Money Laundering Risks High in Peru: Experts Warn of Growing Threat
Lima, Peru - The Peruvian government’s commitment to anti-money laundering (AML) efforts is facing challenges, with experts warning that the country remains vulnerable to financial crimes and money laundering.
Challenges in Peru’s AML Efforts
Peru’s informal economy and porous borders make it an attractive destination for illicit activities such as tax evasion, corruption, and money laundering. According to a report by VinciWorks, nearly half of the financial intelligence reports in the last decade were connected to illegal mining, which contributes significantly to the country’s GDP.
- Weak Enforcement: The informal economy employs around 70% of the population, creating an environment conducive to money laundering and corruption.
- Lack of Resources: The lack of resources for supervisory authorities and law enforcement is a major weakness in Peru.
- Porosity of Borders: Peru’s borders are porous, making it easy for illicit activities such as tax evasion, corruption, and money laundering to take place.
The Impact of Money Laundering on Peru
Peru is also a key transit point for cocaine trafficking into North America and Europe, with estimated annual losses ranging from $3.2 billion to $7.9 billion. This has significant implications for the country’s economy and security.
- Economic Implications: The financial losses due to money laundering have severe economic implications for Peru.
- Security Risks: The transit of illicit goods such as cocaine poses a significant threat to national security.
Recommendations
To address these challenges, experts recommend:
Strengthening Enforcement and Prosecution of Financial Crimes
Strengthening enforcement and prosecution of financial crimes is crucial in reducing the vulnerability of Peru to money laundering.
- Increase Resources: Increasing resources for supervisory authorities and law enforcement will help them effectively combat financial crimes.
- Improve Knowledge: Improving knowledge about financial crime among supervisory authorities and law enforcement will also enhance their ability to detect and prevent financial crimes.
Enhancing Transparency, Information Sharing, and Citizen Participation
Enhancing transparency, information sharing, and citizen participation in the fight against corruption is also essential for reducing Peru’s vulnerability to money laundering.
- Strengthen Regulations: Strengthening regulations and laws related to AML will help prevent financial crimes.
- Increase Awareness: Increasing awareness among citizens about the risks of financial crimes and the importance of reporting suspicious activities will also contribute to a safer economy.