Financial Crime World

Bolivia Struggles to Strengthen Anti-Money Laundering Laws Amid FATF Concerns

Despite significant progress in adhering to international standards for combating money laundering, Bolivia’s anti-money laundering system has been criticized for several shortcomings.

Insufficient Authority for On-Site Supervision

The country’s Financial Intelligence Unit (FIU) is responsible for overseeing the sector and implementing measures to prevent and suppress money laundering. However, it lacks the authority to conduct on-site supervision of financial institutions, which is a crucial aspect of effective anti-money laundering efforts.

Omissions in High-Risk Sectors

A recent report by the Financial Action Task Force (FATF) highlighted Bolivia’s failure to include certain high-risk sectors in its anti-money laundering regime. The country’s system currently only applies to the insurance, stock market, and financial sectors, leaving currency exchange houses and money transfer agencies vulnerable to money laundering.

Efforts to Rectify Shortcomings

In an effort to rectify this oversight, Bolivian authorities have pledged to:

  • Expand the criminal classification of money laundering offenses
  • Extend the obligation to prevent money laundering to new sectors
  • Issue a regulation making the duties of financial institutions’ external auditors more stringent

Interinstitutional Cooperation Convention

Bolivia has also signed an interinstitutional cooperation convention with various public entities involved in anti-money laundering efforts. The agreement aims to enhance coordination and information sharing between agencies, ultimately leading to better outcomes in terms of cases brought to trial, convictions, and assets confiscated.

Experts Warn of Ongoing Challenges

While progress is being made, experts warn that more needs to be done to strengthen Bolivia’s anti-money laundering laws and regulations. Until the country addresses these shortcomings, it risks falling short of international standards and failing to effectively combat money laundering and terrorist financing.

Note: FATF is an intergovernmental organization that sets standards for combating money laundering and terrorist financing.