FROM THE OFFICE OF PUBLIC AFFAIRS

The Treasury Department today announced the signing of a Statement by the Senior Officials of the Black Market Peso Exchange (BMPE) System Multilateral Working Group that recommends short and long term actions to combat the biggest money laundering system in the Western Hemisphere. The officials convened at the Department of the Treasury to formally issue recommendations based on conclusions reached by the BMPE System Multilateral Experts Working Group, comprised of officials from Aruba, Colombia, Panama, Venezuela, and the United States. The Working Group, established in 2000, convened on four occasions to meet with subject matter experts from relevant agencies of their respective governments, as well as Free Trade Zone Administrators and merchants operating in Free Trade Zones.

The BMPE System is a trade-based money laundering system used by drug dealers to launder their illegal proceeds. Typically, peso exchange brokers in Colombia deposit pesos into the Colombian accounts of narcotics traffickers doing business in the United States. The pesos are profitably exchanged for the tainted U.S. dollars. The brokers have U.S. based operatives deposit the U.S. money into U.S. accounts that the brokers then use to purchase U.S. goods for Colombian importers in exchange for pesos. The products are then smuggled into Colombia, often through Panama, Aruba, and Venezuela, in avoidance of taxes.

The Black Market Peso Exchange System Multilateral Working Group was established to combat this black market peso exchange system which is believed by U.S. law enforcement to launder between $3 to $6 billion a year. According to Jimmy Gurulé, Under Secretary for Treasury Enforcement, "Money laundering takes place on a global scale and the Black Market Peso Exchange System, though based in the Western Hemisphere, affects business around the world. U.S. law enforcement have detected BMPE-related transactions occurring throughout the United States, Europe, and Asia."

The short-term recommendations for all countries affected by the BMPE exchange system include conducting public outreach programs for manufacturers, other persons engaged in international commerce, as well as Free Trade Zone Operators and Merchants; more adequate screening, registering, and regulating of merchants engaged in international trade; requiring money changers and exchange offices to report to their supervisory agencies information on suspicious or unusual transactions; and improving communication, coordination, and cooperation among law enforcement, regulatory, and supervisory agencies.

Long-term recommendations include improving the collection, quality, and international exchange of trade data for the purpose of developing a regional Numerically Integrated Profiling System (NIPS) to help promote legitimate trade by developing a more accurate picture of trade flows; conducting economic, social, political, and/or legal studies of the problem of trade-based money laundering; encouraging the development and implementation of an electronic customs filing and reporting system with universally compatible data fields that can be used to track the flow of goods being imported, exported, or transshipped from, to, or through each jurisdiction's customs territory and free trade zones; considering bilateral or multilateral agreements or arrangements to fill existing gaps with regard to the exchange of evidence and information; and having each jurisdiction evaluate its anti-money laundering legislative framework and effectiveness in combating trade-based money laundering.

Signers of the Statement were: Mr. Nilo J.J. Swaen, Minister of Finance, for the Ministry of Finance of Aruba; Mr. Santiago Rojas Arroyo, Director General, National Tax and Customs Directorate for the National Tax and Customs Directorate of the Republic of Colombia (by Mr. Luis Alberto Moreno, Ambassador of Colombia to the United States); Mr. José Miguel Alemán, Minister of Foreign Relations for the Ministry of Foreign Relations of the Republic of Panama (by Mr. Guillermo A. Ford, Ambassador of Panama to the United States); Dr. Mildred Camero, President, The National Commission Against the Illicit Use of Drugs for The National Commission Against the Illicit Use of Drugs of the Bolivarian Republic of Venezuela (by Dr. José Luis Perez Castillo, Director, Anti-Money Laundering Unit; and Mr. Jimmy Gurulé, Under Secretary of the Treasury (Enforcement) for the Department of the Treasury of the United States.