Bolivia Falls Short on Compliance with Financial Regulations Amid Concerns over Money Laundering and Terror Financing

La Paz, Bolivia - A Recent Report Highlights Shortcomings in Combating Financial Crimes

Despite making significant strides in combating money laundering and terrorist financing, Bolivia’s financial regulatory system still falls short in several key areas, according to a recent report by the Observance of Standards and Codes (ROSC) for the Financial Action Task Force (FATF).

Key Areas of Concern

• The report highlights that while Bolivia’s system to prevent and suppress money laundering meets most of the FATF 40 recommendations, it fails to cover other high-risk activities such as currency exchange houses and money transfer agencies.
• Authorities have pledged to address this shortcoming in the medium term.

Regulatory Gaps

• The Financial Intelligence Unit (FIU) bears the brunt of regulatory responsibilities for combating money laundering, but lacks the necessary resources to carry out on-site supervision of the financial system or push for legislative reforms.
• Sectoral superintendences also do not oversee compliance with anti-money laundering standards, leaving a gap in enforcement.

Efforts to Strengthen Anti-Money Laundering Regime

• The FIU is drafting legislation to expand criminal classifications and extend obligations to prevent money laundering to new sectors, including currency exchange houses.
• The Superintendence of Banks and financial institutions will issue regulations to heighten the duties of external auditors at financial institutions.

Interinstitutional Cooperation Convention

• The government has signed an interinstitutional cooperation convention aimed at boosting results in cases brought to trial, convictions, and goods confiscated.
• This move is seen as a crucial step forward in enhancing Bolivia’s ability to combat money laundering and terrorist financing.