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Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Regulations in Peru

Peru has implemented various regulations to combat money laundering and terrorism financing. The following are some key aspects of these regulations:

Identification and Registration of Politically Exposed Persons (PEPs)

• PEPs are individuals who hold or have held high-ranking government positions, their family members, and close associates.
• Financial institutions must identify and register PEPs in their systems to ensure enhanced due diligence.

Enhanced Due Diligence for Correspondent Banking Relationships

• Financial institutions must conduct enhanced due diligence on correspondent banking relationships with foreign banks.
• This includes verifying the identity of the foreign bank, assessing its risk profile, and monitoring transactions.

Restrictions on Transactions with Shell Banks

• Financial institutions are prohibited from conducting transactions with shell banks, which are banks that lack a physical presence or have no legitimate business activities.
• Shell banks are often used to launder money or finance terrorist activities.

Requirements for Non-Face-to-Face Transactions and/or Relationships

• Financial institutions must implement procedures to verify the identity of customers in non-face-to-face transactions or relationships.
• This includes using digital verification methods, such as online authentication and biometric identification.

Suspicious Activity Reports (SARs) to UIF-Peru

• Financial institutions must file SARs with the Peruvian Financial Intelligence Unit (UIF-Peru) for any suspicious transactions or activities.
• SARs must be filed within a specified timeframe, usually 5 days from the date of detection.

Penalties for Non-Compliance with Reporting Requirements

• Failure to comply with reporting requirements can result in severe penalties, including fines and reputational damage.
• Financial institutions must ensure that they have adequate systems and controls in place to prevent non-compliance.

Use of Automated Suspicious Transaction Monitoring Technology

• Financial institutions are encouraged to use automated suspicious transaction monitoring technology to detect and report suspicious transactions.
• This technology can help identify patterns and anomalies that may indicate money laundering or terrorist financing activities.

Reporting on AML Systems and Controls by External Auditors or Organizations

• Financial institutions must submit reports on their AML systems and controls to external auditors or organizations, as required by law.
• These reports must provide an independent assessment of the effectiveness of a financial institution’s AML controls.