Bolivia’s Financial System Vulnerable to Fraudulent Activities, Report Says

October 3, 2003

Despite having a system in place to prevent and suppress money laundering, Bolivia’s financial sector remains vulnerable to fraudulent activities, according to a recent report. The country’s financial intelligence unit is responsible for combating money laundering, but the system lacks coverage of certain sectors that are susceptible to these crimes.

AML/CFT System Falls Short

The report found that Bolivia’s anti-money laundering and counter-terrorism financing (AML/CFT) system fulfills most of the recommendations made by the Financial Action Task Force (FATF), a global body that sets standards for combating money laundering and terrorist financing. However, the system does not include all activities that are susceptible to money laundering.

Vulnerable Sectors

The report noted that Bolivia’s financial sector, including:

• Insurance
• Stock market
• Banking industries

is subject to AML/CFT regulations. However, other sectors such as:

• Real estate
• Casinos
• Jewelry stores

are not covered by these regulations, leaving them vulnerable to fraudulent activities.

Recommendations for Improvement

The Bolivian government has been urged to improve its legislation aimed at combating money laundering and to strengthen the imposition and supervision of controls in all financial sectors. The report also recommended that Bolivia:

• Increase cooperation with international organizations
• Strengthen cooperation with other countries to combat money laundering and terrorist financing

Assessment Report

The report is the latest in a series of assessments conducted by the Bolivian government on its AML/CFT system. It is intended to provide recommendations for improving the country’s financial sector and preventing fraudulent activities.