Supreme Decree No. 003-2018-JUS Approving the National Plan against Money Laundering and Terrorist Financing 2018-2021

Supreme Decree No. 003-2018-JUS

MINISTRY OF JUSTICE AND HUMAN RIGHTS
J. Falconi Gálvez

APPROVE THE NATIONAL PLAN AGAINST MONEY LAUNDERING AND TERRORIST FINANCING 2018-2021

THE PRESIDENT OF THE REPUBLIC

CONSIDERING:

That, the Political Constitution of Peru establishes in Article 8 that the State combats and sanctions the illicit trafficking of drugs and in Article 44 as its primary duties to guarantee the full exercise of human rights and protect the population against threats to their security, which imply a frontal fight against terrorist financing;

That, through Article 1 of Supreme Decree No. 057-2011-PCM, published on July 1, 2011, the National Plan to Fight Money Laundering and Terrorist Financing was approved and through Article 2 of the aforementioned Supreme Decree, the Multi-sectoral Executive Commission against Money Laundering and Terrorist Financing - CONTRALAFT, was created, in order to monitor the implementation, compliance and updating of the aforementioned National Plan;

That, through Supreme Decree No. 018-2017-JUS, published on September 15, 2017, the National Policy against Money Laundering and Terrorist Financing was approved and CONTRALAFT was strengthened, incorporating new member entities and assigning it new functions;

That, likewise, the Only Complementary Final Provision of Supreme Decree No. 018-2017-JUS establishes that within a maximum period of ninety (90) calendar days following its publication, by Supreme Decree, proposed by CONTRALAFT, it corresponds to approve the National Plan against Money Laundering and Terrorist Financing, as an instrument for the implementation of the National Policy against Money Laundering and Terrorist Financing;

That, after a participatory process, the members of CONTRALAFT, through Agreement No. 08-2017-CONTRALAFT, adopted in its Third Session, held on October 27, 2017, unanimously approved the proposal for the National Plan against Money Laundering and Terrorist Financing 2018-2021, which defines in a temporal scenario, specific objectives, concrete actions, those responsible for its implementation and measurement indicators;

That, in such sense, it is necessary to approve the National Plan against Money Laundering and Terrorist Financing 2018-2021, in order to have an instrument that guarantees the implementation of the National Policy against Money Laundering and Terrorist Financing in the short and medium term.

IN ACCORDANCE with the subsection 8) of Article 118 of the Political Constitution of Peru; Articles 4 and 11 subsection 3 of Law No. 29158, Organic Law of the Executive Power; the Only Complementary Final Provision of Supreme Decree No. 018-2017-JUS;

DECREES:

Article 1.- Approval
The National Plan against Money Laundering and Terrorist Financing 2018-2021 is approved, which as an Annex forms an integral part of this Supreme Decree.

Article 2.- Execution and compliance
The highest authorities of the public entities responsible in the National Plan against Money Laundering and Terrorist Financing 2018-2021 will adopt, within the scope of their competencies, the necessary measures for its execution and ensure its compliance, ensuring that actions and expenses are included in their Operational Plans and Institutional Budgets.

Article 3.- Financing
The implementation and compliance of the National Plan against Money Laundering and Terrorist Financing 2018-2021, are financed from the institutional budget of the public entities involved and within the framework of the Annual Budget Laws.

Article 4.- Monitoring and evaluation
CONTRALAFT, within the framework of its functions, and through its Technical Secretariat, will issue an annual technical report on the progress in the implementation of the National Plan against Money Laundering and Terrorist Financing 2018-2021. For these purposes, it must have a management tool that allows integrating and standardizing the collection, recording and handling of the information that responsible public entities must report periodically.

Each responsible public entity must designate a primary and an alternate representative before CONTRALAFT, upon whom falls the obligation to report on its implementation. In the case of responsible public entities that are members of CONTRALAFT, this responsibility falls on the accredited representatives.

Article 5.- Publication
This Supreme Decree and its Annex are published in the official newspaper El Peruano and, on the same date, on the Portal of the Peruvian State (www.peru.gob.pe) and on the Institutional Portals of the Ministry of Justice and Human Rights (www.minjus.gob.pe) and of the Superintendence of Banks, Insurance and Private Pension Fund Administrators (www.sbs.gob.pe).

Article 6.- Countersignature
This Supreme Decree is countersigned by the Minister of Justice and Human Rights, the Minister of Foreign Affairs, the Minister of the Interior, the Minister of Economy and Finance, the Minister of Foreign Trade and Tourism, the Minister of Transport and Communications and the Minister of Defense.

Complementary Derogatory Provision
ONLY.- Article 1 of Supreme Decree No. 057-2011-PCM is repealed.

Given in the Government House, in Lima, on the tenth day of March of the year two thousand eighteen.

[Signatures]

National Plan against Money Laundering and Terrorist Financing 2018-2021

INDEX
NATIONAL PLAN AGAINST MONEY LAUNDERING AND TERRORIST FINANCING 2018-2021 ACRONYMS GLOSSARY OF TERMS
I. PRESENTATION
II. BACKGROUND OF THE NATIONAL PLAN
III. DEVELOPMENT FRAMEWORK OF THE NATIONAL PLAN
IV. PARTICIPATORY PROCESS FOR THE DEVELOPMENT OF THE NATIONAL PLAN
V. CONTENT OF THE NATIONAL PLAN
VI. MONITORING AND FOLLOW-UP OF THE NATIONAL PLAN

ANNEX I
ACRONYMS
ALA/CFT: Anti-Money Laundering and Countering the Financing of Terrorism.
APN: National Port Authority.
APNFD: Designated Non-Financial Businesses and Professions.
APCI: Peruvian Agency for International Cooperation.
IDB: Inter-American Development Bank.
CEPLAN: National Center for Strategic Planning.
CCFFAA: Joint Command of the Armed Forces.
CGR: Comptroller General of the Republic.
CONTRALAFT: Multi-sectoral Executive Commission against Money Laundering and Terrorist Financing.
CONSUF: Council for the Supervision of Foundations.
DEVIDA: National Commission for the Development and Life without Drugs.
DICAPI: General Directorate of Captaincies and Coast Guard.
DINI: National Intelligence Directorate.
DIRILA: Money Laundering Investigation Directorate.
ENR: National Risk Assessment of Money Laundering and Terrorist Financing.
FISLAAPD: Specialized Prosecutor's Office for Money Laundering and Loss of Domain Crimes.
FT: Terrorist Financing.
FN: Public Prosecutor's Office.
IMF: International Monetary Fund.
FATF: Financial Action Task Force.
FATF-LATAM: Financial Action Task Force of Latin America (formerly Financial Action Task Force of South America - GAFISUD).
GIZ (or Deutsche Gesellschaft für Internationale Zusammenarbeit): German Cooperation implemented by GIZ.
INEI: National Institute of Statistics and Informatics.
ML: Money Laundering.
ML/TF: Money Laundering and/or Terrorist Financing.
MEF: Ministry of Economy and Finance.
MINJUS: Ministry of Justice and Human Rights.
MINCETUR: Ministry of Foreign Trade and Tourism.
MININTER: Ministry of the Interior.
Ministry of Foreign Affairs: Ministry of Foreign Affairs.
MP: Public Ministry.
MTC: Ministry of Transport and Communications.
UN: United Nations Organization.
NGOs: Non-Governmental Organizations.
PEDET: Public Prosecutor's Office Specialized in Terrorism Crimes.
PEP: Politically Exposed Persons.
PJ: Judicial Power.
PLAPD: Public Prosecutor's Office Specialized in Money Laundering Crimes and Loss of Domain Processes.
PNP: National Police of Peru.
PRONABI: National Program of Seized Goods of MINJUS.
SAR: Suspicious Activity Report.
SBS: Superintendence of Banks, Insurance and Private Pension Fund Administrators.
SECO: State Secret for Economic Affairs of Swiss Cooperation.
SMV: Securities Market Superintendence.
SO: Obligated Subject.
SUCAMEC: National Superintendence of Control of Security Services, Arms, Ammunition and Explosives for Civil Use, attached to the Ministry of the Interior.
SUNARP: National Superintendence of Public Registries.
SUNAT: National Superintendence of Customs and Tax Administration.
UIF-Peru: Financial Intelligence Unit of Peru, a specialized unit of the SBS.

GLOSSARY
Beneficial owner: natural person who controls a client or in whose name the transaction is carried out and/or who effectively and finally owns or controls legal persons or legal entities.
Confiscation: is an accessory consequence that allows recovering the products, effects, instruments and gains of the crime. It requires a criminal conviction and is part of the sentence.
Predicate offense: is the source crime generating illicit gains or assets, which are subsequently laundered through money laundering. It is provided for in the second paragraph of Article 10 of Legislative Decree No. 1106.
Terrorist financing: crime typified in Article 4-A of Decree Law No. 25475, Decree Law that establishes the penalty for terrorism crimes and the procedures for investigation, instruction and trial, and its modifying norms; as well as Article 297, last paragraph, of the Penal Code and its modifying norms. Seizure (of a precautionary nature) is a coercive measure dictated within the framework of a criminal process that prevents the ownership of goods or things related to the crime. Suspicious transactions: are civil, commercial or financial transactions that have an unusual magnitude or speed of rotation, or conditions of unusual or unjustified complexity, which are presumed to proceed from some illicit activity, or that, for any reason, do not have an economic or lawful or apparent basis (Article 11 of Law No. 27693). Non-profit organizations: those natural or legal persons that collect, transfer and disburse funds, resources or other assets for charitable, religious, cultural, educational, scientific, artistic, social, recreational or solidarity purposes or for the realization of other types of altruistic or benevolent actions or works. Includes the facilitation of credits, microcredits or any other type of economic financing (Article 3, numeral 3.2.2 of Law No. 29038). Politically Exposed Persons: natural persons, nationals or foreigners, who hold or have held prominent public functions or prominent functions in an international organization in the last five (5) years, either in national or foreign territory, and whose financial circumstances may be subject to public interest. Likewise, a PEP is considered to be the direct collaborator of the highest authority of the institution (Article 2 of SBS Resolution No. 4349-2016). Loss of domain: is a legal-patrimonial consequence through which the ownership of the objects, instruments, effects and gains of the crime is declared in favor of the State by sentence of the jurisdictional authority, through due process (Article 2, numeral 2.1, of Legislative Decree No. 1104). National Policy: defines the priority objectives, guidelines, main contents of public policies, national compliance standards and the provision of services that must be achieved and supervised to ensure the normal development of public and private activities (Article 4, numeral 1, of Law No. 29158, Organic Law of the Executive Power). Asset Recovery: refers to legal mechanisms, such as confiscation or loss of domain, which allow depriving the offender of the goods he has used for the execution of the crime (instruments) or the products obtained as a consequence of the crime (effects and gains); and, achieve their restitution in favor of the State. Civil reparation: is the compensation of the good or indemnification that must be granted by who produced the damage as a consequence of the crime, in favor of the victim [the State in cases of ML/TF]; and, according to Article 93 of the Penal Code, it comprises: a) the restitution of the good
or, if not possible, the payment of its value; and b) the indemnification of damages and losses. It is joint if there are several offenders and its compliance is transmissible to the heirs. Incidence actions report: document containing information on the activities developed to comply with the action. Suspicious Transaction Report: document of a reserved nature that is prepared and communicated by the obligated subject or by a supervisory body to UIF-Peru, when indications of ML/TF are detected. Obligated Subject: public entity, natural or legal person obliged to provide information to UIF-Peru, designated as such in Article 3 of Law No. 29038.

I. PRESENTATION
Criminal organizations dedicated to ML/TF expand crossing borders of countries and continents and use high levels of sophistication and technology. To face these advances, it is fundamental to articulate the efforts of all State actors responsible for preventing and combating such illicit activities. Thus, having a National Plan constitutes a vital planning instrument to implement actions in the short and medium term. For this reason, in 2011, and based on the ML/TF risks identified in 2010, through Supreme Decree No. 057-2011-PCM, the National Plan to Fight Money Laundering (ML) and Terrorist Financing (TF) was approved, creating CONTRALAFT, with the main responsibility of monitoring its implementation. In 2016, and taking as reference the 40 Recommendations of the FATF, a new ML/TF risk assessment was carried out, which identified the current threats and risks facing the country in this area. Based mainly on this new diagnosis, the first National Policy against ML/TF was elaborated; as a long-term strategic instrument - approved through Supreme Decree No. 018-2017-JUS -; and, from this framework, the present National Plan has been developed to guarantee its implementation in the short and medium term; thus giving continuity to the path started in 2011. The present National Plan, approved after a participatory process (January - October 2017) by the member entities of CONTRALAFT (Agreement No. 08-2017-CONTRALAFT) defines in a temporal scenario, specific objectives, concrete actions, those responsible for its implementation and measurement indicators. There is no doubt that compliance with our obligations to prevent and combat ML/TF, whether as officials, obligated subjects or in our condition as citizens, will prevent crime from continuing to use the formal system to mobilize its assets; but above all it will contribute to creating a culture of legality necessary to strengthen economic, political and social stability. I conclude this presentation transmitting our gratitude to the German Cooperation implemented by GIZ, whose technical and financial support was fundamental for this process. Lima, January 2018 Juan Teodoro Falconí Galvez Vice Minister of Justice President of CONTRALAFT

II. BACKGROUND
On July 1, 2011, through Supreme Decree No. 057-2011-PCM, the National Plan to Fight Money Laundering and Terrorist Financing was approved, which was elaborated in a participatory manner between 21 institutions of the State and an equal number of entities from the private sector; an inter-institutional effort led by the SBS, with the technical assistance of the IMF. This Plan was based on the analysis of the main threats and vulnerabilities in terms of ML/TF that Peru faced at that time, which allowed this instrument to address such vulnerabilities (among structural and functional), in order to mitigate the risk of ML/TF. The definition of objectives and actions was based on the functional vulnerabilities identified for each of the constituent components (prevention, detection and criminal repression). In general terms, the National Plan was implemented almost in its entirety; given that, with respect to the component of Strengthening the Prevention of ML/TF, 78% of the actions were fulfilled; with respect to the component of strengthening detection, 52% were fulfilled; and finally, with respect to the component of strengthening criminal repression, 58% were fulfilled. However, some actions remained pending to be addressed or completed, which have been evaluated within the framework of the new risks in terms of ML/TF that the country presents during the process of elaboration of the present National Plan.

III. DEVELOPMENT FRAMEWORK OF THE NATIONAL PLAN
The present National Plan against Money Laundering and Terrorist Financing (hereinafter, National Plan), through which the path started in 2011 is continued, is configured as an element of short and medium-term planning, which develops within the scope of the first National Policy in the matter, whose proposal was approved by CONTRALAFT in March 2017 and by the Executive Power through Supreme Decree No. 018-2017-JUS, published on September 15 of the same year, in whose Only Complementary Final Provision it is established that:
"Within a maximum period of ninety (90) calendar days following the publication of this norm, by Supreme Decree, proposed by CONTRALAFT, the National Plan against Money Laundering and Terrorist Financing is approved, as an instrument for the implementation of the National Policy against Money Laundering and Terrorist Financing".

On the framework of the National Policy that was approved by CONTRALAFT in March 2017, which is based mainly on the National Risk Assessment of ML/TF (2016), a participatory process was initiated for the elaboration of the present National Plan, in order to define in a temporal scenario, specific objectives, concrete actions, those responsible for its implementation and measurement indicators, taking into consideration as well those actions of the current National Plan pending implementation and that according to the new risk scenario detected, it was still necessary to address.

IV. PARTICIPATORY PROCESS FOR THE DEVELOPMENT OF THE NATIONAL PLAN
The National Plan is the product of a participatory process in which various public entities have intervened, whose competencies are directly or indirectly circumscribed to the adoption of measures to counteract ML/TF.
The methodology followed in the process of elaboration of the National Plan, coordinated by the SBS through UIF-Peru in its capacity as Technical Secretariat of CONTRALAFT, and which counted with the technical assistance of the German Development Cooperation implemented by GIZ, is based on three fundamental aspects:

• The specific objectives and guidelines of the National Policy.
• The conclusions and recommendations of the National Risk Assessment of ML/TF (2016) and the Sectoral Evaluations of Exposure to ML/TF Risks of the mining and fishing sectors (2016); and
• The active participation of public bodies that play a fundamental role in the prevention, detection, investigation and sanction of ML/TF in the country (members or not of CONTRALAFT) in all stages of its elaboration.
  The stages through which the National Plan has been elaborated have been the following:
  STAGE I: CONSTITUTION OF WORK GROUPS
  Configured as the main channel of participation, through 21 entities of the State, the contributions and debates that have led to the drafting

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