Financial Crime World

Argentina Grapples with Anti-Money Laundering Challenges Amid Corruption Concerns

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Argentina faces significant challenges in its efforts to combat money laundering (AML) due to corruption and other illicit activities. The country has been plagued by issues related to narcotics trafficking, public corruption, and terrorist financing.

A Major Entry Point for Illegal Activities

The Tri-Border Area, shared with Brazil and Paraguay, is a major entry point for illegal activities including:

  • Trade-based money laundering
  • Counterfeiting
  • Drug trafficking

Argentina actively participates in international initiatives aimed at combating money laundering, being a member of the Financial Action Task Force (FATF) and the Grupo de Acción Financiera de Sudamérica (GAFISUD).

Anti-Money Laundering Law No. 25,246

The key provisions of this law include:

  • Amendments to the Penal Code, which criminalizes:
    • Assisting individuals in evading investigation
    • Hiding evidence
    • Receiving or concealing illegal funds
    • Failing to report crimes
    • Protecting criminals’ profits
  • Establishment of the Financial Information Unit (UIF) within the Ministry of Justice and Human Rights to receive and analyze reports of suspicious activities

Regulatory Framework for Financial Institutions

The law imposes a rigorous regulatory framework on financial institutions, requiring them to:

  • Identify customers
  • Maintain records of transactions
  • Report suspicious activities to the UIF
  • Adhere to confidentiality requirements when reporting

Financial organizations and businesses under the supervision of the Central Bank, Securities and Exchange Commission, and National Insurance Superintendence are legally obligated to comply with these regulations.

Reporting Suspicious Activities

Money laundering can only be committed by those who assist criminals in concealing the source of funds. Transactions exceeding 50,000 pesos (approximately USD 16,000) must be reported as suspicious activities.

The UIF has also issued several resolutions expanding the list of organizations required to report suspicious transactions, including:

  • Tax authorities
  • Customs
  • Banks
  • Currency exchange houses
  • Casinos
  • Securities dealers
  • Insurance companies
  • Postal money transmitters
  • Consultants
  • Public notaries
  • Businesses dealing in art, vintage items, and valuable gems

International Recognition

Argentina’s AML efforts have received international recognition, with the country being formally removed from FATF’s follow-up procedure to address deficiencies in its AML and CFT systems. The nation has made significant strides in strengthening its AML and counter-terrorist financing regimes, with key regulatory authorities including:

  • Financial Information Unit
  • Argentine Central Bank
  • BCRA-established AML/CTF Committee