Proceeds from extortion in Guatemala, Honduras and El Salvador amount to more than US$1.1 billion annually according to a new study by Global Financial Integrity (GFI). The report, which examined data for individuals and businesses, also reveals that an estimated 330,000 people in the Northern Triangle region of Central America fall victim to extortion each year. Extortion against individuals is estimated at US$40 million – $57 million a year in Guatemala, US$190 million – $245 million a year in El Salvador, and $30 million – $50 million a year in Honduras. Data on extortion paid by businesses is not comparable across countries due to significant gaps in data availability.
The report, titled Extortion in the Northern Triangle of Central America: Following the Money, assesses the value of this activity and seeks to better understand how the proceeds of extortion are used and laundered. It also considers whether anti-money laundering and counter-terrorism financing (AML/CFT) strategies are being effectively utilized to combat extortion.
“The human and societal costs of extortion far exceed the financial cost of these crimes,” according to Tom Cardamone, President & CEO of GFI. “Extortion causes significant harm to individuals, communities and businesses by damaging social networks, limiting economic growth, undermining faith in institutions, and causing displacement.”
For this report, GFI conducted in-depth interviews with subject matter experts from the private sector, including financial institutions, as well as from governments, international organizations and civil society groups. GFI also reviewed publicly-available information on law enforcement operations and legal cases to identify trends and typologies. Finally, it analyzed a variety of data sources, including victimization surveys, to understand current trends in extortion and to estimate the financial value of this illicit activity.
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This report is part of a larger project by GFI that analyzes financial crimes in Latin America and the Caribbean. The project’s first report, Financial Crime in Latin America and the Caribbean: Understanding Country Challenges and Designing Effective Technical Solutions covered financial crime trends throughout the hemisphere. It looked at illicit proceeds from corruption, drug trafficking, mineral trafficking, trafficking in persons, and smuggling of migrants. Continuing with this effort, this report is part of a four-section initiative to understand financial crime threats in the hemisphere. The other reports are:
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