Financial Crime World

Risk Management in Argentina’s Financial Services Industry: New Developments

Strengthening the Financial Services Industry

BUENOS AIRES, ARGENTINA - In a bid to strengthen its financial services industry, Argentina has introduced new measures aimed at improving risk management practices among financial institutions.

International Cooperation Agreements

Argentina has seen a surge in international cooperation agreements aimed at tackling corruption and money laundering. For instance:

  • In 2019, a prosecutor signed an agreement with Brazil’s Public Ministry to access evidence related to bribery allegations against Argentine public officials.
  • The Federal Revenue Agency and Financial Information Unit are part of international networks of cooperation, facilitating the exchange of information with foreign counterparts.

Integrity Programme Adequacy Standard

Adequate integrity programs are crucial for financial institutions to mitigate risks. According to Argentina’s Anti-Corruption Office:

  • An integrity program must be tailored to each company’s specific risks, needs, and characteristics.
  • The office has issued guidelines to help legal entities comply with the provisions of Sections 22 and 23 of Law 27401.

Guidelines on Integrity Programmes

The Guidelines emphasize the importance of:

  • Conducting a risk assessment prior to designing and implementing an integrity program.
  • Regularly assessing risks and updating programs accordingly.
  • Financial institutions should initially and regularly assess, balance, and reflect particular risks or lack thereof in their integrity program.

Additional Requirements for FSPs

Financial Services Providers (FSPs) must also comply with other federal laws aimed at tackling corruption, such as:

  • Law No. 27504, enacted on May 15, 2019, requiring financial institutions to facilitate political funding transparency by ensuring cash donations are made via the banking system.

Elements of an Effective Integrity Program

Both the Corporate Criminal Liability Act and the Guidelines mandate or recommend several elements that should be included in any integrity program:

  • Ethical code, policies, and procedures of integrity
  • Rules of integrity in public tender processes and other interactions with the public sector
  • Training and awareness programs

Conclusion

Argentina’s financial services industry is undergoing significant changes aimed at improving risk management practices. Financial institutions must comply with these new requirements to ensure their integrity programs are effective and adequate for their specific risks and needs.

Remember:

  • Conduct a thorough risk assessment before designing an integrity program.
  • Regularly update your program based on changing risks and circumstances.
  • Ensure all FSPs comply with additional federal laws aimed at tackling corruption.