The Black Market Peso Exchange is one of the most used money laundering methods in the Western Hemisphere. It is a money laundering method in which money earned through illegal drug trafficking is exchanged for Peso. It slows the development of countries as authorities don't know how much money inflowed and outflowed from the country.
History of The BMPE
Colombian drug dealers use illegal drug trafficking to earn US dollars and Euros. They later exchange US dollars for Peso using Black Market Peso Exchange. After a while, the group that built the system left the market, but financial criminals kept using it to launder money.
The US government imposed the first regulations in 1970. However, McDonald, an agent from south Florida, stated that regulations didn't stop financial criminals from laundering money as banks are not strict with the regulations.
Regulations are now stricter than ever. As a result, it is estimated to lower the volume of laundered money through Black Market Peso Exchange.
What Are AML Regulations for the BMPE?
The US government addressed Black Market Peso Exchange using money laundering regulations and suspicious transaction reporting system in 1970. Regulations included reporting transactions involving more than $10,000 in cash, but most banks didn't take these regulations into account. The US government imposed more restrictions and pressured banks to comply with the regulations.
There are Anti-Money Laundering regulations in Colombia. But Colombian financial criminals and business people built a black market as they can save more money using Black Market Peso Exchange and avoid the tax system.
Strict regulations make it harder for criminals to sneak money into the banking system. Colombian financial criminals began using other methods to launder money as regulations are now harder to pass compared to the 70s.
Black Market Peso Exchange is one of the most successful money laundering methods ever designed. Therefore, governments and financial organizations around the world should take strong measures against it as money laundering slows the development of countries.