Bolivia’s Financial Institutions Face Scrutiny Over Anti-Money Laundering Efforts

Bolivian financial institutions have come under increased scrutiny for their ability to prevent money laundering and combat the financing of terrorism. A recent report highlights that while Bolivia’s system to prevent and suppress money laundering fulfills most of the Financial Action Task Force (FATF) 40 recommendations, there are still several areas that need improvement.

Concerns Over Supervision

One of the main concerns is the lack of supervision over certain sectors that are susceptible to money laundering, such as:

• Currency exchange houses
• Money transfer agencies

Authorities hope to rectify this issue in the medium term by expanding the criminal classification and extending the obligation to prevent money laundering to these new sectors.

Concentration of Regulatory Responsibilities

Another area of concern is the concentration of institutional regulatory, supervisory, and financial intelligence responsibilities for combating money laundering in the Financial Intelligence Unit (FIU). While the FIU plays a crucial role in combating money laundering, it lacks the means to push for legislative reforms on its own or to strengthen the efficacy of the system.

Initiatives to Address Concerns

To address these concerns, the FIU has initiated several initiatives:

• Drafting a law that would expand the criminal classification and extend the obligation to prevent money laundering to new sectors
• The Superintendence of Banks and financial institutions will issue a regulation making the duties of financial institutions’ external auditors more exacting

Interinstitutional Cooperation

Furthermore, Bolivia has signed an interinstitutional cooperation convention with various public entities involved in anti-money laundering efforts. The aim of this convention is to achieve better results in terms of:

• Cases brought to trial
• Convictions
• Goods confiscated

Conclusion

Overall, while Bolivia’s financial institutions have made progress in combating money laundering, there are still several areas that need improvement. By addressing these concerns, the country can strengthen its efforts to prevent money laundering and combat the financing of terrorism.