Bolivia Pledges Reforms to Combat Financial Crime

By PPO Abogados

In June 2025, the Financial Action Task Force (FATF) formally added Bolivia to its list of jurisdictions under increased monitoring, more commonly known as the "grey list." This designation means that Bolivia has committed to resolving strategic deficiencies in its systems for combating money laundering (AML), terrorist financing (CFT), and proliferation financing (PF), and will now be subject to enhanced international scrutiny.

According to the FATF, countries on the grey list are those that are “actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing.” Inclusion on this list indicates that Bolivia has publicly committed to swift and time-bound reforms and will now be monitored more closely to ensure compliance with global standards.

A High-Level Commitment

In conjunction with the announcement, Bolivia made a high-level political commitment to work closely with the FATF and its regional counterpart, GAFILAT (Grupo de Acción Financiera de Latinoamérica). These intergovernmental bodies are responsible for setting and promoting implementation of international standards to combat financial crime.

-FATF sets global AML/CFT/PF standards and monitors their implementation.

-GAFILAT operates in Latin America as a FATF-style regional body, providing peer evaluations and technical support.

This pledge by Bolivia’s leadership reflects a national effort to align more closely with international best practices and regain global confidence in its financial regulatory environment.

Background: Mutual Evaluation and Progress

Bolivia’s inclusion on the grey list follows the Mutual Evaluation Report (MER) conducted by GAFILAT in December 2023, which assessed the country’s AML/CFT framework. While the report identified a number of deficiencies, Bolivia has since taken significant steps to address them, including:

-Enhancing its understanding of money laundering (ML) and terrorist financing (TF) risks through improved data analysis and national risk assessments.

-Strengthening financial intelligence operations, including the production and dissemination of both strategic and operational intelligence through its Financial Intelligence Unit (FIU).

-Expanding its capacity to seize and forfeit criminal assets connected to illicit activity.

-Increasing the ability of law enforcement and judicial agencies to investigate TF-related offences.

-Improving mechanisms to enforce targeted financial sanctions related to terrorism and proliferation, in line with UN Security Council resolutions.

The FATF Action Plan: Next Steps

As part of its formal engagement with the FATF, Bolivia has agreed to an action plan that outlines priority areas for reform. These include:

1. Enabling the use of special investigative techniques (e.g., undercover operations, surveillance) in money laundering cases.

2. Applying risk-based supervision to Designated Non-Financial Businesses and Professions (DNFBPs), such as real estate agents, lawyers, accountants, and Dealers in Precious Metals and Stones (DPMS).

3. Ensuring the transparency of beneficial ownership, by maintaining accurate and up-to-date information on the individuals who ultimately control legal entities, and applying sanctions for non-compliance.

4. Increasing the number and quality of ML investigations and prosecutions, as a measure of effective implementation of the legal framework.