Money Laundering in Peru: A Growing Concern

The Hidden Reality of Money Laundering in Lima

Lima, the capital city of Peru, has seen a significant increase in money laundering activities in recent years. Authorities have sounded the alarm over this issue, citing budget hotels and small businesses as fronts for laundering revenues from drug trafficking and other illicit activities.

How Money is Being Laundered

Stores offering low prices and appearing to turn a high profit are being used to launder money.
Low-rent hotels with rooms priced between $10 and $30 often report they are fully booked on the registers given to authorities, when in fact many rooms are empty.

A Complex Problem Requiring Comprehensive Solutions

“The growth of the economy has created new opportunities for criminal groups to launder their money,” said Jorge Cotrina, anti-drug prosecutor. “It’s a complex problem that requires a comprehensive solution.”

The Scale of the Issue

Official data indicates that illicit funds may make up 3.5 percent of Peru’s Gross Domestic Product.
An intelligence report obtained by Reuters noted that the number of financial operations considered “suspicious” due to connections with illicit activities increased more than 80 percent in the past two years.
Of the operations, 71 percent had suspected ties to drug trafficking.

A Lack of Convictions and Continued Concerns

Peru’s struggle against money laundering has been ongoing for years, with the government passing financial reforms and increasing banking and gambling regulation in 2011. However, as of March 2013, no convictions had been achieved.

The issue has even reached the highest echelons of power, with two former presidents facing accusations of money laundering and illicit enrichment after their lavish real estate purchases raised eyebrows.

The Way Forward

As Peru’s economy continues to grow, concerns over money laundering and its impact on the country’s development remain a pressing issue. Authorities must take decisive action to address this problem and ensure that the benefits of growth are shared by all, not just a select few.