Financial Crime World

Financial Crime Investigation Process in Peru Faces Significant Challenges

Lima, Peru - Despite efforts to strengthen anti-money laundering regulations and enforcement, Peru continues to face significant challenges in investigating financial crimes.

A Recent Report Highlights Key Risks and Weaknesses

  • An estimated $3.2 billion to $7.9 billion is laundered every year in Peru.
  • Nearly half of the financial intelligence reports in the last decade are connected to illegal mining.
  • The country’s weak prosecution and lack of knowledge about financial crimes are major concerns.

A National Plan Against Money Laundering and Terrorist Financing

Peru has a comprehensive plan that aims to address money laundering risks across the economy. However, the report notes that cash traders, banks, and real estate are key channels for financial crimes and laundering cash. Mining is also a significant contributor to the Peruvian economy, with illegal mining operations drawing in organized crime.

Weaknesses in Peru’s AML Framework

The following weaknesses have been identified:

  • Insufficient knowledge of financial crime and resources for supervisory authorities and law enforcement: Lack of expertise and inadequate funding hinder efforts to investigate and prosecute financial crimes.
  • Remittances from abroad as a key risk factor: Increased opportunities for money laundering through remittances from abroad exacerbate the problem.
  • The informal economy, which is awash with cash: The lack of regulation in the informal economy allows financial crimes to continue undetected.
  • Public financed projects susceptible to money laundering and corruption: Vulnerability of public projects to financial malfeasance undermines trust in government institutions.

Peru’s AML Framework: Compliant but Challenged

While Peru is considered broadly compliant with most of GAFILAT’s technical recommendations, the country continues to face significant challenges in investigating financial crimes. The report notes that Peru has committed to strengthening transparency, information sharing, and citizen participation in the fight against corruption.

Conclusion

Addressing the weaknesses in Peru’s AML framework will require a concerted effort from the government, law enforcement, and other stakeholders to improve knowledge of financial crime and resources for supervisory authorities and law enforcement.

Sources:

  • VinciWorks report on AML risks and laws in Latin America and the Caribbean
  • National Plan Against Money Laundering and Terrorist Financing (Peru)
  • Legislative Decree 1106 (Peru)
  • Law Decree 25475 (Peru)