Peru’s Check Fraud Investigation Procedures Under Scrutiny: Challenges and Weaknesses Revealed
Lima, Peru - As part of its ongoing efforts to combat money laundering and financial crimes, Peru’s authorities are facing significant challenges in investigating and prosecuting check fraud cases. A recent report has highlighted the country’s weak enforcement mechanisms, porous borders, and lack of knowledge about the informal economy as key risks.
The Scale of the Problem
According to sources, an estimated $3.2 billion to $7.9 billion is laundered annually through illegal activities such as drug trafficking, mining, and corruption. Peru’s National Plan Against Money Laundering and Terrorist Financing aims to address these risks across the economy, but experts say more needs to be done.
Key Channels for Financial Crimes
The report identified cash traders, banks, and real estate as key channels for financial crimes and laundering cash. Mining operations, particularly illegal ones, are also seen as a significant contributor to the problem. Remittances from abroad and the informal economy’s reliance on cash further increase opportunities for money laundering.
Sectors at High Risk
- Public financed projects
- Government assistance to vulnerable populations
- Political campaigning
- Education sector (low pay)
- Health sector (low pay)
- Law enforcement sector (low pay)
Cryptocurrency Concerns
Peru ranks among the top three in Latin America for its use of cryptocurrency, but authorities are under-resourced to address the significant money laundering challenges posed by this trend.
AML Policy Weaknesses
- Lack of resources for supervisory authorities and law enforcement agencies
- Ineffective implementation of legal framework (Legislative Decree 1106 and Law 30737)
Progress Made
Despite these challenges, Peru has made progress in some areas:
- Establishing beneficial ownership registers
- Protecting corruption whistleblowers
What Can Businesses Do?
Experts say that businesses operating or planning to operate in Peru need to be aware of these risks and take steps to comply with AML regulations.
Free Guide
VinciWorks has created a guide designed to support businesses in this region, providing an overview of key AML challenges and issues as well as a country-by-country assessment of AML risks and laws. Download the free guide now to learn more about AML compliance in Peru and other countries in Latin America and the Caribbean.