Peru’s Banks Struggle to Comply with US-Style Anti-Money Laundering Laws

Introduction

As Peru continues to strengthen its financial system, a key challenge remains: compliance with anti-money laundering (AML) regulations. The country’s banks are grappling with the complexities of adhering to US-style laws aimed at preventing money laundering and terrorist financing.

The Challenge of AML Compliance

The Bank Secrecy Act (BSA), enacted in 1970, is a cornerstone of US AML policy. It requires financial institutions to:

• Report large cash transactions
• Maintain detailed records
• Flag suspicious activity

Peru’s banks are now facing similar requirements as the country seeks to strengthen its financial sector and join international standards.

Peru’s Financial Regulator Takes Action

The Superintendencia de Banca, Seguros y Administradoras Privadas de Fondos Comunes (SBS) is working closely with US authorities to ensure compliance. The SBS has established a dedicated AML unit to oversee the implementation of BSA-style regulations in Peru.

Key Responsibilities of the SBS’s AML Unit:

• Oversee the implementation of AML regulations
• Provide guidance and training to banks
• Ensure that financial institutions have necessary systems in place to detect and prevent money laundering

Challenges Faced by Peru’s Banks

Peru’s banks face a significant challenge in implementing these new regulations, which include requirements for:

• Customer due diligence
• Risk assessment
• Reporting of suspicious transactions

Many banks are still developing their AML capabilities, and some have expressed concerns about the costs and resources required to meet the new standards.

Support from the Peruvian Government

The Peruvian government has taken steps to support its financial institutions in meeting these challenges. In 2020, it passed a law requiring banks to implement AML controls and risk management systems.

Government Initiatives:

• Requiring banks to implement AML controls and risk management systems
• Providing guidance and training to help banks comply with regulations

International Recognition of Peru’s Efforts

While Peru’s progress on AML compliance is slow, international organizations and US authorities are taking note of the country’s efforts.

Quote from FinCEN:

“Peru has made significant strides in strengthening its financial sector, including its anti-money laundering regime.”

As Peru continues to work towards full compliance with AML regulations, it will be closely monitored by international authorities and stakeholders. The country’s success in this area will not only help prevent money laundering but also contribute to a more stable and secure financial system.