Recent News on Anti-Money Laundering and Terrorism Financing Regulations

As we mentioned in our last edition (please refer to “Expansion of Powers and Assignment of New Functions to the Financial Information Unit”, Marval News #101 published on December 22, 2010), on October 22, 2010, the Financial Action Task Force (FATF) issued a report which stressed that Argentina had not complied satisfactorily with the recommendations issued by that agency in regard to the period 2004-2009. During their meetings earlier this month, FATF authorities recognized Argentina’s actions in order to adjust its AML and terrorism financing regulations to international standards, and decided to analyze Argentina’s status again in their next meeting to be held in Mexico this July. In the meantime, Argentina will be subject to a surveillance proceeding known as International Co-operation Review Group (ICRG) regarding its compliance with FATF recommendations.

Since the beginning of 2011, the Financial Information Unit (“UIF”) has already issued 22 Resolutions that set forth new regulatory demands to be observed by the different categories of entities obliged to report suspicious activities under Section 20 of Law 25,246 as amended (“Obliged Entities”). Through a press report, the UIF has stated that, considering the complexity and dynamics of the matter at hand, the update and amendment of existing regulations was necessary. In this way, Argentina aims to show its political commitment to FATF policies (i.e., concrete actions that comply with the highest international standards), and therefore avoid being included in FATF’s list of countries with a high risk profile.

Among the new regulations, we highlight the following Resolutions:

• Resolution No. 12/2011: within its supervisory and controlling powers pursuant to Laws No. 21,256 (as amended) and No. 18,924, the Central Bank shall collaborate as needed in the supervision of financial entities in regards to their compliance with AML and terrorism financing regulations. Consequently, sanctions are applicable in case of non-compliance with “know-your-client” (“KYC”) policies by the financial entities.

• Resolution No. 18/2011: a new concept of “client” is introduced with regard to individuals or legal entities that exploit gaming and gambling activities. Pursuant to the new text, all gamblers that trade chips or their equivalents used in table gaming and gambling for an amount above AR$25,000 are deemed as “clients”. For the other ways of gaming and gambling (e.g., slots), those gamblers that collect prizes or trade values for an amount above AR$10,000 are deemed as “clients”.

• Resolution No. 22/2011: sets forth the duty to work directly with the National Securities Commission (“Comisión Nacional de Valores”). Notwithstanding the systemic reports and the reports of suspicious transactions, the National Securities Commission must collaborate as needed in the supervision of entities in regards to their compliance with AML and terrorism financing regulations.

• Resolution No 25/2011: it provides additional measures applicable to liberal professionals whose activities are regulated by the Economic Sciences Professional Councils. In this case, it is established that when said professionals render external auditing or surveillance services, they shall mention in their legal opinions that AML and terrorism financing prevention proceedings have taken place.

• Resolution No. 27/2011: for the first time, an AML and terrorism financing prevention system is established for companies that issue travelers’ checks and/or credit card companies. For AML regulations´ purposes, credit card companies must consider as “client” both the main cardholder as well as any additional cardholders linked to the main cardholder’s account, as well as goods and services suppliers and stores.

• Resolution No. 29/2011: the Public Registries of Commerce and the Surveillance and Control of Legal Entities Representative Organisms must observe new AML and terrorism financing regulations. In addition to reporting all and any unusual transactions that they deem suspicious (based on a subjective standard), they must submit systemic reports to the UIF on digital support within the first 15 days of each month (or first business day thereafter), and keep records for at least 10 years.

• Resolution No. 30/2011: sets forth actions and proceedings to be observed by legal entities when receiving donations or contributions from third parties for amounts that exceed $50,000 within a 30-day period. If the involved amount exceeds AR$100,000, an affidavit stating the lawfulness and origin of the funds must be filed; and if the latter amount exceeds AR$200,000, additional supporting evidence must be provided.

• Resolution No. 33/2011: a AR$40.000 amount is fixed, as from which stock brokers/dealers must request to their clients an affidavit stating the lawfulness and origin of the funds and/or assets. If the amount involved in the transactions equal or exceed AR$200,000, additional supporting evidence must be requested.

• Resolution No. 38/2011: the Federal Tax Authority (“Administración Federal de Ingresos Públicos”), through its Tax, Customs and Social Security departments, must submit to the UIF all the data kept in records regarding importers, exporters, customs agents/dispatchers, as well as the data kept under the “Sistema Informático María” (or its replacement in the future).

• Resolution No. 39/2011: for the first time, the UIF regulated the obligations that exporters, importers, and customs agents/dispatchers must comply with in regards to AML and terrorism financing prevention. Despite the fact that Section 20(14) of Law No. 25,246 as amended had already established that the abovementioned are Obliged Entities, so far the UIF had not regulated the guidelines and instructions that these Obliged Entities had to comply with and implement, such as the appointing of a Compliance Officer, the drafting of a manual of proceedings, etc.

See also the articles: "Amendments to measures and procedures to be followed by the Argentine Superintendence of Insurance to prevent money laundering and financing of terrorism" and "Amendments to measures and procedure to be followed in the insurance industry to prevent money laundering and financing of terrorism" published in this Marval News.