Peru

Sanctions

No

FATF AML Deficient List

No

Higher Risk

US Dept of State Money Laundering assessment
Not on EU White list equivalent jurisdictions
International Narcotics Control Majors List

Medium Risk

Compliance with FATF 40 + 9 recommendations
Corruption Index (Transparency International & W.G.I.)
World Governance Indicators (Average Score)
Failed States Index (Political Issues)(Average Score)

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ANTI-MONEY LAUNDERING

FATF Status

Peru is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

 

Compliance with FATF Recommendations

The latest Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Peru was undertaken in 2019. According to that Evaluation, Peru was deemed Compliant for 16 and Largely Compliant for 18 of the FATF 40 Recommendations. It was also deemed Highly Effective for 0 and Substantially Effective for 4 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.​


 

US Department of State Money Laundering assessment (INCSR)

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

OVERVIEW

 

Billions of dollars in illicit funds from drug trafficking, illegal mining and logging, and other criminal activities continued to flow through Peru in 2018.  The government of Peru estimates illegal mining alone produced over $1 billion in illicit proceeds from January to August 2018.  

 

The government took significant steps to further strengthen its AML laws and policies in 2018, including issuing new laws requiring companies to disclose beneficial owners, expanding oversight authorities over cooperative financial institutions, and establishing a civil asset forfeiture regime.  Peru also began implementing its 2018-2021 National Plan to Combat Money Laundering (National AML Plan).

 

Nevertheless, Peru struggles to effectively enforce and implement its strong AML legal regime.  Poor interagency coordination and information sharing impedes enforcement efforts.  For example, the FIU should be able to share its reports with the police in addition to public prosecutors but is unable to do so due to current regulations.  The government should increase efforts to ensure ministries and agencies share data and better coordinate their efforts on a dayto-day basis.  Lack of expertise among police and prosecutors, high turnover, a dearth of experts in forensic accounting, and corruption within the justice sector are among the factors hindering enforcement efforts.  Peru particularly needs to develop a cadre of money laundering professionals in the justice sector. 

 

 

SANCTIONS

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

 

BRIBERY & CORRUPTION

 

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           35

World Governance Indicator – Control of Corruption             39

Corruption is a serious problem for businesses in Peru, with irregular payments, bribes and favouritism of government officials in awarding contracts being particularly common. In fact, a very weak judiciary, inefficient government bureaucracy and high levels of favoritism have culminated in high corruption levels in almost all sectors of the Peruvian economy. Corruption is criminalized through Decree No. 635 of the Peruvian Penal Code (in Spanish), which covers attempted corruption, extortion, passive and active bribery, money laundering and bribery of foreign officials. Anti-corruption laws are however, poorly enforced by the government. The Corporate Anti-Corruption Act is expected to enter into force in July 2017, and under which companies can be held directly liable for corruption offenses. The official procedure of accepting gifts and small courtesies is not specified in the penal code, thus also representing a risk for companies. Further, Peru’s Penal Code does not explicitly criminalize facilitation payments. For further information - GAN Integrity Business Anti-Corruption Portal

 

ECONOMY

Peru's economy reflects its varied topography - an arid lowland coastal region, the central high sierra of the Andes, the dense forest of the Amazon, with tropical lands bordering Colombia and Brazil. A wide range of important mineral resources are found in the mountainous and coastal areas, and Peru's coastal waters provide excellent fishing grounds. Peru is the world's second largest producer of silver and third largest producer of copper.

 

The Peruvian economy grew by an average of 5.6% from 2009-13 with a stable exchange rate and low inflation, which in 2013 was just below the upper limit of the Central Bank target range of 1% to 3%. This growth was due partly to high international prices for Peru's metals and minerals exports, which account for almost 60% of the country's total exports. Growth slipped in 2014 and 2015, due to weaker world prices for these resources. Despite Peru's strong macroeconomic performance, dependence on minerals and metals exports and imported foodstuffs makes the economy vulnerable to fluctuations in world prices.

 

Peru's rapid expansion coupled with cash transfers and other programs have helped to reduce the national poverty rate by 28 percentage points since 2002, but inequality persists and continues to pose a challenge for the Ollanta HUMALA administration, which has championed a policy of social inclusion and a more equitable distribution of income. Poor infrastructure hinders the spread of growth to Peru's non-coastal areas. The HUMALA administration passed several economic stimulus packages in 2014 to bolster growth, including reforms to environmental regulations in order to spur investment in Peru’s lucrative mining sector, a move that was opposed by some environmental groups. However, in 2015, mining investment fell as global commodity prices remained low and social conflicts plagued the sector.

 

Peru's free trade policy has continued under the HUMALA administration; since 2006, Peru has signed trade deals with the US, Canada, Singapore, China, Korea, Mexico, Japan, the EU, the European Free Trade Association, Chile, Thailand, Costa Rica, Panama, Venezuela, concluded negotiations with Guatemala and the Trans-Pacific Partnership, and begun trade talks with Honduras, El Salvador, India, Indonesia, and Turkey. Peru also has signed a trade pact with Chile, Colombia, and Mexico, called the Pacific Alliance, that seeks integration of services, capital, investment and movement of people. Since the US-Peru Trade Promotion Agreement entered into force in February 2009, total trade between Peru and the US has doubled.

 

Agriculture - products:

artichokes, asparagus, avocados, blueberries, coffee, cocoa, cotton, sugarcane, rice, potatoes, corn, plantains, grapes, oranges, pineapples, guavas, bananas, apples, lemons, pears, coca, tomatoes, mangoes, barley, medicinal plants, quinoa, palm oil, mari

 

Industries:

mining and refining of minerals; steel, metal fabrication; petroleum extraction and refining, natural gas and natural gas liquefaction; fishing and fish processing, cement, glass, textiles, clothing, food processing, beer, soft drinks, rubber, machinery

 

Exports - commodities:

copper, gold, lead, zinc, tin, iron ore, molybdenum, silver; crude petroleum and petroleum products, natural gas; coffee, asparagus and other vegetables, fruit, apparel and textiles, fishmeal, fish, chemicals, fabricated metal products and machinery, allo

 

Exports - partners:

China 22.1%, US 15.2%, Switzerland 8.1%, Canada 7% (2015)

 

Imports - commodities:

petroleum and petroleum products, chemicals, plastics, machinery, vehicles, TV sets, power shovels, front-end loaders, telephones and telecommunication equipment, iron and steel, wheat, corn, soybean products, paper, cotton, vaccines and medicines

 

Imports - partners:

China 22.7%, US 20.7%, Brazil 5.1%, Mexico 4.5% (2015)

 

Investment Climate  -  US State Department

Peru was one of the fastest growing Latin American economies between 2004 and 2013, growing an average of 6% per year. Though growth slowed in 2014 and 2015, Peru’s 3.3% growth in 2015 remained higher than the -0.3% regional average. The government’s counter-cyclical stimulus spending, consumption, and private investment are the main driving forces of this growth. Private investment totaled USD 39.3 billion in 2014. As the economy has grown, poverty in Peru has steadily decreased falling by half from 56% in 2005 to 22.7% in 2015, according to the World Bank. President Ollanta Humala has promoted private and public investment in infrastructure projects in transportation, telecommunications, energy, sanitation, airports, and maritime ports. In addition, the Government of Peru (GOP) has encouraged integration with the global economy by signing a number of free trade agreements, including the United States-Peru Trade Promotion Agreement (PTPA), which entered into force in February 2009. In 2015, trade between the United States and Peru totaled USD 13.9 billion up from USD 9.1 billion in 2009, the year PTPA entered into force. From 2009 to 2015, Peruvian exports to the United States jumped from USD 4.2 billion to USD 5.1 billion (a 21% increase) while U.S. exports to Peru jumped from USD 4.9 billion to USD 8.8 billion (an 80% increase).

 

Corruption and civil unrest around extractive projects continue to negatively affect Peru’s investment climate. Transparency International ranked Peru 88th out of 175 countries in its 2015 Corruption Perceptions Index, three points lower than 2014. As of October 2015, 10 of 25 regional governors were either under preliminary investigation or appealing corruption-related charges. Ideological opposition to foreign mining firms led to violent protests against Mexican and Chinese-owned mining projects in 2015.

 

Extractive industries are a key draw of foreign investment. According to Peru’s investment promotion agency, Proinversion, 24% of foreign direct investment in 2014 went to the mining sector, 13% to energy, and 3% to petroleum. Other destinations for investment included finance (18%) and communications (17%)

 

Country Links
Financial Intelligence Unit of Peru (FIU-Peru)​
Superintendencia de Banca, Seguros y AFP (SBS)
Superintendencia del Mercado de Valores (SMV)
Central Reserve Bank of Peru
Other Useful Links
FATF
US State Department
Transparency International
World Bank
CIA World Factbook

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