Financial Crime World

Money Laundering Threats Soar in Peru: Understanding the Risks

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Peru, a country with a significant economy and a long history of corruption, has emerged as a hotspot for money laundering activities. According to estimates, between $3.2 billion and $7.9 billion is laundered every year in the country.

The Peruvian government has made efforts to combat money laundering through various laws and regulations, including the National Plan Against Money Laundering and Terrorist Financing. However, despite these measures, enforcement remains a significant challenge.

Key Risks and Channels

Several sectors and channels are particularly vulnerable to money laundering activities in Peru:

  • Cash traders and banks: These institutions are seen as key channels for financial crimes and cash laundering.
  • Real estate: The sector is also susceptible to money laundering due to its high value transactions.
  • Mining: Illegal mining operations, which contribute significantly to the Peruvian economy, often involve organized crime and money laundering.
  • Remittances from abroad: Remittances are a key risk factor for increasing opportunities for money laundering.
  • Cryptocurrency: Peru is one of the top three countries in Latin America for cryptocurrency use, posing significant money laundering challenges.

Lack of Knowledge and Resources

The lack of knowledge about financial crimes and resources for supervisory authorities and law enforcement to tackle them has hindered efforts to combat money laundering. This vulnerability is particularly evident in areas such as education, health, and law enforcement, which are at high risk for corruption due to low pay.

Peru has a comprehensive legal framework to combat money laundering, including:

  • Legislative Decree 1106: This sets out the legal framework for money laundering, illegal mining, and organized crime.
  • Law Decree 25475: This regulates terrorist financing prevention methods.
  • Law 30737: This requires reparations to the state in the case of corruption.
  • Legislative Decree 1327: This provides protection for corruption whistleblowers.
  • Legislative Decree 1372: This established beneficial ownership registers.

Conclusion

Peru’s struggle with money laundering is a complex issue that requires a multi-faceted approach. Strengthening transparency, information sharing, and citizen participation in the fight against corruption are essential steps towards combating this threat.