Argentina’s Unending Battle Against Money Laundering: A Country with No Convictions

By Daniel Santoro

The Persisting Challenge of Money Laundering in Argentina

Argentina’s battle against money laundering has been a long and arduous one, affecting its economy and justice system extensively. To date, Argentina holds a concerning title – no individual is currently serving jail time for money laundering, making it the only country in the world without a Money Laundering conviction ¹.

Suspicious Operations and the Lack of Convictions

From 2006 to the present, the Financial Information Unit (UIF) reported 837 suspicious operations (ROS) to the Money Laundering and Terrorism Financing Investigations Unit (UILDFTI), but only two were found to be money laundering cases under Article 278 of the Penal Code ¹. Five cases remain under preliminary investigation, with the rest being investigated for tax evasion ¹.

The Principal Source of Money Laundering: Tax Evasion

José Sbattella, the UIF’s president, identified tax evasion as the primary source of money laundering, with approximately $22.5 billion being lost annually through this means ¹. Half of that amount escapes abroad, resulting in a significant financial loss equivalent to Argentina’s foreign debt.

The Troubled Unit: UIF

The UIF, founded in 2001 to tackle the issue of money laundering, has faced substantial challenges ¹. Leadership changes, debilitating bureaucratic disputes with agencies such as the Central Bank and the General Tax Office, and insufficient cooperation from these organizations often left the UIF without vital information for effective investigations.

A Call for Change

During a 2010 Financial Action Task Force (FATF) review, concerns about Argentina’s lack of progress in combating money laundering emerged, with the potential of facing sanctions looming ¹. As a response, José Sbattella presented a bill to Congress declaring money laundering as an autonomous crime. The UIF imposed fines on banks for the first time and launched investigations into other illicit financial activities ¹.

Meagre Progress: The 8% Acceptance Rate

However, recent reports from the UILDFTI indicate only a 8 percent acceptance rate of the UIF’s ROS reports ¹. In defense, the unit’s head, Raúl Plee, argued that most ROS reports involved previous offenses rather than money laundering itself and called for changes to the Argentine Penal Code to treat money laundering as a separate crime ¹.

Urging a Cultural Shift

To prevent money laundering in the context of corruption, drug trafficking, and other illegal activities, experts suggest a culture shift among judges and prosecutors, encouraging them to follow the money trail and classify money laundering as a separate and key focus ¹.