Risk Management in the Financial Services Industry in Argentina: New Paradigms and Changes Adopted
Strengthening Anti-Corruption Framework in Argentina
The Argentine government has taken significant steps to strengthen its anti-corruption framework, which affects the financial services sector (FSPs). The Corporate Criminal Liability Act (Law 27401) introduced a new paradigm that emphasizes prevention over punishment. This approach requires FSPs to implement effective integrity programs that align with their risks and needs.
Broadened Territorial Scope of Argentina’s Criminal Code
The Act broadened the territorial scope of Argentina’s criminal code, making it applicable to crimes committed by individuals or entities domiciled in Argentina, even if the action is committed abroad. This change aims to tackle corruption cases involving foreign officials, which are defined broadly as any person from another state designated to comply with a public function.
International Cooperation on Corruption Crimes
Argentina is part of several international agreements and treaties that facilitate cooperation on criminal matters, including those targeting corruption crimes. Law 24767 sets forth the principle of “wide and prompt” cooperation, requiring Argentine authorities to assist foreign authorities in judicial proceedings when reciprocity is offered or exists under a treaty.
Guidelines for Effective Integrity Programs
To ensure effective integrity programs, Argentina’s Anti-corruption Office established guidelines (Resolution 27/2018) that aim to provide technical guidance for companies, civil society organizations, and state agencies. The Guidelines highlight the importance of conducting a risk assessment prior to designing and implementing an integrity program, which should be tailored to each entity’s risks, needs, and characteristics.
Key Elements of Integrity Programs
The following elements are mandated by both the Corporate Criminal Liability Act and the Guidelines:
- An ethical code: A clear and concise document outlining the principles and values that guide the organization’s behavior.
- Integrity policies and procedures: Written guidelines that outline the steps to be taken in specific situations, such as reporting misconduct or conflicts of interest.
- Rules of integrity in public tender processes and interactions with the public sector: Procedures that ensure transparency and fairness in dealings with government agencies and other organizations.
- Training and awareness: Regular training and education programs to inform employees about the importance of integrity and the procedures for maintaining it.
Compliance with Anti-Corruption Laws
FSPs must comply with these guidelines and conduct regular assessments to reflect any particular risks or lack thereof in their integrity programs. In addition, FSPs should adhere to other federal laws that aim to tackle corruption, such as Law No. 27504, which requires companies making financial contributions to political campaigns to use the banking system.
In conclusion, FSPs must adapt to this new paradigm by implementing effective integrity programs that align with their risks and needs. This requires a thorough understanding of the anti-corruption framework in Argentina and compliance with relevant laws and guidelines.