Bolivia

Sanctions

No

FATF AML Deficient List

No

Higher Risk

Compliance with FATF 40 + 9 Recommendations
US Dept of State Money Laundering assessment 
Not on EU White list equivalent jurisdictions
Corruption Index (Transparency International & W.G.I.)
World Governance Indicators (Average Score)
Failed States Index (Political Issues)(Average Score)
International Narcotics Control Majors List (Cited)

Please reload

 

 

ANTI-MONEY LAUNDERING

 

FATF Status

Bolivia is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

 

Latest FATF Statement  -  21 June 2013

The FATF welcomes Bolivia’s significant progress in improving its AML/CFT regime and notes that Bolivia has established the legal and regulatory framework to meet its commitments in its Action Plan regarding the strategic deficiencies that the FATF had identified in February 2010. Bolivia is therefore no longer subject to FATF’s monitoring process under its on-going global AML/CFT compliance process. Bolivia will work with GAFISUD as it continues to address the full range of AML/CFT issues identified in its Mutual Evaluation Report.

 

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Bolivia was undertaken by the Financial Action Task Force (FATF) in 2011. According to that Evaluation, Bolivia was deemed Compliant for 1 and Largely Compliant for 4 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for 5 of the 6 Core Recommendations.

 

US Department of State Money Laundering assessment (INCSR)

Bolivia is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.

OVERVIEW

 

Bolivia is not a regional financial center, but remains vulnerable to money laundering.  Criminal proceeds laundered in Bolivia are derived primarily from smuggling contraband and the drug trade.  In recent years, Bolivia has enacted several laws and regulations that, taken together, should help the country more actively fight money laundering.  Bolivia should continue its implementation of its laws and regulations with the goal of identifying criminal activity that results in investigations, criminal prosecutions, and convictions.

 

​​

SANCTIONS

There are no international sanctions currently in force against this country.

 

BRIBERY & CORRUPTION

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           29

World Governance Indicator – Control of Corruption             28

Corruption is a significant obstacle to business in Bolivia. Large networks of patronage and clientelism permeate several sectors of the economy, including public procurement and the natural resource industries. The Bolivian Penal Code and the Law against Corruption, Illicit Enrichment, and the Investigation of Assets (in Spanish) comprise the legal anti-corruption framework of the country and criminalize most corruption offences, including active and passive bribery, the bribery of foreign officials, extortion and abuse of office. Nonetheless, anti-corruption laws are poorly enforced, and impunity among government officials and public servants is a problem. Bribery is widespread in almost all sectors of the economy. For further information - GAN Integrity Business Anti-Corruption Portal

 

ECONOMY

Bolivia is a resource rich country with strong growth attributed to captive markets for natural gas exports – to Brazil and Argentina. Gas accounts for roughly 50% of Bolivia's total exports and will fund more than half of its 2015 budget. However, the country remains one of the least developed countries in Latin America because of state-oriented policies that deter investment and growth.

Following a disastrous economic crisis during the early 1980s, reforms spurred private investment, stimulated economic growth, and cut poverty rates in the 1990s. The period 2003-05 was characterized by political instability, racial tensions, and violent protests against plans - subsequently abandoned - to export Bolivia's newly discovered natural gas reserves to large Northern Hemisphere markets. In 2005, the government passed a controversial hydrocarbons law that imposed significantly higher royalties and required foreign firms then operating under risk-sharing contracts to surrender all production to the state energy company in exchange for a predetermined service fee. The global recession slowed growth, but Bolivia recorded the highest growth rate in South America during 2009 and has averaged 5.3% growth each year since 2009. High commodity prices between 2010 and 2013 sustained rapid growth and large trade surpluses. The global decline in oil prices in late 2014 exerted downward pressure on the price Bolivia receives for exported gas and resulted in lower GDP growth rates and losses in government revenue in 2015.

A lack of foreign investment in the key sectors of mining and hydrocarbons, along with conflict among social groups, pose challenges for the Bolivian economy. In 2015, President Evo MORALES expanded efforts to court international investment and boost Bolivia’s energy production capacity. MORALES passed an investment law and promised not to nationalize additional industries in an effort to improve the investment climate.

Agriculture - products:

soybeans, quinoa, Brazil nuts, sugarcane, coffee, corn, rice, potatoes, chia, coca

Industries:

mining, smelting, petroleum, food and beverages, tobacco, handicrafts, clothing, jewellery

Exports - commodities:

natural gas, mineral ores, gold, soybeans and soy products, tin

Exports - partners:

Brazil 28.1%, Argentina 16.9%, US 12.1%, Colombia 6.3%, China 5.3%, Japan 4.7%, South Korea 4.3% (2015)

 

Imports - commodities:

machinery, petroleum products, vehicles, iron and steel, plastics

Imports - partners:

China 17.9%, Brazil 16.5%, Argentina 11.8%, US 10.6%, Peru 6.2%, Japan 5.2%, Chile 4.6% (2015)

Investment Climate  -  US State Department

Bolivia’s investment climate has remained relatively steady over the past five years. There have been some changes related to intellectual property and import requirements. Lack of legal security, weak rule of law, corruption, and murky international arbitration measures are all significant impediments to investment in Bolivia. At the moment, there is no significant foreign direct investment from the United States in Bolivia, and there are no initiatives designed specifically to encourage U.S. investment.

The Bolivian Constitution grants citizens and foreigners the right to private property but stipulates that the property must serve a social or economic function. If the government determines that a given property is not sufficiently useful (according to its own unclear criteria), the constitution allows the government to expropriate the property. The agricultural sector has been most hard hit by this policy due to uncertainty from year to year about whether farm land would be productive. In 2013, the government granted amnesty from the productive requirement to farmers who were impacted by forest fires; and in 2015, the government agreed to do away with the annual productivity inspections and reduce their frequency from every two to every five years, though the Congress has not yet passed these modifications. There are other laws that limit access to land, forest, water and other natural resources by foreigners in Bolivia. Bolivia lacks an adequate system of title verification and challenges to land titles are common. The absence of a reliable dispute resolution process adds to the risk and uncertainty in real property acquisition.

The investment rate as percentage of GDP (19%) is fairly low. The average rate in South America is 20% and is 22% in Colombia, Chile and Peru. There has also been a shift from private to public investment. In recent years private investment was particularly low because of the deterioration of the business environment since the beginning of the nationalization process in 2006. From 2006 to 2014, private investment, including local and foreign investment, averaged 7.5% of GDP. From 2006 to the present, public investment grew significantly, reaching an annual average of 12% of GDP. Prior to 2006 public investment averaged 6% of GDP.

FDI is highly concentrated in natural resources, especially hydrocarbons and mining, which account for nearly two-thirds of FDI. Since 2006 the net flow of FDI averaged 3% of GDP. Before 2006 it averaged around 8% of GDP.

In an effort to attract more investment, the government enacted an investment law in 2014, which says that each Ministry will provide incentives for sector-specific investment. To date, no Ministry has provided any such incentives.

 

 

Country Links

Central Bank of Bolivia

Autoridad de Supervisión del Sistema Financiero

Unidad de Investigaciones Financieras (UIF )

Other Useful Links
FATF
US State Department
Transparency International
World Bank
CIA World Factbook

KnowYourCountry Limited has achieved ISO 9001:2015 Certification for the provision of on-line information of money laundering and sanction information on a country by country basis

© 2019 - KnowYourCountry Limited