AML in Argentina
Argentina faces many of the same problems as the surrounding landscape, such as stemming the flow of illicit money from narcotics trafficking and public corruption. Corruption continues to constitute a significant danger to illegal funding, including proceeds generated domestically and sourcing from Venezuela. The Tri-Border Area (TBA), which Argentina occupies with Brazil and Paraguay, is one of the main entry points for multibillion-dollar TBML, counterfeiting, drug trafficking, and other crimes. Furthermore, many TBA's money laundering companies have known or suspected ties to Hizballah, which was charged as a terrorist group in a presidential decree published in 2019.
Argentina is a current member of the Financial Action Task Force (FATF) and the "Grupo de Acción Financiera de Sudamérica" (GAFISUD), a FATF-style regional body dedicated to incorporating the 40+9 Recommendations and agreeing among its members to undertake reciprocal evaluations of their anti-money laundering and counter-terrorist financing systems.
Anti-money laundering Law No. 25,246 is one of Argentina's essential AML/CFT laws.
AML Legislation And Regulations
In April of 2000, the Anti-Money Laundering Law No. 25,246 was implemented. Money laundering is defined in this legislation as intensifying an underlying crime after it has occurred. Its most important sections are as follows:
1. Amending the Penal Code and incorporating "Laundering of Proceeds of Crime" into Chapter XIII, thus penalizing anyone who:
a. Assists someone in avoiding authorities' investigations or evading the latter's action,
b. Assists the offender or participant in hiding, altering, or making trails, evidence, or instruments of the crime disappear by covering, changing, or making them disappear.
c. Obtains, receives or conceals proceeds of crime in the form of money, property, or effects
d. Fails to report a crime or fails to identify the offender or participant in a previously reported incident, when he would have been required to bring criminal proceedings,
e. Protects or assists the perpetrator or participant in securing the crime's product or profit.
2. Establishment of a functionally independent Financial Information Unit (UIF) within the Ministry of Justice and Human Rights of the Nation (Section 5) and
3. Establish a more stringent regulatory framework for the financial industry and a list of individuals and companies responsible for reporting suspicious activities to the Financial Information Unit (Section 20).
All financial organizations and businesses monitored by the Central Bank, the Securities and Exchange Commission (Comisión Nacional de Valores, CNV), and the National Insurance Superintendence (Superintendencia de Seguros de la Nación, SSN) are required by law to identify customers, keep records, and report suspicious activity. When reporting suspicious activities to the UIF, the law also imposes confidentiality obligations on institutions. If UIF wishes to pursue the case further, it should be forwarded to the Attorney General's Office.
It is also important to note that:
- A person who commits a crime cannot be punished separately for laundering proceeds from the offense.
- Money laundering can only be committed by someone who assists the criminal after the fact in concealing the source of the funds, and;
- Money laundering is a transaction (or a sequence of related transactions) that exceeds 50,000 pesos (about USD 16,000). Transactions under 50,000 pesos can only be considered concealment, a minor offense.
Since the anti-money laundering law was enacted, the UIF has issued several resolutions expanding the list of organizations obliged to file suspicious transactions, including the tax authority, Customs, banks, currency exchange houses, casinos, securities dealers, insurance firms, postal money transmitters, consultants, notaries public, and suppliers in art, vintage items, and valuable gems.
AML Regulators in Argentina
Argentina has made tremendous progress in tightening its anti-money laundering and counter-terrorist funding regimes in recent years. The government formed a National Committee for Combating Money Laundering and Terrorist Financing to regulate the country's money laundering and terrorist financing strategies, including establishing national risk assessments (NRAs) and a comprehensive crime-fighting plan.
Argentine Central Bank (BCRA)
Aside from the Financial Information Unit, the Argentine Central Bank (BCRA) is a prominent player in anti-money laundering and counter-terrorist financing issues. Following Law 25.246, it has taken substantial steps to strengthen its function as the financial sector's main supervisor and ensure that the banking system is adequately monitored for AML/CFT.
In this regard, the Board of Directors of the BCRA established the Comité de Control y Prevención de Lavado de Dinero y Financiamiento del Terrorismo (AML/CFT Committee), which is comprised of members of the board and is responsible for centralizing evaluations and critical objectives on this subject.
- The BCRA has regulated the commercial entities' AML and CFT duties in its dual function as the significant banking authority and as an entity required to report AML suspicious activity to the Financial Information Unit. Customers must be identified; records must be kept, suspicious transactions must be reported, internal policies and processes must be developed, and:
- An internal control mechanism to assure compliance;
- A special committee on anti-money laundering and counter-terrorist financing, comprised of at least two members of the board of directors;
- A senior-level individual (Compliance Officer) who is solely responsible for ensuring compliance;
- Testing by an independent party;
- Appropriate personnel development;
- Techniques for detecting high-risk accounts;
- Procedures are for determining expected levels of activity.
Argentina has officially been withdrawn from the Financial Action Task Force's (FATF) follow-up procedure, which began in 2004 to address weaknesses in the Argentinean government's anti-money laundering and counter-terrorist financing system. However, Argentina has developed the legal and regulatory capacity to combat and eliminate money laundering and terrorist financing.
