Financial Crime World

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Peru’s Compliance Risk Management: Understanding the Challenges and Laws

As organizations operating in Peru navigate the complexities of Anti-Money Laundering (AML) compliance, it is crucial to understand the key challenges and risks associated with this region. Despite Peru’s robust commitment to AML, enforcement remains a challenge, with investigations and prosecutions not meeting expected standards.

Key Challenges and Risks

Informal Economy

The informal economy, which employed approximately 70% of the population prior to the COVID-19 pandemic, presents significant tax evasion, corruption, and money laundering risks. The country’s porous borders and lack of government oversight in key areas of natural resources also contribute to illegal mining, drug trafficking, and other financial crimes.

Financial Crimes

Peru is estimated to launder between $3.2 billion and $7.9 billion annually, with nearly half of the financial intelligence reports in the last decade connected to illegal mining. The country’s weak prosecution methods are offset by stronger prevention measures, including a National Plan Against Money Laundering and Terrorist Financing.

Money Laundering Laws

The main money laundering laws in Peru include:

  • Legislative Decree 1106
  • Law Decree 25475
  • Several other legislative decrees and laws aimed at combating organized crime, corruption, human trafficking, drug trafficking, and terrorist financing

However, weaknesses remain, particularly in the areas of:

  • Cash traders
  • Banks
  • Real estate
  • Remittances from abroad

Vulnerable Sectors

The education, health, and law enforcement sectors are also vulnerable to corruption due to low pay. Cryptocurrency use is a growing concern, with Peru ranking among the top three countries in Latin America for cryptocurrency adoption. This presents significant money laundering challenges that the country’s under-resourced authorities struggle to address.

Strengthening Transparency and Information Sharing

Despite these challenges, Peru has made commitments to strengthen transparency, information sharing, and citizen participation in the fight against corruption. As organizations operating in Peru navigate AML compliance, it is essential to understand these challenges and risks to ensure effective risk management.

VinciWorks’ Comprehensive Guide

VinciWorks’ comprehensive guide provides an overview of the key AML challenges and issues in Latin America and the Caribbean, including a country-by-country assessment of AML risks and laws. The guide is designed to support businesses operating or planning to operate in the region, helping them navigate the complexities of AML compliance.

Download Your Free Copy

To download a free copy of VinciWorks’ comprehensive guide, click [here](insert link).