Financial Crime World

Compliance Risk Management in Peru: A Mixed Bag

The Financial Action Task Force (FATF) has recently released its latest report on Peru’s compliance with anti-money laundering and combating terrorist financing regulations. The ratings reflect the extent to which Peru has implemented the technical requirements of the FATF Recommendations.

Strengths and Weaknesses

According to the report, Peru scored well in areas such as:

  • National cooperation and coordination (R.2)
  • Confiscation and provisional measures (R.4)
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)

However, it fell short in others, including:

  • Assessing risk and applying a risk-based approach (R.1)
  • Transparency and beneficial ownership of legal persons and arrangements (R.24 and R.25)
  • Regulation and supervision of DNFBPs (R.28)

Ratings

Peru received a “compliant” rating for several areas, including:

  • Money laundering offence (R.3)
  • Terrorist financing offence (R.5)
  • Targeted financial sanctions related to proliferation (R.7)
  • Correspondent banking (R.13)
  • Wire transfers (R.16)
  • Internal controls and foreign branches and subsidiaries (R.18)

The country was found to be “largely compliant” in areas such as:

  • Customer due diligence (R.10)
  • Record keeping (R.11)

And “partially compliant” in areas such as:

  • New technologies (R.15)
  • Reliance on third parties (R.17)
  • DNFBPs: other measures (R.23)

Call to Action

Peru’s compliance with FATF Recommendations has been a subject of concern for some time, and this latest report highlights the need for continued improvement. The country must address its weaknesses in order to effectively combat money laundering and terrorist financing.

Positive Steps Forward

The report also notes that Peru is working to strengthen its regulations and supervision of financial institutions, as well as its powers of supervisors (R.27). This is a positive step towards improving compliance risk management in the country.

Conclusion

While there are areas where Peru has made progress, it still faces significant challenges in implementing effective anti-money laundering and combating terrorist financing measures. The country must continue to work towards strengthening its regulations and supervision to ensure that it is fully compliant with FATF Recommendations.