Anti-Money Laundering: New Rules for the Exchange of Financial Information

In general terms, this new regime sets forth that the information submitted by a foreign counterpart to the Argentine Financial Intelligence Unit (“UIF”) must be treated confidentially, and used for the reason or purpose stated in the respective information request. Furthermore, in certain cases, the UIF may reject all or part of the information request received from a foreign counterpart.

The UIF is the authority in charge of the analysis, treatment and transmission of information, aimed at preventing money-laundering and terrorism financing crimes, and is a member of Egmont Group (http://www.egmontgroup.org/about).

On October 20, 2016, Regulation UIF No. 135/2016 (“Regulation 135/2016”) was published in the Official Gazette (abrogating Regulation UIF No. 194/2010). This new regulation is aimed at aligning local regulations with international guidelines.

Which are the changes introduced by Regulation 135/2016?

Firstly, the new rule defines “analogous foreign counterparts” including financial intelligence units from foreign jurisdictions, foreign public entities with which the UIF enters into agreements or MOUs, and such foreign public entities that are members of Egmont Group or GAFILAT.

Furthermore, Regulation 135/2016 provides for three regimes applicable to the exchange of information: (i) information requests sent by the UIF, (ii) information requests received by the UIF, and (iii) spontaneous information disclosures. Below we include a summary of each of these regimes:

Information requests sent by the UIF

Regulation 135/2016 addresses and extends the provisions of former Regulation UIF No. 194/2010, such as:

• Scope. The UIF may request information from analogous foreign counterparts, provided that such information is relevant for the UIF’s compliance with its functions and jurisdiction.
• Limitations for the use of information. Purpose. The information provided by an analogous foreign counterpart may be used only for the reason or purpose for which it was provided for. The UIF must clearly state such purpose or reason upon submitting a request of information.
• Express authorization to transmit information. The UIF must not transmit the information received from analogous foreign counterparts to a third party, except when prior express authorization has been granted by entity providing the information.
• Confidentiality. The information provided by an analogous foreign counterpart must be treated, analyzed and protected with similar secrecy and confidentiality as information provided by domestic sources.
• Safety. The information provided by an analogous foreign counterpart must be received, treated and transmitted safely, in compliance with rules and procedures in force.
• Request. An information request must include the following elements: description of facts; details of persons or goods involved; relationship with the jurisdiction of the requesting entity; and, if applicable, need for urgency.
• Feedback. If the requesting entity asks for feedback on the usefulness and quality of the information provided, the UIF must respond to such request, unless such information interferes with the normal development of the UIF’s functions or affects an open investigation. In such case, the UIF must inform such reasons to the requesting entity.
• Transmission of information for intelligence purposes. If an entity provides information to be shared with the Judiciary, Prosecutor’s Office or other authority, only for intelligence purposes, the UIF must not reveal the source of such information (and if convenient, prior to sharing the information, the UIF must request a written commitment from the authority, undertaking to use the information only for the purposes for which it was provided and to adopt measures to guarantee the appropriate protection of the information).
• Information requests on behalf of a judicial authority. In this case, the judicial authority must i provide to the UIF the elements set forth in the general regime (please see above under “Request”). The UIF shall indicate to the foreign counterpart that the request is made exclusively on behalf of a judicial authority, and that the information shall be used for the reason or purpose stated in respective information request. Once a response is received from the foreign counterpart, the UIF must transmit the same to the judicial authority.

Information requests received by the UIF

Former regulations did not provide for the proceedings to be followed by the UIF upon receiving an information request from a foreign counterpart. Regulation 135/2016 in particular, provides for the regime applicable to the rejection of information requests, the reasons for sharing information, and authorizations.

• Rejection. The UIF may reject all or part of an information request: if the request exceeds the UIF’s jurisdiction; if it is unreasonable or contrary to the public order; or demands the use of excessive UIF resources (in such case the UIF must demand the request to be revised). In addition, the UIF may reject the request if it considers that the requesting entity is not in a position to effectively protect the information’s confidentiality or integrity, or that it will use the information in an undue manner or the international cooperation of the requesting entity has recurrently been considered as inadequate.
• Reasons for sharing information. The UIF must share information only for intelligence purposes. Exceptionally, the UIF may authorize the use of information for evidentiary purposes or for its incorporation into judicial proceedings, provided reciprocity is met, and that: (i) there is an express request from the authority to such end; (ii) the request is consistent with the internal legal framework; and (iii) the authorization does not affect the regular operation of the UIF or an open investigation.
• Authorization to share information. The new rule sets forth in which cases the UIF may deny authorization to share information with authorities different from the requesting entity.

Spontaneous information disclosures

• Receipt of spontaneous information disclosures from analogous foreign counterparts. The regulation provides for the following principles: (i) use of information for the purposes it was requested for; (ii) need to request express authorization from the entity providing the information, for the transmission of information; and (iii) confidentiality.
• Spontaneous information disclosure by UIF. UIF may spontaneously share information if it considers that it is relevant for the prevention or investigation of transactions relating to money-laundering or terrorism financing in such jurisdiction, or in Argentina. The UIF may share information only for purposes of intelligence. Exceptionally, the UIF may authorize the use of information for evidentiary purposes or for its incorporation into judicial proceedings, provided reciprocity is met, and that (i) there is an express request from the authority to such end; (ii) the request is consistent with the internal legal framework; and (iii) the authorization does not affect the regular operation of the UIF or an open investigation.

Finally, the new regulation provides that the UIF must produce and maintain updated statistics on the information exchanges with analogous foreign counterparts.