Financial Crime World

Argentina Tightens Grip on Money Laundering with New Regulations

In an effort to combat money laundering and terrorist financing, Argentina has introduced new regulations aimed at enhancing Anti-Money Laundering (AML) compliance. The Financial Information Unit (UIF) has issued guidelines requiring businesses to obtain additional information from clients, report suspicious transactions, and maintain detailed records.

Enhanced Due Diligence

As part of the AML process, businesses are now required to obtain evidence of a client’s address, documents demonstrating the origin of income, funds, and assets, minutes of decision-making bodies, and data resulting from enhanced screening against open sources. The UIF can request additional information deemed necessary for proper identification.

Cryptocurrency Operations Under Scrutiny

Cryptocurrency operations are considered high-risk activities, and businesses involved in such transactions must submit monthly reports to the UIF on all transactions. This increased scrutiny is aimed at preventing money laundering and terrorist financing through digital channels.

Red Flag Indicators

The Financial Action Task Force (FATF) has identified red flag indicators that can help financial services identify suspicious activities. These include:

  • Unusual transaction patterns
  • Irregular or uncommon transactions
  • Transactions linked to criminal activity

While these indicators do not necessarily prove involvement in money laundering or terrorist financing, they may warrant further monitoring and reporting.

Reporting Requirements

Regulated businesses must report suspicious transactions and maintain detailed records of all transactions. The UIF has issued guidelines outlining the specific requirements for reporting and record-keeping.

AML Compliance

Senior management within regulated companies is responsible for ensuring that AML-related policies and controls operate properly. Businesses failing to comply with AML regulations may face severe penalties, including fines and imprisonment.

Argentina’s Progress in AML Regulations

Over the past decade, Argentina has made significant strides in developing its AML regulations. The country has been praised by the FATF for its efforts to address deficiencies in its financial system, and its risk score has dropped from 6.74 in 2016 to 5.03 in 2021.

Law 25.246: A Key Milestone

Law 25.246, also known as the AML Law, was enacted in April 2000. The law provided detailed definitions of money laundering and auxiliary crimes, created the Financial Information Unit (UIF), and established a stricter regulatory framework for the financial sector.

Obligated Subjects

The list of businesses required to comply with Argentine AML regulations includes:

  • Financial institutions
  • Private pension fund managers
  • Exchange offices
  • Natural and legal persons engaged in games of chance
  • Stockbrokers
  • Insurance companies
  • Intermediaries registered with futures and options markets

As Argentina continues to strengthen its AML regulations, businesses operating within the country must ensure compliance to avoid severe penalties. The introduction of these new regulations is a significant step forward in combating money laundering and terrorist financing, and it is essential for businesses to adapt to these changes to maintain their reputation and stay compliant.