Peru’s New Crackdown on Financial Crimes: A Step Forward in Fighting Money Laundering and Terrorist Financing?
Peru’s Financial Intelligence Unit (FIU) is receiving a significant boost in its powers to combat money laundering and crimes related to terrorism. The government’s move comes as concerns over Peru’s vulnerability to financial crimes continue to mount. In this article, we take a closer look at the extent of Peru’s money laundering problem, the effectiveness of past measures, and the new measures aimed at tackling these issues.
What can we expect from Peru’s strengthened Financial Intelligence Unit (FIU)? And how big is Peru’s problem with money laundering?
According to Fernando Castañeda, partner at Diaz, Reus & Targ LLP, Lima Office (Aramburú Castañeda Boero Abogados), the new legislation, Legislative Decree Number 1249, will significantly strengthen Peru’s Financial Intelligence Unit. This will enable the unit to supervise an expanded list of subjects suspected of involvement in money laundering operations:
- Credit- and debit-card processing companies
- Lawyers and accountants
- Real estate agents
- Travel agencies
- Lodging establishments
- Mining companies
- Lottery games, and some others.
Castañeda also shares worrying estimates from the Peruvian Association of Anti-Money Laundering Authorities (ASBanc), which suggest that approximately $13 billion in assets from illicit drug trafficking, illegal mining, and crimes against public administrations were laundered in Peru between January 2007 and March 2016.
How effective have Peru’s past efforts to tackle financial crimes been? What are the most pressing challenges yet to be addressed?
Castañeda acknowledges past efforts such as the expansion of the FIU’s powers and the creation of the Centralized Organization for the Prevention of Money Laundering and Terrorist Financing. He, however, emphasizes the need for the following:
- Formalizing commercial transactions: There needs to be more focus on formalizing commercial transactions in the country.
- Increasing the state’s presence: A greater state presence is required in areas where informal mining, drug production, and marketing take place.
Castañeda also highlights the importance of cooperation from all government bodies, including the executive, legislative, and judicial branches, to successfully eradicate corruption, money laundering, and terrorist financing in Peru.