Peru Falls Short in Implementing Anti-Money Laundering Laws
Global Watchdog Finds Significant Gaps in Implementation
A recent evaluation by the Financial Action Task Force (FATF), a global standard-setter for anti-money laundering and combating the financing of terrorism, has found that Peru has significant gaps in its implementation of anti-money laundering laws. The assessment, conducted in 2019, evaluated Peru’s compliance with the FATF Recommendations, a set of standards that countries are expected to follow to prevent money laundering and terrorist financing.
Key Areas of Concern
The evaluation highlighted several key areas where Peru needs to improve:
- Assessing Risk and Applying a Risk-Based Approach (R.1): Peru scored poorly in this area, indicating a need for stronger customer due diligence requirements for financial institutions.
- National Cooperation and Coordination (R.2): The country’s reporting of suspicious transactions was also found to be inadequate, highlighting the need for improved cooperation between agencies.
- Confiscation and Provisional Measures (R.4): Peru’s powers of supervisors were deemed insufficient to ensure effective regulation and supervision of financial institutions.
Areas of Non-Compliance
Peru was also found to be non-compliant in several areas, including:
- Transparency and Beneficial Ownership of Legal Persons (R.24): The country needs to increase transparency in the beneficial ownership of legal persons and arrangements.
- Regulation and Supervision of Financial Institutions (R.26): Peru’s regulatory framework for financial institutions was found to be inadequate.
Roadmap for Improvement
The FATF evaluation provides a roadmap for Peru to improve its anti-money laundering framework, including:
- Strengthening its regulatory framework
- Enhancing cooperation with international partners
- Improving transparency and accountability
Implications for the Economy and Financial System
Peru’s poor performance in implementing anti-money laundering laws has significant implications for the country’s economy and financial system. Money laundering can have a corrosive effect on economies, undermining trust in financial institutions and facilitating organized crime.
Conclusion
While Peru has made some progress in implementing anti-money laundering laws, it still has significant gaps that need to be addressed. With a strong commitment from the government and effective implementation of the FATF Recommendations, Peru can improve its compliance with international standards and reduce the risks associated with money laundering and terrorist financing.