Financial Crime World

Peru Falls Short in Efforts to Combat Money Laundering

Introduction

A recent assessment by the Financial Action Task Force (FATF) has revealed that Peru still lags behind in implementing international standards aimed at preventing money laundering. The report highlights several areas where the country needs improvement, including effective risk assessments, national cooperation mechanisms, and laws and regulations to prevent terrorist financing.

Key Issues Identified by FATF Report

Lack of Effective Risk Assessments

  • Peru relies heavily on manual processes and lacks robust systems for identifying and mitigating risks.
  • The country still has not applied a risk-based approach to combat money laundering effectively.

Insufficient National Cooperation Mechanisms

  • Peru’s geographical location makes it a transit point for illicit financial flows.
  • The country needs to improve its national cooperation mechanisms to effectively prevent money laundering.

Ineffective Asset Confiscation and Freezing System

  • Peru lacks clear procedures for identifying and seizing illicit assets.
  • The country still has not established an effective system for confiscating and freezing assets linked to money laundering offenses.

Weak Laws and Regulations to Prevent Terrorist Financing

  • Peru’s laws and regulations are not sufficient to prevent terrorist financing activities.
  • The country needs to strengthen its legal framework to include provisions that specifically target terrorist financing activities.

Progress Made by Peru

  • The country has strengthened its customer due diligence requirements for financial institutions.
  • Peru has established a national system for reporting suspicious transactions.

Recommendations by FATF

  • Prioritize the implementation of effective risk assessments and national cooperation mechanisms.
  • Strengthen laws and regulations to address terrorist financing and money laundering offenses.

Conclusion

Peru’s government has committed to addressing these issues and implementing the necessary reforms. However, time will tell if the country can effectively combat money laundering and prevent illicit financial flows from further damaging its economy and society.