Nevertheless, the 
UIAF is becoming increasingly active in cooperation with 
counterpart financial units and judiciaries from other countries. 
In 2009, the UIAF received 54 information requests from the 
Judiciary and 48 requests from other financial units abroad. 
 
¶10.  In Uruguay, money laundering is treated as an autonomous 
criminal offense, separate from the underlying crimes, which 
extends, under certain circumstances, to offenses committed in 
other countries. Money laundering is criminalized under Law 17.343 
of 2001, Law 17.835 of 2004, and Law 18.494 of 2009. The courts 
have the power to seize and confiscate property, products or 
financial instruments linked to money laundering activities. Law 
17.343 identifies money laundering predicate offenses to include 
narcotics trafficking; corruption; terrorism; smuggling (of items 
valued more than $20,000); illegal trafficking in weapons, 
explosives and ammunition; trafficking in human organs, tissues, 
and medications; trafficking in human beings; extortion; 
kidnapping; bribery; trafficking in nuclear and toxic substances; 
and illegal trafficking in animals or antiques. Law 18.494 
incorporates seven new predicate offenses: i) fraud; ii) 
embezzlement; iii) fraudulent bankruptcy; iv) fraudulent 
insolvency; v) offenses against trademarks and intellectual 
property rights; vi) offenses related to trafficking in persons and 
sexual exploitation (involving child prostitution and pornography 
or related to trafficking or sexual exploitation); and vii) 
counterfeiting or alteration of currency. 
 
 
 
¶11.  Four government bodies are responsible for coordinating GOU 
efforts to combat money laundering: (1) the UIAF, (2) the National 
Anti-Drug Secretariat, (3) the Coordination Commission for 
Anti-Money Laundering and Terrorism Financing, and (4) the National 
Internal Audit. Decree 245/007 (passed July 2007), transformed the 
Center for Training on Money Laundering (CECPLA) into the 
Coordination Commission for Anti-Money Laundering and Terrorism 
Financing. The Commission works under the National Anti-Drug 
Secretariat, which is the senior authority for anti-money 
laundering policy and is headed by the President's Deputy Chief of 
Staff. The Commission's board is composed of government entities 
involved in anti-money laundering efforts: the head of the UIAF and 
the Ministries of Education (via prosecutors), of the Interior (via 
the police force), Defense (via the Naval Prefecture), and Economy 
and Finance. The Director of the Commission serves as coordinator 
for all government entities involved and sets general policy 
guidelines. The Director defines and implements GOU policies, in 
coordination with the Finance Ministry and the UIAF. Decree 239/09 
(passed May 2009) created the National AML Secretariat (National 
Secretariat Against Laundering of Assets, or Secretaria Nacional 
Antilavado by its Spanish acronym) and tasked it with: i) 
coordinating the execution of AML/TF polices with other 
institutions; and ii) coordinating and executing AML/TF training 
programs for banks' staff, agents involved in AML/TF prevention and 
repression (e.g. judges, prosecutors and police officials). The 
decree incorporates the Secretary General into the AML Secretariat 
and delineates his functions.  Among other duties, the Secretary 
General of the AML Secretariat is in charge of convoking the 
Coordination Commission for Anti-Money Laundering and Terrorism 
Financing, acting as National Coordinator before GAFISUD, and 
representing the GOU at OAS's CICAD. 
 
 
 
¶12.  The UIAF is responsible for supervising all financial 
institutions, and the National Internal Audit Office (AIN) is 
responsible for overseeing all nonfinancial institutions, such as 
casinos and real estate firms.  The recent Central Bank's charter 
(passed by Law 18.401 in October 2008) placed the UIAF under the 
Central Bank's Superintendent of Financial Services, and tasked it 
with several new activities that enhance its abilities as a 
mechanism to stop money laundering.  The UIAF is structured in 
three units: information and analysis, exchange houses, and money 
laundering control. GOU and private sector entities cannot refuse 
to provide information to the UIAF on the grounds of banking, 
professional or tax secrecies. Law 17.835 expands the realm of 
entities required to file Suspicious Activity Reports (SARs), 
making reporting of such suspicious financial activities a legal 
obligation, and conferring upon the UIAF the authority to request 
additional related information. Law 18.494 designates ten new types 
of individuals/enterprises required to report unusual or suspicious 
transactions and mandates SARs reporters to include information on 
suspicious intended transactions --even if they were not finally 
carried out-- and on those transactions that albeit licit are 
suspected of being related to individuals related to terrorism 
financing.  Reports to the UIAF are confidential and secrecy can 
only be lifted per a criminal court order.  Fines for failure to 
report range from 1,000 indexed units to 20,000,000 indexed units 
(equivalent to about $100 to $2,000,000 as of December 2009).  The 
2008 rendering of accounts (Law 18.362) granted the AIN additional 
 
funding of about $1 million for staffing needs, but the agency will 
need further funding to achieve its new  While severely 
understaffed in the past, the UIAF achieved its goal in 2008 of 
establishing a staff of 19 people. In 2009, the UIAF consolidated 
its work and increased the number of inspections. Through initial 
funding from the Organization of American States (OAS), the UIAF is 
updating its hardware and software systems in order to receive SARs 
electronically, develop electronic early-alarm systems for SARs, 
and improve control and analysis of its lists. 
 
 
 
¶13.  During 2009, Treasury's Office of Technical Assistance (OTA) 
provided technical assistance on financial enforcement to the 
Central Bank and the Anti-Money Laundering Secretariat.  An 
Information Technology Specialist visited the UIAF in October to 
assess its information systems with a view to enhancing the overall 
system by adding more robust analytical software and visualization 
tools.  In mid-November an expert from OTA's Financial Enforcement 
Unit delivered a three-day training course to Financial Analysts. 
Sixteen out of the eighteen UIAF analysts participated in the 
training.  In early November another team of instructors from OTA's 
Financial Enforcement Unit delivered Financial Investigative 
Techniques training to a select group of twenty-five professionals 
from diverse backgrounds.  The group included some of the country's 
highest profile judges and prosecutors, along with officials from 
Uruguay's intelligence, customs and anti-drug agencies.   The three 
programs were much appreciated and the heads of the UIAF and the 
Anti-Money Laundering Secretariat have requested OTA continued 
assistance with advanced editions of courses in 2010.  The head of 
OTA's Financial Investigative Techniques team singled out 
Uruguay????s 
recently upgraded anti-money laundering legislation for special 
praise.  In August 2009, the Embassy invited the Presidency's Chief 
of Staff and the heads of the Anti-Money Laundering and Anti-Drug 
Secretariats to a ten-day official trip to Washington and New York 
where they met numerous Anti-Money Laundering officials. Both 
countries expressed their willingness to sign an agreement to split 
the value of assets seized in joint operations, but no progress has 
been made as of December 2009. 
 
 
 
¶14.  The UIAF has circulated to financial institutions the list of 
individuals and entities included in UN 1267 Sanctions Committee 
and published it on its web page. It also works with lists from the 
Department of Treasury's Office of Foreign Assets Control (OFAC) 
and the European Union and is exploring options to purchase 
commercial databases with global blacklists. While the UIAF does 
not transmit OFAC's list directly to its supervised institutions, 
anti-money laundering officials told Post the vast majority of 
local financial institutions are acquainted with OFAC's lists and 
use them actively from a best practices standpoint.  The UIAF is 
also working on a Politically Exposed Persons (PEPs) list that will 
also be published on their website. 
 
 
 
¶15.  Law 17.835 from 2004 and Law 18.494 from 2009 significantly 
strengthened the GOU's anti-money laundering regime by including 
specific provisions related to the financing of terrorism and to 
the freezing of assets linked to terrorist organizations. Under Law 
17.835, terrorist financing was a separate, autonomous offense that 
can be prosecuted from other terrorism-related crimes. Laws 17.835 
and 18.494suffer,  however, from a narrow definition, which is 
limited to the financing of terrorists or terrorist organizations 
where specific terrorist acts have been committed or are being 
planned.  As a result, the laws do not specifically cover the 
provision or collection of funds by known terrorists or terrorist 
organizations for purposes other than terrorist acts 
 
 
 
¶16.  Beyond criminalizing terrorist financing, Law 17.835 provided 
the courts with the power to seize and confiscate property, 
products or financial instruments linked to money laundering 
activities. Law 18.494 improved the seizure regime by listing the 
kind of property that can be seized while establishing the 
possibility of seizing assets of similar worth or imposing a fine 
when listed property cannot be seized.  Under the new legislation, 
based on a prosecutor's request, courts can seize: prohibited 
narcotics and psychotropic substances confiscated in the process; 
property or instruments used in committing the criminal offense or 
the punishable preparatory activity; property and products 
considered proceeds of the criminal offense.  Courts can also seize 
 
property and products coming from the use of the proceeds of the 
criminal offense, including: property and products into which 
proceeds of the criminal offense have been converted or mixed and; 
income or other benefits derived from the property and products 
that are proceeds of the criminal offense.  If such property cannot 
be seized the court can seize any other property of the convicted 
offender of an equivalent value.  Seizure by "operation of the law" 
allows courts to seize assets in four cases: i) those assets 
belonging to fugitives against whom a warrant of arrest has been 
issued and have not appeared or been arrested in over six months; 
ii) assets that have been frozen and whose holders failed to prove 
their legal origin within a six months period; iii) undeclared 
assets in transit whose holders also failed to prove their legal 
origin within a six months period; and iv) proceeds of criminal 
offenses or connected criminal offenses that are discovered and not 
claimed within a period of six months. 
 
 
 
¶17.  Despite these powers, the way real estate is registered 
complicates efforts to track money laundering in this sector, 
especially in the partially foreign-owned tourist sector. The UIAF 
and other government agencies must obtain a judicial order to have 
access to the name of titleholders. The GOU is in the process of 
implementing a national computerized registry that will facilitate 
the UIAF's access to titleholders' names,  is at an advanced stage 
of implementation. The UIAF is already using the loaded data for 
investigation purposes.  In December 2009, the Ministry of 
Agriculture signed an agreement with settlers to establish a joint 
production entity in a 6,000 acre farm that had been seized in 
¶2007. In May 2008, the GOU signed a cooperation memorandum with the 
OAS to get assistance in developing a fund to administer seized 
assets for Uruguay, Argentina, and Chile. The GOU expects to launch 
the fund in the first half of 2009.  A by-product of the program 
was a best practices document that was approved by CICAD in 
November 2009. 
 
 
 
¶18.  Law 18.494 enables criminal courts to adopt precautionary 
measures (under their own initiative or at the request of an 
interested party) at any stage of proceedings, including the 
preliminary hearing.  Measures adopted during the preliminary 
hearing stage shall become void if GOU prosecutors do not request a 
trial within a two years term.  Precautionary measures shall be 
adopted when considered indispensable to protect the State's right 
to have assets at its disposal once seized and provided that there 
is a danger of impairment or frustration of this right due to the 
delay of the proceedings. Law 18.494 improved the precautionary 
measures regime by exempting the GOU from depositing a bond to 
cover potential losses or damages (it would be however liable for 
damages if assets are not finally seized), and allowing courts to 
swiftly auction certain assets.  The law provides that assets 
subject to precautionary measures that run the risk of perishing, 
deteriorating or depreciating, or whose adequate preservation would 
be overly costly, can be auctioned swiftly, and mandates the GOU to 
deposit the proceeds of the auction in indexed units (an unit 
designed to avoid deterioration of purchasing power caused by 
inflation) or other units that ensure the preservation of value. 
 
 
 
¶19.  The UIAF can instruct those institutions subject to the 
Central Bank's control to stop, for up to seventy-two hours, the 
execution of operations suspected of involving funds proceeding 
from criminal offenses. The decision must be communicated 
immediately to the competent criminal court that can determine to 
freeze the assets with no prior notification.  Up to 2008 the GOU 
had frozen assets  for $20 million.  Seventeen of the $20 million 
dollars were frozen just in 2009.  Some major cases, involving a 
Russian church and Brazilian and Greek citizens, are related to 
requests from abroad. 
 
 
 
¶20.  Under Law 17.835, all obligated entities must implement 
anti-money laundering policies, such as thoroughly identifying 
customers, recording transactions more than $10,000 in internal 
databases, and reporting suspicious transactions to the UIAF. This 
obligation extends to all financial intermediaries, including 
banks, currency exchange houses, stockbrokers, insurance companies, 
casinos, art dealers, and real estate and fiduciary companies. Law 
18.494 obliges ten new types of individuals or enterprises to 
report unusual or suspicious transactions.  New obligated subjects 
include: i) businesses that render services of lease and 
 
safekeeping of safe deposit boxes, transportation of assets and 
transfer or sending of funds; ii) professional trust managers, iii) 
persons natural or judicial who, from Uruguay, professionally 
provide advisory services in the areas of investment, placement and 
other financial transactions to clients; iv) casinos; v) real 
estate brokers other intermediaries in transactions involving real 
estate; vi) notaries, when carrying out certain operations for 
their clients; vii) auctioneers; viii) natural or juridical persons 
dedicated to the purchase and sale of antiques, works of art and 
precious metals or stones; ix) free trade zones operators; x) and 
natural or judicial persons who carry out transactions or 
administer corporations on behalf of third parties. 
 
 
 
¶21.  Law 17.835 and Law 18.494 extended reporting requirements to 
all persons entering or exiting Uruguay with more than $10,000 in 
cash or in monetary instruments. This measure has resulted in the 
detection of over $ 2.0 million in about 25 undeclared cross-border 
movements since the declaration requirement entered into force in 
December 2006. In 2009, the GOU detected three undeclared 
operations for over $300,000.  Since all movements were detected at 
one single customs office, and given Uruguay's porous borders, the 
GOU suspects that many more movements are passing undetected.  Law 
18.494 raised the maximum fine on undeclared funds from 30 percent 
to 100 percent of undeclared funds.  Under the new law competent 
authorities can determine precautionary measures to ensure that the 
State collects the fine, as well as seize the undeclared assets 
when there is a well founded suspicion that they derive from a 
preceding crime (even if such crime was committed abroad).  To get 
them back, the asset holder has to prove the legal origin of his 
assets. 
 
 
 
¶22.  Lawyers, accountants, and other nonbanking professionals that 
habitually carry out financial transactions or manage commercial 
companies on behalf of third parties are also required to identify 
customers whose transactions exceed $15,000 and report suspicious 
activities of any amount. 
 
 
 
¶23.  Implementing regulations have been issued by the Central Bank 
for all entities it supervises (banks, currency exchange houses, 
stockbrokers, and insurance companies), and are being issued by the 
Ministry of Economy and Finance for all other reporting entities. 
On November 26, 2007, the Central Bank issued Circular 1.978, which 
requires financial intermediary institutions, exchange houses, 
credit administration companies and correspondent financial 
institutions to implement detailed anti-money laundering and 
counterterrorist financing policies. This circular mandates 
financial intermediaries to report conversion of foreign exchange 
or precious metals over $10,000 into bank checks, deposits or other 
liquid instruments; conversion of foreign exchange or precious 
metals over $10,000 into cash; cash withdrawals over $10,000; and 
wire transfers over $ 1,000. As of November 2008, the Central 
Bank's Capital Market Division is considering requesting reports of 
transactions with securities over $10,000. Circular 1.978 requires 
these institutions to pay special attention to business with PEPs; 
persons, companies, and financial institutions from countries that 
are not members of the Financial Action Task Force (FATF) or a 
FATF-style regional body; and persons, companies, and financial 
institutions from countries that are subject to FATF special 
measures for failure to comply with the FATF Recommendations. 
 
 
 
¶24.  Obligated entities are mandated to know their customers on a 
permanent basis, keep adequate records and report suspicious 
activities to the UIAF. Compliance by reporting entities increased 
from 94 SARs in all of 2006 to 174 SARs in 2009. SARs are largely 
concentrated within the financial system.  While in 2009 banks and 
exchange houses accounted for 60 percent and 19 percent of total 
reports, there has been a gradual increase in SARs from other 
institutions, including capital market agents and firms that wire 
funds.  Other obligated entities, like off shore banks casinos or 
real estate agents, have issued few SARs. Eight cases stemming from 
SARs were sent to the Judiciary in 2009.  Four cases stemming from 
SARs have ended in prosecutions in recent years.  The recent high 
profile money laundering cases have provided a boost to the money 
laundering issue and the Central Bank's efforts. 
 
¶25.  As stated above, Law 18.494 from 2009 incorporates or provides 
for more detailed regulation of new investigative techniques 
--controlled delivery, electronic surveillance, the collaborator 
and the undercover agent-- and a witness protection program. 
 
 
 
¶26.  On controlled delivery, the 2009 law provides that during the 
investigation of an offense and at the request of the prosecutor a 
criminal judge can authorize: i) the circulation of prohibited 
substances or any other goods that may be the object of a crime, 
ii) the use of all available technological means to facilitate the 
elucidation of the case. 
 
 
 
¶27.  The law also provides that at any stage of the criminal 
proceedings, the prosecutor may come to an agreement with a person 
that has committed organized crime offenses to cut his sentence in 
half or even not press charges in case the offender: i) reveals the 
identity of "other perpetrators, co-perpetrators, accomplices or 
aiders and abettors to the acts under investigation or other 
connected acts"; ii) "provides sufficient information that would 
allow for the prosecution of crime syndicates or the definitive 
resolution of the case or significant progress in the 
investigation; or iii) provides information that would allow for 
the seizure of elements that could serve for the commission of 
crimes, their planning and even recuperation of proceedings of 
crimes. 
 
 
 
¶28.  At the request of the prosecutor, courts may authorize public 
officials to act under an assumed identity and to acquire and 
transport objects, effects and instruments linked with criminal 
activity and to defer seizure of the same. The information gathered 
by the undercover agent must be submitted to those who authorized 
the investigation at the earliest convenience. 
 
 
 
¶29.  Witnesses, victims when acting as such, experts and 
collaborators, may be subject to protective measures when there is 
a well-founded suspicion that their lives or physical integrity as 
well as that of their families are at great risk.  Protective 
measures include: i) physical protection of these individuals by 
the police; ii) mechanisms to impede their visual identification by 
third parties unconnected to the process when they have to appear 
at any proceeding for gathering of evidence; iii) being summoned in 
a confidential manner; iv) possibility to take depositions by 
audiovisual means or other technologies; v) prohibition of 
registration and disclosure of their images by private parties and 
the media; vi) relocation under a new identity; vii) total or 
partial prohibition against revealing information concerning their 
identity or whereabouts; viii) and economic assistance in cases of 
relocation. Decree 499/09 (passed July 1, 2009) incorporates GOU 
officials fighting Money Laundering and Drug Trafficking into the 
witness protection program. 
 
 
 
¶30.  The GOU states that safeguarding the financial sector from 
money laundering is a priority, and Uruguay remains active in 
international anti-money laundering efforts. Uruguay is a party to 
the 1988 UN Drug Convention, the UN Convention for the Suppression 
of the Financing of Terrorism, the UN Convention against 
Transnational Organized Crime, and the UN Convention against 
Corruption. The GOU is also a member of the OAS Inter-American Drug 
Abuse Control Commission (CICAD) Experts Group to Control Money 
Laundering. Uruguay and the United States are parties to a mutual 
legal assistance treaty that entered into force in 1994. Uruguay is 
also a founding member of the Financial Action Task Force for South 
America (GAFISUD). Since early 2005, the former director of the 
GOU's Center for Training on Money Laundering Issues (CECPLA) has 
served as GAFISUD Executive Secretary, and has offered the services 
of Uruguay's anti-money laundering training center to GAFISUD. 
 
 
 
¶31.  The GOU has taken significant steps over the past few years to 
strengthen its anti-money laundering and counterterrorist financing 
regime. Law 18.494 significantly improved the regime by 
incorporating new money laundering predicate offenses, requiring 
new types of financial and non-financial entities supervised by the 
UIAF and the AIN to report suspicious transactions, and providing 
 
for new investigation techniques (such as undercover and 
collaborator agents), a new witness protection program, and new 
measures to facilitate and speed up the seizure of assets. 
 
 
 
¶32.  Also in 2009, the UIAF submitted its application for Egmont 
Group membership sponsored by Brazil. The GOU is confident that 
Egmont will approve its membership in its 2010 plenary. Gaining 
membership in the Egmont Group would enable the UIAF to share 
financial information with other FIUs globally.  In fact, the GOU 
waited for the passage of Law 18.494 before submitting its 
application to Egmont since it enables de UIAF to exchange 
information to fight terrorism financing, which had been 
involuntarily left out of previous provisions.  Under the new law, 
the UIAF may exchange information relevant to the investigation of 
the criminal offenses of money laundering and financing of 
terrorism with its counterparts of other States. 
 
 
 
¶33.  The Government of Uruguay (GOU) acknowledges that there is 
also a risk of money laundering in the real estate sector, in free 
zones, and in bureaus that create or administer corporations. To 
this extent it is working to address these vulnerabilities by 
developing new regulations on these sectors, which is expected to 
be in place in the first half of 2010. The GOU also acknowledges 
there is a risk of money laundering in the sports sector but is 
addressing the risk mainly through its participation in the FTAF, 
which started working on the issue in mid-2009. To continue its 
recent progress, Uruguay should continue the implementation and 
enforcement of recently enacted legislation. Gaining membership in 
the Egmont Group would enable the UIAF to share financial 
information with other FIUs globally. 
MATTHEWMAN