Peru’s Struggle to Detect Money Laundering: A Growing Concern in Latin America
Peru, despite its robust commitment to anti-money laundering (AML) regulations, continues to face significant challenges in detecting and preventing money laundering. The country’s porous borders, illegal mining activities, drug trafficking, and informal economy have created a fertile ground for financial crimes.
The Scale of the Problem
According to estimates, between $3.2 billion and $7.9 billion is laundered every year in Peru, posing a major threat to the country’s economic stability.
National Plan Against Money Laundering and Terrorist Financing
To combat this issue, Peru has established a National Plan Against Money Laundering and Terrorist Financing, which aims to address money laundering risks across the economy. The plan focuses on strengthening transparency, information sharing, and citizen participation in the fight against corruption.
Challenges to Effective AML Enforcement
Peru’s AML laws are largely based on international standards, with key legislation including:
- Legislative Decree 1106
- Law Decree 25475
- Law 30737
However, weaknesses in enforcement, lack of knowledge about financial crimes, and inadequate resources for supervisory authorities and law enforcement agencies have hindered the country’s efforts to detect and prosecute money laundering cases.
The Informal Economy: A Significant Challenge
The informal economy, which accounts for around 70% of the population, has contributed significantly to the problem. Informal cash transactions are often undetected, allowing financial crimes to continue unchecked.
Porous Borders and Illegal Activities
Peru’s porous borders, illegal mining activities, and drug trafficking have created a significant risk for money laundering. The country is also one of the top three countries in Latin America for cryptocurrency use, which presents a growing concern for AML compliance.
Progress and Future Directions
Despite these challenges, Peru has made progress in strengthening transparency, information sharing, and citizen participation in the fight against corruption. However, more needs to be done to address the root causes of money laundering and ensure effective enforcement of AML regulations.
Resources for Businesses Operating in Peru
For businesses operating or planning to operate in Peru, it is essential to understand the key risks and challenges associated with AML compliance. VinciWorks has created a guide designed to support businesses in this regard, providing an overview of the key AML challenges and issues in Latin America and the Caribbean, as well as a country-by-country assessment of AML risks and laws.
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To download your free copy of the guide, click here.
By understanding the key AML challenges and risks associated with operating in Peru, businesses can ensure compliance with local regulations and avoid potential financial penalties.