Argentina Introduces Strict Know Your Customer Regulations for Financial Services

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Combating Money Laundering and Terrorist Financing

Argentina has introduced strict know your customer (KYC) regulations for financial services providers to combat money laundering and terrorist financing. The new guidelines require institutions to verify the identity, suitability, and risks involved with maintaining business relationships.

Key Requirements

• Obligated parties must comply with certain obligations regarding their clients, including:
  • Requiring clients to provide necessary information for verification
  • Verifying the legal sources of funds
  • Reporting any suspicious transactions or operations to the Unidad de Información Financiera (UIF)
• Financial institutions in Argentina are required to conduct a thorough KYC identification process, which involves gathering information on:
  • A client’s identity
  • Business activities
  • Financial situation

Third-Party Providers

While there is no legal restriction on outsourcing customer due diligence to third parties who are not obliged by law to meet anti-money laundering (AML) regulations, institutions must still take responsibility for any breach of AML provisions. The use of licensed or registered third-party providers is also not regulated in Argentina.

Implications for Financial Services Providers

The new regulations have far-reaching implications for financial services providers operating in Argentina. According to industry experts, the changes will require institutions to adapt their KYC procedures and implement robust risk management systems to ensure compliance with the new guidelines.

Relied Upon Third-Party Providers

Entities that can be relied upon as third-party providers to comply with AML regulations in Argentina include:

• Credit institutions
• Financial institutions
• Auditors
• External accountants
• Tax advisors
• Notaries
• Independent legal professionals
• Trust or company service providers
• Estate agents
• Insurance companies