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Peru’s Money Laundering Techniques Under Scrutiny: Experts Warn of Growing Concerns

Lima, Peru - The Peruvian government is facing growing concerns over money laundering techniques used by criminal organizations to funnel billions of dollars out of the country every year.

A Key Hub for Illegal Activities

According to experts, Peru is a key hub for illegal activities, including drug trafficking and illegal mining, which are often linked to money laundering. Despite having robust national plans and policies in place to combat money laundering, enforcement remains a major challenge.

Informal Economy Contributes to Money Laundering

The informal economy is also a significant contributor to money laundering, with an estimated 70% of the population employed in the sector prior to the COVID-19 pandemic. The lack of research into this area has left authorities struggling to understand the scope and challenges posed by the informal economy.

Illegal Mining and Drug Trafficking Concerns

Illegal mining is another major concern, driven by poverty and a lack of government oversight in key areas of natural resources. Copper, zinc, gold, and other precious metals are mined illegally in Peru, presenting a significant risk for money laundering and corruption. Nearly half of the financial intelligence reports in the last decade were connected to illegal mining.

Drug trafficking is also a major issue, with Peru being the second-largest producer of cocaine in the world and serving as a key transit point for drugs being trafficked into North America and Europe.

Porous Borders Allow Illegal Activities

The country’s porous borders allow illegal goods and money to flow freely, making it easy for criminal organizations to launder their profits. An estimated $3.2 billion to $7.9 billion is laundered every year in Peru.

Efforts to Combat Money Laundering

Peru has implemented various laws to combat money laundering, including the National Plan Against Money Laundering and Terrorist Financing, which aims to address money laundering risks across the economy. The country has also established beneficial ownership registers and provides protection for corruption whistleblowers.

Weaknesses Remain in Cash Traders, Banks, and Real Estate

However, experts warn that weaknesses remain, particularly in areas such as cash traders, banks, and real estate, where financial crimes and cash laundering are rampant. Remittances from abroad are also a key risk factor, with the informal economy awash with cash that allows financial crimes to go undetected.

Cryptocurrency Use Presents Growing Concern

Cryptocurrency is another growing area of concern, with Peru being one of the top three countries in Latin America for cryptocurrency use. This presents significant money laundering challenges that the country is under-resourced to address.

Despite these challenges, Peru is considered broadly compliant with most GAFILAT technical recommendations and has committed to strengthening transparency, information sharing, and citizen participation in the fight against corruption.