Financial Crime World

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Peru Makes Strides in Combating Financial Crime, But Still Lags Behind International Standards

A recent report by the Financial Action Task Force (FATF) has found that Peru has made progress in implementing measures to prevent financial crime, but still faces significant challenges. The country’s mutual evaluation report for 2019 assessed its compliance with FATF Recommendations and identified areas of improvement.

Risk Assessment and National Cooperation

Peru was found to be largely compliant with Recommendation R.1 on assessing risk and applying a risk-based approach. However, the country needs to strengthen its national cooperation and coordination efforts (R.2) to effectively combat financial crime.

Key Findings:

  • Peru is largely compliant with Recommendation R.1
  • Needs improvement in national cooperation and coordination efforts (R.2)

Money Laundering Offence and Confiscation Measures

The report noted that Peru has made significant progress in enacting laws to prevent money laundering (R.3) and confiscating assets linked to financial crimes (R.4). However, the country still needs to improve its implementation of these measures.

Key Findings:

  • Peru has made significant progress in enacting laws to prevent money laundering
  • Needs improvement in implementing confiscation measures

Terrorist Financing and Targeted Sanctions

Peru was found to be largely compliant with Recommendations R.5 on terrorist financing offences and R.6 on targeted financial sanctions related to terrorism and terrorist financing. The country also made progress in implementing targeted financial sanctions related to proliferation (R.7).

Key Findings:

  • Peru is largely compliant with Recommendations R.5 and R.6
  • Made progress in implementing targeted financial sanctions related to proliferation

Non-Profit Organizations and Financial Institution Secrecy Laws

However, Peru’s implementation of measures to prevent the misuse of non-profit organizations (R.8) was deemed partially compliant. Additionally, the country still needs to strengthen its laws on financial institution secrecy (R.9).

Key Findings:

  • Partially compliant with Recommendation R.8
  • Needs improvement in strengthening laws on financial institution secrecy

Customer Due Diligence and Record Keeping

Peru was found to be largely compliant with Recommendations R.10 on customer due diligence and R.11 on record keeping.

Key Findings:

  • Peru is largely compliant with Recommendations R.10 and R.11

Politically Exposed Persons and Correspondent Banking

The report noted that Peru has made progress in implementing measures to prevent the misuse of politically exposed persons (R.12) and correspondent banking relationships (R.13).

Key Findings:

  • Made progress in implementing measures to prevent the misuse of PEPs
  • Made progress in implementing measures related to correspondent banking

Money or Value Transfer Services and Wire Transfers

Peru was found to be largely compliant with Recommendations R.14 on money or value transfer services and R.16 on wire transfers.

Key Findings:

  • Peru is largely compliant with Recommendations R.14 and R.16

Internal Controls and Foreign Branches and Subsidiaries

The country still needs to improve its implementation of internal controls (R.18) and measures to prevent the misuse of foreign branches and subsidiaries.

Key Findings:

  • Needs improvement in implementing internal controls
  • Needs improvement in preventing the misuse of foreign branches and subsidiaries

Reporting of Suspicious Transactions and Tipping-Off

Peru was found to be compliant with Recommendations R.20 on reporting of suspicious transactions and R.21 on tipping-off and confidentiality.

Key Findings:

  • Peru is compliant with Recommendations R.20 and R.21

DNFBPs: Customer Due Diligence and Other Measures

The report noted that Peru’s implementation of measures to prevent the misuse of designated non-financial businesses and professions (DNFBPs) was partially compliant.

Key Findings:

  • Partially compliant with DNFBP regulations

Transparency and Beneficial Ownership

Peru still needs to strengthen its laws on transparency and beneficial ownership of legal persons (R.24) and legal arrangements (R.25).

Key Findings:

  • Needs improvement in strengthening laws on transparency and beneficial ownership

Regulation and Supervision of Financial Institutions and DNFBPs

The country’s implementation of measures to regulate and supervise financial institutions (R.26) and DNFBPs (R.28) was deemed partially compliant.

Key Findings:

  • Partially compliant with regulations related to supervision and regulation of FI and DNFBPs

Financial Intelligence Units and Law Enforcement Authorities

Peru was found to be largely compliant with Recommendations R.29 on financial intelligence units and R.30 on the responsibilities of law enforcement and investigative authorities.

Key Findings:

  • Peru is largely compliant with recommendations related to FIUs and LEAs