New Regulations against Money Laundering[1]

The Financial Information Unit (“FIU”) approved the Directive concerning the Regulation of Article 21 (a), (b) of Law No 25,246 (Suspicious Activities related to Capital Markets) with Resolution No 152/2008 published in the Official Gazette on May 2, 2008 (the “Resolution”).

During 2007, several rules on the regulation of Money Laundering and Financing of Terrorism were enacted. Among the most important ones were Decree No 290/2007 on Money Laundering; Decree No 1225/2007 on the National Agenda for the Fight against Money Laundering; UIF Resolutions Nº 2/2007 and No 228/2007 regarding Suspicious Activities and the Central Bank of Argentina Communication “A” 4750 on the prevention of the financing of terrorism.

The Resolution amended Exhibits I and II enacted by FIU Resolution No 3/2002 thereby increasing the level of control related to the financing of transactions under the capital markets regime.

Among the most important aspects of the Resolution is the increase in the list of entities that must control and report to the UIF suspicious activities, which now expressly includes:

i)            stock broker agents and companies;

ii)            manager companies of common investment funds;

iii)            MAE Agents;

iv)           Intermediates in the purchase, lease or loan of securities that are subject to the scope of stock exchanges; and

v)            intermediates inscribed in future and option markets.

With regard to the regulatory requirements on entities to report suspicious activities, the Resolution states that they shall consider particularly: (i) the inherent activity of the capital markets; (ii) the experience of the individual obliged to report suspicious activities and; (iii) the implementation of the “know your client” rule mentioned in our previous articles.

In addition, Exhibit II – Guide to Unusual or Suspicious Transactions related to Capital Markets - contains a guide on transactions that should be considered as suspicious activities and, therefore, reported to the FIU. Among such activities are: 

i)             The opening of accounts where clients do not want to provide their personal information or where clients provide insufficient, false or incorrect information.

ii)            Transactions for an amount that does not relate to normal market conditions (such as, for example, purchase/sale of securities with prices clearly higher/lower than their true value).

iii)            Investment transactions in securities for unusual amounts that do not correspond to the main activity or the financial situation of the client.

iv)           Transactions where the client does not appear to have the financial resources to carry out such a transaction, giving rise to the possibility that he is not operating on his own behalf but as an agent for an undisclosed principal.

v)            Requests by clients for services related to the administration of investments where the fund’s origins are unclear or are not consistent with the type of business or with the declared activity of the company.

vi)           Clients who make transactions and/or transfers to other accounts for no apparent reason.

vii)          Accounts that are frequently funded with funds derived from countries or territories considered as tax havens, or identified as countries not cooperating with the GAFI Rules against money laundering.

viii)          Accounts opened by corporations or organizations that use the same address as other companies or organizations, when the same individuals are authorized to manage such companies, when there is no economic or legal reason for such agreement (particular attention must be paid when the companies or organizations are located in tax havens and their corporate purpose is offshore activity).

Lastly, such Exhibit determines that particular attention must also be paid to officers or employees of the entities described above who demonstrate recent changes in their lifestyle or who do not want to take vacations and/or use their personal addresses to receive client documentation.