Financial Crime World

Argentina Faces Tough Challenges in Combating Financial Crimes

As President Javier Milei prepares to take office on December 10, Argentina is grappling with a myriad of problems, including high inflation, poverty, and entrenched organized crime. One of his most significant challenges will be combating financial crimes, which experts warn will be a long and difficult process.

The Pervasive Problem of Organized Crime

Argentina’s porous borders and international ports make it an attractive territory for transnational drug trafficking groups. Cocaine and marijuana produced in neighboring countries such as Bolivia and Paraguay are smuggled into Argentina, with a significant portion being exported to Europe and Australia.

  • Key Statistics:
    • 20 international ports
    • 2,500 kilometers of northern border
    • Significant portion of drugs is exported to Europe and Australia

Security analyst Diego Gorgal suggests focusing on departure points rather than trying to stop the drugs before they enter the country. “If you lower the probability of moving drugs through [Argentina’s] 20 international ports, you reduce the amount of drugs entering the country to be exported,” he said. “It’s much more effective to control 20 ports than 2,500 kilometers of northern border.”

Corruption: A Major Obstacle in Argentina’s Fight Against Organized Crime

Corruption is another significant obstacle in Argentina’s fight against organized crime. High-profile cases have implicated government officials at various levels, including former President Cristina Fernandez de Kirchner and her vice-president Armando Boudoud.

  • Notable Cases:
    • The Castedo Clan
    • Corrupt judge who gave them warnings about operations against them

Milei has vowed to tackle corruption in public works by privatizing elements of the sector, which he believes will reduce the amount of money passing through politicians’ hands. However, this will require significant reforms and coalition-building with other parties.

Money Laundering: A Major Concern in Argentina

Money laundering is also a major concern in Argentina, with 59% of money laundering sentences involving drug trafficking. The country lacks a centralized database for tracking evidence in money laundering investigations, making it difficult to tackle cases that span jurisdictions.

  • Key Statistics:
    • 59% of money laundering sentences involve drug trafficking
    • Lack of centralized database for tracking evidence

To combat these challenges, Milei will need to increase the country’s anti-money laundering capacity and strengthen laws such as Law 25.246, which established the Financial Information Unit (Unidad de Información Financiera – UIF). However, this will require significant reforms and political will, particularly given Milei’s limited legislative majority.

Conclusion

As Argentina faces these challenges, experts warn that combating financial crimes will be a long and difficult process. Milei’s success in tackling organized crime will depend on his ability to build coalitions, reform laws, and increase the country’s anti-money laundering capacity.