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PEPs and Enhanced Due Diligence in Peru: What Financial Institutions Need to Know

Lima, Peru - In an effort to combat money laundering and terrorist financing, Peru’s Superintendencia de Banos y Seguros (SBS) has implemented enhanced due diligence requirements for financial institutions dealing with Politically Exposed Persons (PEPs).

What are PEPs?

According to SBS Resolution 838-2008, article 9.2., PEPs are subject to an enhanced regime procedure, which includes:

Identification and registration of transactions that do not conform to their profile
Registration of PEPs who own more than 5% of the capital stock of a legal entity

This means that partners, shareholders or associates of such entities must also be subject to the enhanced due diligence procedure.

Correspondent Banking Relationships

Financial institutions are required to carry out policies and procedures related to prevention and detection of unusual and suspicious operations carried out between national or foreign legal entities, particularly in correspondent banking relationships.

Shell Banks

The SBS has implemented regulations requiring local legal entities to obtain a certificate from their foreign correspondent bank stating that it does not allow shell banks to use its accounts. In cases where financial institutions have correspondent banking relationships with shell banks, they must obtain a certificate from the foreign correspondent bank confirming that it does not allow shell banks to use its accounts.

Reporting Requirements

The UIF-Peru is responsible for receiving suspicious activity reports (SARs) from financial institutions. Failure to comply with reporting requirements can result in penalties. Financial institutions are also required to use automated suspicious transaction monitoring technology, known as ROSEL, to report suspicious transactions.

Recent Developments

In a recent development, the SBS has issued Resolution 9810-2011, which requires regulated entities to use ROSEL technology to monitor and report suspicious transactions.

Peruvian AML Regime

The Peruvian AML regime is risk-based, with the SBS issuing additional regulations to control AML/ CFT practices. For example, SBS Resolution 5709-2012 requires Notary Publics to report any suspicious or unusual operations to the UIF-Peru.

Conclusion

Financial institutions operating in Peru must be aware of the enhanced due diligence requirements for PEPs and correspondent banking relationships, as well as the regulations surrounding shell banks and automated suspicious transaction monitoring technology. Failure to comply with reporting requirements can result in penalties.

Contact Us

For more information on Peru’s AML regime, please contact [insert contact information].