Financial Crime World

Regulatory Focus Shifts to Combatting Financial Crimes in Paraguay

Paraguay’s financial sector is set to face increased scrutiny from regulators as the country works to combat financial crimes and mitigate risks. According to a recent report by KPMG, regulatory bodies will focus on several key areas, including anti-money laundering (AML) and counter-terrorist financing (CFT), fraud models, and insider corruption.

Regulatory Efforts to Combat Financial Crimes

The Paraguayan government has implemented various regulations to prevent illicit activities, such as the creation of shell companies and all-cash real estate purchases. However, regulators are concerned that these measures may not be sufficient to address the evolving nature of financial crimes.

  • Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT): Regulators will focus on ensuring effective implementation of AML/CFT regulations, including customer due diligence and transaction monitoring.
  • Fraud Models: Companies are expected to enhance their risk and compliance frameworks for effective oversight and governance.
  • Insider Corruption: Regulators will examine measures to prevent insider corruption and ensure that companies have robust internal controls in place.

Digital Assets and Cybersecurity

KPMG’s report highlights the importance of robust cybersecurity risk management and the need for companies to enhance their risk and compliance frameworks. Regulators will also focus on combating threats and vulnerabilities posed by digital assets, including cryptocurrencies and non-fungible tokens (NFTs).

  • Cybersecurity Risk Management: Companies are expected to implement robust cybersecurity measures to protect against cyber threats.
  • Digital Assets: Regulators will examine the risks associated with digital assets, including cryptocurrencies and NFTs.

Consumer Protection

In addition, regulators in Paraguay will continue to assess companies’ use of account holds and freezes in connection with consumer complaints and claims. They will also examine model development and validation, payment sender/receiver authentication procedures, and oversight and monitoring of synthetic identity fraud.

  • Account Holds and Freezes: Regulators will examine the use of account holds and freezes in connection with consumer complaints and claims.
  • Model Development and Validation: Companies are expected to enhance their risk and compliance frameworks for effective oversight and governance.
  • Synthetic Identity Fraud: Regulators will examine measures to prevent synthetic identity fraud.

Vulnerable Populations

To better protect vulnerable populations, such as the elderly and servicemembers, regulators expect companies to implement risk programs that identify and mitigate scams directed at these groups.

  • Risk Programs for Vulnerable Groups: Companies are expected to implement risk programs that identify and mitigate scams directed at vulnerable groups.
  • Scam Prevention: Regulators will examine measures to prevent scams directed at vulnerable populations.