GAFI - First Enhanced Follow Up Report and First Technical Compliance Re-Rating Report of Bolivia de 2025

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First Enhanced Follow Up Report and First Technical Compliance Re-Rating Report of Bolivia

January 20252

This Report was adopted by the L GAFILAT Plenary Meeting, held in Asunción, Paraguay, con December 13th, 2024.

Citing reference:

GAFILAT (2025) – First Enhanced Follow Up Report and First Technical Compliance ReRating Report of Bolivia.

© 2025 GAFILAT. All rights reserved. No reproduction or translation of this publication may be made without prior written permission. Applications for such permission, for all or part of this publication, should be made to the GAFILAT Secretariat at the following address: Avenida del Libertador 218, 10th floor - - C1001ABP - Buenos Aires – Telephone (+54-11) 5252-9292; e-mail: contacto@gafilat.org.

Cover photo: Salar de UyuniFirst Enhanced Follow Up Report and First Technical Compliance Re-Rating Report of Bolivia

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BOLIVIA: ENHANCED FOLLOW UP REPORT – RE-RATING REPORT

I. INTRODUCTION

1. In accordance with GAFILAT’s Fourth Round procedures, Bolivia’s Mutual Evaluation Report (MER) was adopted in December 2023. This follow-up report analyses the progress made by Bolivia in addressing the technical compliance deficiencies identified in its MER. New ratings are granted when sufficient progress is observed. Overall, the expectation is that countries have addressed most, if not all, technical compliance deficiencies before the end of the third year since the adoption of their MER. This report does not address Bolivia’s progress in improving its effectiveness. Based on the above procedures, this report concludes the enhanced follow -up of Bolivia for the fourth round.

II. FINDINGS OF THE MUTUAL EVALUATION REPORT

the adoption of their MER. This report does not address Bolivia’s progress in improving its effectiveness. Based on the above procedures, this report concludes the enhanced follow -up of Bolivia for the fourth round.

II. FINDINGS OF THE MUTUAL EVALUATION REPORT

2. In relation to Technical Compliance, the MER and subsequent re -qualifications indicate

that Bolivia was rated as follows:

Table 1. Technical Compliance Ratings, December 2023

R.1 R.2 R.3 R.4 R.5 R.6 R.7 R.8 R.9 R.10

LC C LC C LC PC PC PC C LC

R.11 R.12 R.13 R.14 R.15 R.16 R.17 R.18 R.19 R.20

C C PC C PC LC C LC LC LC

R.21 R.22 R.23 R.24 R.25 R.26 R.27 R.28 R.29 R.30

PC PC PC PC C LC C PC C C

R.31 R.32 R.33 R.34 R.35 R.36 R.37 R.38 R.39 R.40

PC LC C LC PC LC LC LC LC LC

Note: There are four possible levels of technical compliance: Compliant (C), Largely Compliant (LC), Partially Compliant (PC) and Non-Compliant (NC).

Sources: i ) Mutual Evaluation Report of Bolivia: https://biblioteca.gafilat.org/wpcontent/uploads/2024/07/IEM-Bolivia.pdf

3. Considering the results reflected in the MER, GAFILAT placed Bolivia under the enhanced follow-up process.1 The re-rating request was submitted and was filed with necessary supporting documents within the terms provided for in the procedures.

4. Based on the above, and in accordance with current GAFILAT procedures, a group of evaluators from the GAFILAT Expert Group (GEG) pool was appointed to carry out the analysis

documents within the terms provided for in the procedures.

4. Based on the above, and in accordance with current GAFILAT procedures, a group of evaluators from the GAFILAT Expert Group (GEG) pool was appointed to carry out the analysis and prepare this report. The assessment was carried out by Ruth Aída Molina Rendón

(Professional I of the International and Interinstitutional Relations Area of the Technical, Analytical and International Department of the Special Verification Intendancy of Guatemala), María Silvia Suárez (Inspection Lawyer in the Inspection Management of the National Institute of Associations and Social Economy of Argentina) and Enzo Paolo Paredes Castañeda (Liaison and Cooperation

1 The regular follow-up is the default monitoring mechanism for all countries. The enhanced follow-up process is based on the FATF traditional policy that approaches members with significant (technical compliance or effectiveness) deficiencies in their AML/CFT systems, and it involves a more intensive monitoring process.First Enhanced Follow Up Report and First Technical Compliance Re-Rating Report of Bolivia

2 Coordinator of the Prevention, Liaison and Cooperation Department of the FIU, Superintendency of Banking, Insurance and PFM of Peru). The process was conducted under the coordination and support of Juan Cruz Ponce, Deputy Executive Secretary of GAFILAT , Guillermo Hernández, Technical Expert of the GAFILAT Executive Secretariat , and Mónica Ayala De Paz, seconde d expert (from El Salvador) to the GAFILAT Secretariat.

5. Section III of this report summarises the progress made by Bolivia in improving technical compliance with Recommendations 6, 13, 22, 23, 24 and 28, which are the subject of this re-rating report. Section IV presents the conclusion and a table showing which Recommendations were rerated.

III. OVERVIEW OF THE PROGRESS MADE TO IMPROVE TECHNICAL COMPLIANCE

6. This section summarises Bolivia’s progress in improving its technical compliance by addressing the technical compliance deficiencies identified in the MER.

rated.

III. OVERVIEW OF THE PROGRESS MADE TO IMPROVE TECHNICAL COMPLIANCE

6. This section summarises Bolivia’s progress in improving its technical compliance by addressing the technical compliance deficiencies identified in the MER.

3.1. Progress in addressing technical compliance deficiencies identified in the MER

7. Bolivia has made progress in addressing its technical compliance deficiencies identified in the MER in relation to the following Recommendations: • Recommendation 6, currently rated PC; an upgrade to LC is proposed; • Recommendation 13, currently rated PC; an upgrade to LC is proposed; • Recommendation 22, currently rated PC, an upgrade to C is proposed; • Recommendation 23, currently rated PC; an upgrade to LC is proposed; • Recommendation 24, currently rated PC; keeping the PC rating is proposed, and; • Recommendation 28, currently rated PC, an upgrade to C is proposed.

Recommendation 6 – Targeted financial sanctions related to terrorism and terrorist financing (rated PC - Re-rated LC)

Criterion 6.1

1. Analysis:

8. The 2023 MER identified as a deficiency under this criterion that there was no specific legislation or regulation governing the mechanism for identifying and designating terrorists and terrorist groups under UNSCR 1267 and its successors, as well as UNSCR 1373.

a)

9. The Financial Investigations Unit (FIU) is the body responsible for regulating the ML/TF regime and for proposing designations to the UN Security Council under the regimes of UNSCR 1267/1989 and 1988 and their successors. The FIU's “Regulations on Procedur es for the Implementation of Measures Pursuant to UNSCR 1267 and its Successors and 1373”, approved by FIU Resolution 31/2024 on 4 July 2024 and in force since its publication, provide that the proposal for designation should be forwarded to the Ministry o f Foreign Affairs (MRE), together with the standard listing form, for transmission and diplomatic request to the relevant UNSCR committees.

by FIU Resolution 31/2024 on 4 July 2024 and in force since its publication, provide that the proposal for designation should be forwarded to the Ministry o f Foreign Affairs (MRE), together with the standard listing form, for transmission and diplomatic request to the relevant UNSCR committees.

10. According to art. 4 of Law 465, Law on the Foreign Relations Service of the Plurinational State of Bolivia, the MRE is the official and formal channel of communication of the Plurinational State of Bolivia and therefore has the authority to forward this de signation to the UN Security Council.First Enhanced Follow Up Report and First Technical Compliance Re-Rating Report of Bolivia

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b)

11. The country has enacted the FIU Regulations, articles 3, 4 and 7 of which provide for the establishment and operational mechanism of the Committee for Designation and Removal from Domestic and United Nations Security Council Lists (hereinafter CODELIN), formed within the FIU by the different directors of its departments, which by means of a technical report, shall recommend to the Executive Directorate General (DGE) of the FIU the designation in the national list and, where appropriate, the proposal for designation to the relevant UNSC Sanctions Committee, of persons or ent ities involved in the financing of, or otherwise supporting, acts or activities of Al-Qaida or the Taliban, and of any entity owned or controlled, directly or indirectly, by a designated person or entity. According to the measures taken by the country, the deficiencies in the MER are being addressed as the country has a mechanism in place to identify the recipients of terrorist and terrorist group designations under UNSCR 1267 and its successors.

c)

12. With the approval of the FIU Regulations, the powers of creation of CODELIN are established in accordance with art. 3, paragraph d.

13. Similarly, the FIU Regulations provide that CODELIN shall prepare a technical report and make an assessment of the elements on reasonable grounds or bases and recommend, by means

established in accordance with art. 3, paragraph d.

13. Similarly, the FIU Regulations provide that CODELIN shall prepare a technical report and make an assessment of the elements on reasonable grounds or bases and recommend, by means of a technical report, the designation of natural or legal persons, or entiti es to the domestic list.

Furthermore, on the basis of art. 8, if, as a result of the designation provided for in art. 6 (based on UNSCR 1373), links are found or the criteria for proposing the designation to the UN Security Council are met, the technical r eport based on reasonable grounds and bases shall also recommend the designation to the competent Sanctions Committees. The procedure does not indicate that the entity or person should be subject to criminal proceedings for the purposes of the designation. In view of the above, in line with the measures taken, the country has addressed the deficiencies in the MER.

d)

14. In accordance with the provisions of the second paragraph of art. 8 of the FIU Regulations, the administrative decision proposing the designation is sent to the MRE together with the standard listing form. In addition, the “Protocol for Inter -Agency Action for Compliance with the Measures Provided for by the United Nations Security Council Resolutions on Terrorism, Financing of Terrorism and the Financing of the Proliferation of Weapons of Mass Destruction” was signed in December 2002, which provides for the MRE to be informed when a freezing order is implemented, in order to inform the UN Security Council.

15. However, it was not possible to analyse the specific procedures to be followed by the MRE for the diplomatic transmission and request to the relevant UNSCR committees, as the specific regulations for this purpose were not yet in force at the time of writing this report, which is considered a minor deficiency.

e)

16. Art. 2 of the FIU Regulations specifies that the minimum information to be included in the Domestic List shall include at least the following: full name, alias, title or position, date and place

considered a minor deficiency.

e)

16. Art. 2 of the FIU Regulations specifies that the minimum information to be included in the Domestic List shall include at least the following: full name, alias, title or position, date and place of birth, nationality, identification number, address and date of appointment, as well as any other relevant additional data or information. Art. 8 indicates that the administrative resolution containing the designation proposal to be sent to the MRE shall include the appropriate form.First Enhanced Follow Up Report and First Technical Compliance Re-Rating Report of Bolivia

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17. However, it is not clear from the FIU Regulations that the administrative decision issued by the FIU and forwarded to the MRE for the designation proposal contains a statement of the case, nor is it clear what the criteria will be for determining whether the status of designating or proposing State can be reported to the 1267/1989 Committee. Finally, although the MRE has yet to regulate the procedures it will follow for the diplomatic transmission and request to the relevant UNSCR committees, this is not seen as an obstacle to the delivery of these designations.

1. Conclusion:

18. Bolivia has elements that allow it to meet most of this criterion, as the FIU is the authority with the power to make designations, has identification mechanisms, applies a ‘reasonable grounds or basis’ assessment, and provides the most relevant information. It is important to note that the specific procedures and mechanisms for notifying or proposing designations to the UN Security Council through the MRE had not yet entered into force at the time of the analysis, in addition to the fact that minor deficie ncies remain. However, most of the requirements of the criterion have been met by the country.

19. On the basis of the above, criterion 6.1 is mostly met.

Criterion 6.2

20. The 2023 MER noted that the country has no specific legislation or regulations governing the mechanism for identifying and designating persons and entities under UNSCR 1373.

1. Analysis:

Criterion 6.2

20. The 2023 MER noted that the country has no specific legislation or regulations governing the mechanism for identifying and designating persons and entities under UNSCR 1373.

1. Analysis:

a)

21. Based on the FIU Regulations and the powers of CODELIN, it will plan, search and process information received on persons or entities linked to TF or related offences, request and collect information from different institutions, analyse and evaluate communi cations from competent authorities, prepare the technical report on the basis of reasonable grounds or bases recommending designation on the domestic list, within the framework of the UNSCR, which includes the scope of application of Resolution 1373. Reque sts from other countries may be received by the MRE, which, on the basis of the powers provided for in art. 4 of Law 262 of July 2012, it will evaluate them without delay and forward them to the FIU and the examining magistrate in criminal matters on duty for their attention. The FIU orders the freezing within a maximum of one working day and notifies the REs by means of an administrative decision.

22. Therefore, these measures are considered to meet the requirement of the sub-criterion.

b)

23. Art. 5 of the FIU Regulations states that the criteria for designation include any natural person, legal person and/or entity that: (a) commits, attempts to commit, participates in or facilitates the commission of terrorist acts; (b) is owned or controlled , directly or indirectly, by a designated person or entity; and; (c) acts on behalf of or at the direction of a designated person or entity.

24. Whereas Art. 2, item b) and Art. 4 paragraph II of Law 262 empower the MRE to receive a country's request and forward it to the FIU, it does not provide the procedures or mechanisms toFirst Enhanced Follow Up Report and First Technical Compliance Re-Rating Report of Bolivia

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country's request and forward it to the FIU, it does not provide the procedures or mechanisms toFirst Enhanced Follow Up Report and First Technical Compliance Re-Rating Report of Bolivia

5 review and, if necessary, enforce actions initiated under Resolution 1373. As there is no specific mechanism in the MRE (MRE Regulations) for the receipt of the proposal and identification of the addressees of the designation, but taking into account the p rocedure for receipt, analysis and referral to the FIU established in the legal framework, the sub-criterion is mostly met.

c)

25. Art. 4, paragraph II of Law 262 empowers the MRE to receive a request from a country, immediately analyse it to ensure that it is covered by the legal principles of the country and forward it to the FIU, which has one working day to analyse it. Although it has not been pos sible to analyse the MRE Regulations, which detail the mechanism and procedure, it is considered that the provisions of the aforementioned article of Law 262, as well as the analysis ‘without delay’ and ‘within one working day’, in addition to the reception procedure developed in the Executive Instructions GM-Ins-23/2023 issued by the Maximum Executive Authority of the MRE, which meet the speed requirement of the criterion. On the basis of the above, the sub-criterion is met.

d)

26. To complete the analysis, reference is made to the analysis of sub -criterion c), since the procedure is carried out by the MRE, which receives the request and immediately verifies that it complies with the applicable legal principles based on international conventions and treaties (art. 4 II. a) Law 262). However, neither this provision nor the Performance Protocol as defined in the 2023 MER mentions the specific aspects to be analysed in order to accept the third country's application under the above sub-criterion.

27. However, art. 6 of the FIU Regulations establishes the procedure to be followed by CODELIN in order to analyse the proposal for designation to the domestic list and, if applicable,

2023 MER mentions the specific aspects to be analysed in order to accept the third country's application under the above sub-criterion.

27. However, art. 6 of the FIU Regulations establishes the procedure to be followed by CODELIN in order to analyse the proposal for designation to the domestic list and, if applicable, to the competent UNSC Sanctions Committee, for which purpose it prepares a technical report containing the identification profile. CODELIN will analyse the information received and decide, on the basis of reasonable grounds, whether the natural or legal person and/or entity is deemed to meet the criteria of the UNSCRs to be recommended for designation on the domestic list. With the adoption of these measures, the country is considered to have addressed the deficiencies originally identified.

e)

28. The FIU Regulations specify in art. 2 the information that can be included in the domestic list, which appears to be sufficiently complete, with the flexibility to include, as a last element, "other information considered relevant”; likewise, art. 6 of the same Regulations stipulates that the administrative decision shall be communicated, among others, to the MRE for transmission to the corresponding countries. However, there are no specific provisions in force indicating the procedure or mechanism to be followed through the MRE in order to request a third country to implement designations made on the basis of UNSCR 1373. Therefore, the sub-criterion is partly met.

1. Conclusion:

29. With regard to designations under UNSCR 1373, Bolivia has implemented elements necessary to comply with this criterion, such as empowering the FIU as the competent authority to propose designations under UNSCR 1373, identifying and proposing reasonable gro unds or bases, and providing information for the designation. These elements cover most of the requirements of the criterion. However, there is a lack of specific regulations or procedures governing the mechanisms for notifying the UN Security Council or countries that are requested to implement sanctions based on designations made by Bolivia , although this deficiency is of aFirst Enhanced Follow Up Report and First Technical Compliance Re-Rating Report of Bolivia

governing the mechanisms for notifying the UN Security Council or countries that are requested to implement sanctions based on designations made by Bolivia , although this deficiency is of aFirst Enhanced Follow Up Report and First Technical Compliance Re-Rating Report of Bolivia

6 minor nature given that the central and material requirements of the criterion were covered . Based on the above, the criterion is mostly met.

Criterion 6.3

30. The 2023 MER found that the country had no relevant regulations or mechanisms in place to identify and designate persons and entities that could meet the criteria for designation under the relevant UNSCRs.

1. Analysis:

a)

31. The country has demonstrated progress in this area by adopting the FIU Regulations through FIU Resolution 31/2024, which provides for the establishment of CODELIN, its structure and procedures. Among the functions set out in art. 3 of the Regulations, CODE LIN plans, searches, receives, processes, requests and collects information from various public and/or private institutions, which it analyses in order to draw up a technical report recommending the designation to the Executive Directorate General of the F IU for inclusion in the domestic list and, if appropriate, for designation to the Sanctions Committees of the UN Security Council.

b)

32. The FIU Regulations provide that CODELIN may act ex parte with respect to persons or entities it intends to designate for the purpose of collecting, requesting and analysing information.

Accordingly, the country is considered to be addressing the identified deficiencies.

1. Conclusion:

33. With the implementation of the FIU Regulations and the powers it gives to CODELIN to recommend designations to the domestic list, as well as its ability to act ex parte, it is considered that Bolivia has addressed the deficiencies in the MER and therefore meets criterion 6.3.

Criterion 6.4

1. Analysis:

34. FIU Resolution 25/2023 was amended by FIU Resolution 78/2023 to designate as REs all

that Bolivia has addressed the deficiencies in the MER and therefore meets criterion 6.3.

Criterion 6.4

1. Analysis:

34. FIU Resolution 25/2023 was amended by FIU Resolution 78/2023 to designate as REs all persons and entities engaged in designated non -financial businesses and professions (DNFBPs), thereby removing the limitation of “large taxpayers” that had been identified as a deficiency in the MER. Notaries are not included as they have a sector specific STR instruction and manual, as does the precious metals and stones sector, which was not previously included. This addresses the deficiencies in the original scope of the DNFBPs. For more information, see the discussion of Recommendations 22, 23 and 28 in this report. As a result, there is a regulatory system in the country that allows for the application of TFS without delay by financial institutions and DNFBPs.

35. With regard to virtual asset service providers (VASPs), as a result of the lifting of the ban on the use of virtual assets (VA) in the financial intermediation sector, as directed by Board Resolution 082/2024, VA and VASP -related transactions may be conduc ted. In this respect, it could not be confirmed that the VASPs had been included as REs in accordance with Recommendation 15 or that there were instructions to the VASPs to implement the TFS without delay. It is important to note that the financial system institutions apply the controls for theFirst Enhanced Follow Up Report and First Technical Compliance Re-Rating Report of Bolivia

7 implementation of TFS and that the materiality of the VA and VASP sector is relatively low, so the deficiency is considered minor.

1. Conclusion:

36. By including all DNFBPs in the standard, the country has made a significant effort to address the scope deficiencies identified in the criterion and the existence of a regulatory framework that allows the application of TF TFS by financial institutions and DNFBPs without

1. Conclusion:

36. By including all DNFBPs in the standard, the country has made a significant effort to address the scope deficiencies identified in the criterion and the existence of a regulatory framework that allows the application of TF TFS by financial institutions and DNFBPs without delay is highlighted. However, the removal of the restriction on VA and VASP, which have not yet been incorporated as reporting entities, transactions is another minor deficiency in scope, although this is mitigated by the low relative importance of the sector and the controls in the financial system, which does not allow full compliance with the criterion. On the basis of the above, criterion 6.4 is mostly met.

Criterion 6.5

37. According to the analysis carried out in the 2023 MER, the obligation to implement the TFS did not extend to all natural and legal persons in the country. In addition, the lack of scope in relation to REs also had an impact on the fulfilment of this criter ion, as it did not cover all categories of REs required by the standards.

1. Analysis:

a)

38. The country has taken steps to address the deficiency related to the previous lack of general prohibition required by this criterion. Art. 17 of the FIU Regulations states that the General Executive Directorate of the FIU shall issue a notice, published in a national mass media, announcing the links of the Domestic List and the Consolidated List of the UN Security Council, as well as the prohibition to perform any act, transaction or service with the designated natural or legal persons and/or entities, which in practice covers the required elements of TFS. According to the country, non-compliance with this prohibition could be subject to criminal sanctions, such as “disobedience to authority”, as provided for in art. 160 of the Criminal Code, as well as the offence of terrorist financing covered under Art. 133 Bis of the aforementioned Code.

39. However, at the time of the analysis, this communication, by means of which the general

“disobedience to authority”, as provided for in art. 160 of the Criminal Code, as well as the offence of terrorist financing covered under Art. 133 Bis of the aforementioned Code.

39. However, at the time of the analysis, this communication, by means of which the general prohibition referred to in art. 17 of the Regulations are disseminated, had not yet been issuedalthough it was issued after the cut-off date foreseen in the re-rating procedure-.2

40. As far as REs are concerned, FIU Resolution UIF/ 78/2023 addresses most of the scope deficiencies in relation to DNFBPs . With regard to notaries and dealers in precious metals and stones, they have specific instructions in their sectors, which also cover the requirements of the sub-criterion. Regarding the VASPs, Board Resolution 3082/2024 by the Central Bank of Bolivia ordered the lifting of the prohibition on the use of VASPs in the financial intermediation sector, whose entities apply controls for the implementation of TFS. However, the inclusion of VASPs as

2 The country provided the expert team with a copy of the first communication issued and published in the FIU website on October 2024, which included the links to the updates and reiterated that the prohibition on conducting operations or transactions with entities or persons on these lists should be observed by any natural or legal person. The communication was not analys ed as it was not issued within the time limit set by GAFILAT's monitoring procedures.First Enhanced Follow Up Report and First Technical Compliance Re-Rating Report of Bolivia

8 reporting entities under R.15 has not been identified. However, materiality is relatively low and the general prohibition largely mitigates this circumstance. Consequently, it is considered a minor deficiency. On the basis of the above, the sub-criterion is mostly met.

b)

41. As stated in the MER 2023, this sub-criterion is addressed in art. 3 of Law 262/2012 and

deficiency. On the basis of the above, the sub-criterion is mostly met.

b)

41. As stated in the MER 2023, this sub-criterion is addressed in art. 3 of Law 262/2012 and in arts. 7 and 8 of DS 4906/23. As these rules have not changed, the analysis in the MER is maintained.

c)

42. Art. 17 of the FIU Regulations states that the DGE of the FIU shall issue a notice, published in a national mass media, announcing the links of the Domestic List and the Consolidated List of the UN Security Council, as well as the prohibition to perform any act, transaction or service with the natural or legal persons and/or entities in the lists. In addition, FIU Resolution UIF/78/2023 addresses most of the scope deficiencies related to non-financial REs.

43. However, art. 17 of the Regulations does not appear to cover entities owned or controlled, directly or indirectly, by designated persons or entities, or entities acting on behalf or at the direction of designated persons or entities, nor does it appear to cover the exemptions from licensing or authorisation under the relevant UNSCR.

d)

44. According to the MER, the requirement of the sub-criterion is considered met. The country reports that the legislation has not changed, so the analysis in the report remains valid.

e)

45. The country has made changes to the specific instructions for DNFBPs, including deleting the term “companies” and replacing it with “persons”, which should include both natural and legal persons. In addition, a paragraph II has been added, removing the limitation to large taxpayers. In addition, specific compliance regulations and instructions for dealers in precious stones and metals have been approved by FIU Resolution 29/2024.

46. It should be noted that there is an exception in paragraph III, which states that notaries are exempt from the requirement, due to the fact that they already have their own reporting

have been approved by FIU Resolution 29/2024.

46. It should be noted that there is an exception in paragraph III, which states that notaries are exempt from the requirement, due to the fact that they already have their own reporting instructions and manual. Given that this criterion covers FIs and DNFBPs, it covers the scope deficiencies identified in the MER.

f)

47. In terms of the MER, the requirement is considered to be met and therefore the assigned rating is maintained as these provisions remain in force.

1. Con