Amendments to Anti-Money Laundering and Terrorism Financing Regulations

Communique “A” 6399 (the “Communique”), enacted by the Argentine Central Bank (“BCRA” after its acronym in Spanish) abrogates item 1.3 of the regulations regarding “Anti-Money Laundering, Terrorism Financing and other illegal activities” which regulated the obligation of financial institutions and foreign exchange agencies to maintain certain databases, as of January 1, 2018.

The abrogated regulations established the obligation for financial institutions and foreign exchange agencies subject to the BCRA’s regulation to maintain databases regarding client operations. The prior regulations detailed the operations comprehended, the storage and safekeeping of the information, backups and applicable exclusions

However, the Communique clarifies that any and all information obtained as of December 31, 2017 must be stored by financial institutions and foreign exchange agencies for 10 years, as of the date in which such information was entered into the respective database.

It is worth mentioning that the Communique, in abrogating the described regulations, eliminates the duplication of BCRA regulations regarding anti-money laundering with Resolution 30-E/2017 issued by the Financial Information Unit.

In turn, Decree No. 27/2018 (the “Decree”) dated January 10, 2018 amended Law No. 25,246 (the “AML Law”) related to the requirements imposed upon obliged subjects (“Obliged Subjects”), the management of their clients information and the information required for KYC purposes.

The Decree now requires Obliged Subjects to refrain from revealing any investigations carried out in compliance with the AML Law to their clients and/or any third parties.

Moreover, it permits certain Obliged Subjects (amongst which financial institutions are included) to share their client files and the information relating to their identification, the origin and the legality of their funds, whether they are parts of the same corporate group or not.

The amendments to the AML incorporated a new definition of “clients” which is wider in scope than the previous one and includes individuals, entities, trust funds and/or trusts or other corporate structures, as well as those individuals acting on their behalf with which the Obliged Subjects establish, on an occasional or permanent basis, a contractual financial, economic or commercial relationship.

Furthermore, the obligations imposed upon Obliged Subjects regarding client identification have been amended to include, mainly: (i) client identification must be made on the basis of the regulations of the Financial Information Unit (“UIF”), on a risk based approach, (ii) the determination of the origin and legality of the funds, (iii) the requirement to maintain all the information collected, whether physically or digitally, for a 5-year term, and (iv) to report suspicious transactions or facts to the UIF in a unified 15-day term, as of the date on which the Obliged Subject concluded that the transaction was of such nature.

These amendments facilitate compliance of the requirements imposed upon the Obliged Subjects under the AML and continue the migration of the system towards a risk-based approach.