Financial Crime World

Enhancing Integrity in the Argentine Financial System

The Argentine Financial System (FSP) has been undergoing significant changes in recent years, with a focus on implementing regulations and laws aimed at preventing corruption and enhancing integrity. While progress has been made, there are still areas where FSPs can improve their compliance programs.

Adapting Foreign Laws to Local Circumstances

One critical aspect is the need for foreign ABC legislation to be adapted to local circumstances. While it’s understandable that firms may reference foreign laws, an ethics code specific to one company is unlikely to be effective for another within the same group. A complementary ethics code should be adopted in each company to ensure coherency and effectiveness.

Key Considerations

  • An ethics code should be tailored to the needs of each company
  • Adaptation of foreign laws to local circumstances is essential
  • Coherency and effectiveness are critical for a compliance program

Despite being a crucial aspect of financial business, interactions with the public sector are often neglected. State clients, such as state-owned companies, may not be perceived as such, and general compliance rules and controls may not be sufficient.

Recommendations

  • A record should be made of every meeting and interaction
  • Informal communications should be avoided
  • Compliance rules and controls must be tailored to public sector interactions

Training and Culture

Creating a culture of integrity within FSPs requires training for members of the FSP and third parties. Training should be adapted to their needs, characteristics, and the company’s operational capacity.

Key Considerations

  • ABC measures differ from AML measures
  • Training should address local legislation and circumstances
  • Adaptation to needs, characteristics, and operational capacity is essential

Third-Party Due Diligence

FSPs must prioritize periodic risk assessments to ensure the adequacy of their programs, especially considering the evolving nature of financial business.

Recommendations

  • Evidence the integrity and trajectory of third parties
  • Business associates and intermediaries should be vetted prior to contact
  • Periodic risk assessments are crucial for maintaining program effectiveness

Tone from the Top

High-level management commitment is vital, as per the Corporate Criminal Liability Act and Guidelines. Clear, written records of interactions between FSPs and public officers should be kept, and if not possible, such interactions should be avoided.

Key Considerations

  • Visible and unequivocal high-level management commitment is essential
  • Written records of interactions with public officers are necessary
  • Avoidance of informal communications is recommended