Financial Crime World

Argentina Strengthens Anti-Money Laundering Regulations for Fintech Companies

Introduction

Argentina has taken significant steps to combat money laundering (AML) and counter-terrorist financing (CFT), with a focus on strengthening regulations for fintech companies. The country’s AML efforts have been shaped by international cooperation, key legislation, and the establishment of robust regulatory frameworks.

Challenges in Argentina

Argentina faces challenges related to money laundering, including issues such as narcotics trafficking and public corruption. Corruption remains a major concern, with both domestic and foreign sources funding illicit activities, including proceeds from Venezuela. The Tri-Border Area (TBA), shared by Argentina, Brazil, and Paraguay, is a significant entry point for various illicit activities.

Key AML Legislation

The cornerstone of Argentina’s AML efforts is Anti-Money Laundering Law No. 25,246, enacted in April 2000. This legislation defines money laundering as concealing or intensifying the proceeds of a crime after it has been committed. Key provisions include:

  • Amendments to the Penal Code: Money laundering is included in Chapter XIII of the Penal Code, making it a criminal offense to assist individuals in evading investigation or avoiding legal action.
  • Establishment of the Financial Information Unit (UIF): A functionally independent UIF was established within the Ministry of Justice and Human Rights of the Nation.
  • Stringent Regulatory Framework: The law imposes a rigorous regulatory framework on the financial industry, requiring individuals and entities to report suspicious activities to the UIF.

Fintech Companies Under Scrutiny

All financial institutions under the supervision of the Central Bank, the Securities and Exchange Commission (Comisión Nacional de Valores, CNV), and the National Insurance Superintendence (Superintendencia de Seguros de la Nación, SSN) are legally obligated to:

  • Identify customers: Fintech companies must identify their customers and maintain records of transactions.
  • Maintain records of transactions: Companies must keep accurate records of all financial transactions.
  • Report suspicious activities to the UIF: If a company suspects money laundering or other illicit activities, they are required to report these suspicions to the UIF.
  • Adhere to confidentiality requirements when reporting: When reporting suspicious activities, companies must maintain confidentiality.

Key Points to Note

  • Money laundering can only be committed by those who assist criminals after the fact in concealing the source of funds. This means that individuals or entities cannot commit money laundering if they are not assisting others in concealing their illicit activities.
  • A money laundering transaction or a sequence of related transactions must exceed 50,000 pesos (approximately USD 16,000). Transactions below this threshold are considered concealment, a lesser offense.

Argentina’s Progress and International Recognition

Argentina has made significant progress in strengthening its AML and CFT capabilities. The nation was formally removed from the FATF’s follow-up procedure, initiated in 2004, to address deficiencies in Argentina’s AML and CFT systems. This demonstrates the country’s commitment to combating money laundering and terrorism financing.