Financial Crime World

Argentina’s Financial Sector Under Strain: Impact of Money Laundering on Economy

Challenges Faced by Argentina’s Financial Sector

  • Located in a region prone to drug trafficking and corruption, Argentina has been grappling with significant challenges.
  • The country’s financial sector is small compared to its jurisdiction, dominated by banks and the Sustainability Guarantee Fund (FGS), while non-bank financial institutions (NBFIs) play a lesser role.

Banking Sector Adapting to Emerging Shocks

  • The banking sector appears adaptable to emerging shocks
  • However, it faces challenges such as new regulatory obligations and uncertainty about measuring critical economic variables.
  • Recent programs required by the Banco Central de la República Argentina (BCRA) have put the banking sector under stress.

Struggling to Combat Money Laundering

  • Argentina’s law enforcement authorities are struggling to combat money laundering, with increasing numbers of cases affecting the justice system and economy.
  • Despite efforts to strengthen anti-money laundering (AML) regulations, the country remains vulnerable to money launderers and organized crime groups.

Regulators and Enforcement Bodies

  • The Financial Information Unit (UIF) is responsible for analyzing and preventing money laundering and terrorist financing in Argentina.
  • Businesses are obliged to determine and report suspicious activities and money laundering cases to the UIF, which has the power to request reports and freeze assets.
  • The Central Bank of the Republic of Argentina (BCRA) and the National Securities Commission (CNV) also have authority to enforce AML regulations.

Progress in Strengthening AML Framework

  • Despite challenges, Argentina has made significant progress in strengthening its AML framework, including developing a separate department for combating money laundering and terrorist financing.
  • Non-compliance with AML regulations can result in imprisonment of two to ten years and a fine of two to tens times the amount of the illicit transaction.

Benefits of Shufti Pro’s AML Screening Service

  • Determining customer identity in less than a second
  • Generating results with 98.76% accuracy
  • Screening customers against 1700+ global watch lists
  • Helping financial businesses stay compliant with regulatory obligations while reducing the risk of being sanctioned or experiencing hefty fines for being non-compliant.

Shufti Pro’s all-in-all AML screening service can help secure a business’ reputation and stay ahead of money launderers and organized crime groups.