Peruvian Banking Superintendent Talks about Future of FIU

C O N F I D E N T I A L LIMA 000099 SIPDIS E.O. 12958: DECL: 2020/01/28 TAGS: ASEC EFIN SNAR PE KCRM KTFN SUBJECT: Peruvian Banking Superintendent Talks about Future of FIU and GAFISUD Priorities CLASSIFIED BY: kathy schleigh, OMS, ... id: 246091 date: 1/28/2010 20:52 refid: 10LIMA99 origin: Embassy Lima classification: CONFIDENTIAL destination: header: VZCZCXYZ0008 RR RUEHWEB DE RUEHPE #0099/01 0282052 ZNY CCCCC ZZH R 282052Z JAN 10 FM AMEMBASSY LIMA TO RUEHC/SECSTATE WASHDC 0624 INFO RUEHAC/AMEMBASSY ASUNCION RUEHBO/AMEMBASSY BOGOTA RUEHBR/AMEMBASSY BRASILIA RUEHBU/AMEMBASSY BUENOS AIRES RUEHGT/AMEMBASSY GUATEMALA RUEHLP/AMEMBASSY LA PAZ RUEHME/AMEMBASSY MEXICO RUEHMN/AMEMBASSY MONTEVIDEO RUEHPE/AMEMBASSY LIMA RUEHQT/AMEMBASSY QUITO RUEHSG/AMEMBASSY SANTIAGO -------------- header ends -------------- C O N F I D E N T I A L LIMA 000099 SIPDIS E.O. 12958: DECL: 2020/01/28 TAGS: ASEC EFIN SNAR PE KCRM KTFN SUBJECT: Peruvian Banking Superintendent Talks about Future of FIU and GAFISUD Priorities CLASSIFIED BY: kathy schleigh, OMS, State, NAS; REASON: 1.4(B) Peruvian Banking Superintendent Talks about Future of FIU and GAFISUD Priorities ¶1. (SBU) Summary: Peru's Superintendent of Banking Felipe outlined his vision for the Financial Intelligence Unit (FIU) moving forward and discussed his priorities as the new chairman of GAFISUD (spell out first usage) in a January 22 meeting with Emboffs. Accompanied by International Affairs Manager Jorge Yumi, and new FIU Director Sergio Espinosa, Tam emphasized that the investigative priorities for the FIU remain unchanged despite the recent change in leadership and that they are looking forward to continued cooperation with the U.S. Embassy. Tam said he will continue to support proposed legislation to strengthen anti-money laundering investigations and modernize the FIU as well as push at the highest levels to ensure that anti-money laundering is a priority in the GOP. End Summary. The FIU - Enrique Salvidar Steps Down, New Head Appointed ¶2. (SBU) On December 2nd, Enrique Salvidar resigned his position as head of the FIU citing personal and family reasons. At the time, there was intense speculation that he had stepped down at the request of Superintendent of Banking Felipe Tam as a result of an information leak scandal (REF A). No formal charges have been filed against Salvidar or Tam, but the Public Ministry is looking into the matter and how to ensure better control of investigative information. On December 8th, Sergio Espinosa was appointed as the new FIU Director. No other staff changes have occurred - the Deputy Director remains in place as do the section heads. For the time being, Espinosa will be wearing two hats as he is also head of Superintendency of Banking's (SBS) legal department. Espinosa has worked in the SBS for over 15 years in various departments. FIU - Looking Forward ¶3. (U) Tam explained that the FIU will be implementing a new software system that will allow the FIU to receive Suspicious Activity Reports (SARs) electronically and is looking to restructure the organization to give more authority to the FIU Director. Tam is also looking to relocate the FIU offices to a larger, more secure building. When asked about his plans for strengthening the day-to-day work of the FIU, Tam said he is pushing proposed legislation in Congress that would grant FIU access to any type of financial information such as banking and tax information that is currently considered secret or restricted. Tam and Espinosa both said the priorities and the training needs of the FIU remain unchanged and they expect things to move forward smoothly, despite the leadership change. Tam's View on Money Laundering in Peru ¶4. (C) Tam feels that the highest levels of the GOP need to have a deeper understanding of the connections between money laundering and drug trafficking. He also acknowledged that the money exchange houses are a black hole in the FIU's understanding of how money moves through the Peruvian financial sector. (NOTE: most of the money exchange houses operate in the informal sector and thus there is little-to-no official reporting to the FIU, though it is legally required). It is Tam's opinion that although addressing the role of exchange houses is difficult, it is not impossible because, according to Tam, all the money must go through a bank at some point. Tam also said that there needs to be more coordination on the gaming sector between the SBS and the Ministry of Tourism (REF B). He feels that if they can get at the gaming sector, the money exchange houses, and the construction sector, they will have tackled the greatest part of the money laundering problem in Peru. ¶5. (C) Tam also explained the challenges in working with the Public Ministry. Espinosa agreed and said they are working to maintain open communication with the prosecutors who work money laundering cases. One change they will be making this year, at the request of the Public Ministry, is that the FIU will begin filtering Financial Intelligence Reports (FIR) sent to the Prosecutor's Office for further investigation. The Public Ministry has asked that, rather than sending everything over, the FIU prioritize and focus on prosecutable cases. This is a significant change from the past modus operandi because it will give the FIU more authority and ability to prioritize cases. Tam said that one of his personal challenges with the Public Ministry is convincing the attorney general that anti-money laundering work is priority work across the board and especially in counter narcotics. Currently, the SBS pays salaries for two financial analysts in the Public Ministry and has an agreement with the Magistrates Academy to support anti-money laundering and terrorist financing courses. Tam said his vision is to advance anti-money laundering work in Peru more so than ever before. Priorities for GAFISUD ¶6. (SBU) With Peru chairing GAFISUD this year, Tam said his priorities include improving the professionalism of the GAFISUD Secretariat and supporting the intentions of Costa Rica and Panama to join GAFISUD. At the GAFISUD meeting in July, Tam said, he plans to discuss the inclusion of Costa Rica and Panama as well as the need to develop a series of meetings with Bolivia, Ecuador, and Paraguay which are struggling to implement the 40+9 recommendations established by GAFI-FATF (Financial Action Task Force) and adopted by GAFISUD. Tam said he is also looking to push micro-finance as a major tool for GAFISUD countries to address the informal sectors - a serious issue in Peru. Tam believes that by reducing the informal sector, governments can reduce avenues of money laundering, increase access to credit for lower income individuals and families and better regulate the financial sector. National Anti-Money Laundering and Terrorism Financing System ¶7. (SBU) Tam explained that another of his top priorities for the SBS is to launch a national anti-money laundering and terrorist financing system (SILAFIT),an interagency task force led by the Ministry of Economy and Finance with the SBS as the Technical Secretariat. Tam said there is political support for this idea and the Minister has agreed in principle to the SILAFIT structure. However, Tam feels that international support, especially from the U.S., would help with this priority. Comment ¶8. (SBU) The transition of leadership in the FIU seems to be going smoothly and post is encouraged by the commitment of Espinosa to maintain the FIU priorities developed under Salvidar. Tam expressed several times his hope that NAS will continue with cooperation and assistance to the FIU and said he may be looking to the U.S. Embassy for support on policy issues related to anti-money laundering. We will continue to support the FIU and seek ways encourage improvements in prosecutions and convictions of money launderers. McKinley =======================CABLE ENDS============================