Money Laundering

Costa Rica Poker Emigres May Face Increased Tax Scrutiny

American online poker players who relocated to Costa Rica to play on popular, non-United States-facing sites may face increased scrutiny due to new collaboration agreements between the US and Costa Rica regarding the tracking of financial transactions.

moneylaunderingThe new agreements between Costa Rica and many larger countries come as Costa Rica seeks to improve its relationships with important political powers.  As reported by last month, the deal with the US aims to eventually have Costa Rica removed from a list of “tax haven” countries that American government authorities maintain.

Records to be shared include those of both corporations and individuals, with the United States and other countries hoping to use the information to stem various forms of money laundering operating through Central America.

The new deal is based upon Costa Rica’s new “Law of Compliance of Standards of Fiscal Transparency,” under which banking institutions are commanded to provide information to the Costa Rica government as follows (note Subsection B specifically):

Article 106 bis. Information Located in Financial Institutions

The financial institutions must provide to the Tax Administration information about their clients and users of their services including information about banking operations and balances. The financial institutions must provide all information related to transactions of any checking or savings accounts, deposits, certificates of deposit, loans, trusts, individual investments, joint investment accounts, stock transactions and any other operation or transaction either active or passive which is pertinent to the Tax Administration to:

(a) Establish, collect or verify any tax imposition, exemption, remittance, levy or lien.

(b) To comply with any request for information pursuant to any international tax agreement to avoid double taxation or treaty for the exchange of tax information or any other international agreement that provides for the exchange of tax information.

In addition to Costa Rica’s new pact with the US, similar deals have also been reached with the United Kingdom, Germany, France and Spain, with the collective agreements titled “The Convention on Mutual Administrative Assistance in Tax Matters.”  Official notification was published last month, with reporting expected to begin in June.

Online gambling, along with drug-trafficking proceeds, is one of the areas of alleged money laundering that the United States and other countries hope to restrict with the new cooperation deal.  The 2012 Money Laundering and Financial Crimes Report, issued by the US State Department, had this to say about Costa Rica:

… Money laundering activities are primarily related to the foreign proceeds of international trafficking in cocaine. A sizeable internet gaming industry also launders millions of dollars in illicit proceeds through Costa Rica and offshore centers annually. To a lesser extent, proceeds are laundered in Costa Rica from domestic criminal activities, including trafficking narcotics, persons or arms; fraud; corruption; and contraband smuggling. A significant market exists in the smuggling of contraband liquors from bordering countries. The Government of Costa Rica (GOCR) reports that Costa Rica is primarily used as a bridge to send funds to and from other jurisdictions using, in many cases, companies or banks established in offshore financial centers.

Online poker remains secondary to US-facing sportsbetting sites within Costa Rica’s online gambling industry, with the Central American nation long a hub of the online industry.  Dozens of major online gambling sites have at various times had operations or customer-service centers located in the country taking advantage of the country’s low labor costs and bilingual workforce, plus the government’s previous permissive history regarding banking and internet-based matters.


Leave a Comment



filter by

Dan Katz

29th February 2020 // Uncategorised

Is the Coronavirus a Threat to the 2020 WSOP?

This has been one hell of a week. The coronavirus (COVID-19) is picking up steam globally. World financial markets have...

Dan Katz

26th February 2020 // Uncategorised

Side Bets Available at PokerStars Poker Tables

Poker is gambling. We like to say that it is a game of skill – and it is – but it is also gambling. And that’s...

Dan Katz

17th February 2020 // News, Online Poker Action, Poker Tournaments

World Series of Poker Expands Online Bracelet Schedule to 14 Events

On Thursday, the World Series of Poker released the schedule for this summer’s online bracelet events, to be hosted...

Dan Katz

8th February 2020 // Gossip, News, Online Poker Action

Phil Galfond Down €750,000 to VeniVidi1993 in Galfond Challenge

Look, I don’t typically make a habit of feeling bad when people of means lose money, but oh man, I am starting to get...

Dan Katz

2nd February 2020 // News, Online Poker Action

PokerStars, partypoker Launching Dueling Bounty Tourney Series on Super Bowl Sunday

The year 2020 is already one-twelfth gone. It seems like just yesterday that Larry David was arguing that it was too...

Haley Hintze

31st January 2020 // Misc, News, Poker Tournaments

Coronavirus Outbreak Forces Postponement of Triton Jeju Series

The Triton Super High Roller Series scheduled for mid-Februry in Jeju, South Korea has become the first poker event...