New step forward against money laundering and financing of terrorism

During the year 2006 several resolutions were enacted by the Ministry of Foreign Relations, International Commerce and Cult and by the Ministry of Justice and Human Rights where the necessity to continue with the representation of our country in different international organizations regarding the fight against money laundering and financing of terrorism was remarked on.

Pursuant to such resolutions, the Ministry of Justice and Human Rights determined the creation of the National Coordination Representation (“NCR”) before the Financial Action Task Force (FATF-GAFI), South American Financial Action Task Force (SFATF) and the Inter American Commission against Drug Abuse of the Organization of American States (ICADA - OAS). (Resolution No 792/2006)

Thus empowered, the NCR was requested to elaborate a National Agenda project against money laundering and the financing of terrorism that should include strong and accurate action proposals in order to strengthen the prevention, reporting and investigation of these crimes.

As a consequence, different Government agencies were summoned to create a working agenda where the contents elaborated in the project abovementioned were discussed, and was finally approved by Decree No 1225/2007.

With this Decree, the Executive aims to strengthen a series of regulations and statutory advances such as Law No 25,246 (“Anti-Money Laundering Law”) and Law No 26,268 (“Anti Terrorist Illegal Associations and Financing of Terrorism Law”), accepting a strong commitment in the fight against money laundering and the financing of terrorism.

In this context, the “National Agenda for the Fight against Money Laundering and Financing of Terrorism” (“National Agenda”) establish 20 primary objectives in the fight against money laundering and financing of terrorism, being the most important ones:

i.      to promote amendments in the current Criminal Code for money laundering and the riddance of legal restrictions based on confidentiality issues that permits the exchange of information between the Central Bank and the Unit;

ii.      to promote the inclusion of trustees to the list of individuals required to report suspicious activities, and the creation of a national registry of assets given into trust that guarantees the transparency of the operations;

iii.     to create a data base in the Central Bank (with the advice of the World Bank) with all the information that financial and exchange entities must provide to the controlling agency;

iv.     to establish a systematic report where financial entities must notify all operations that exceed a money limit to the controlling organism;

v.      to regulate the activities of the Retirement and Pension Funds Managers (“AFJPs”) and promote the inclusion of such funds to the list of subjects compelled to report suspicious activities;

vi.     to promote the incorporation of mutual and cooperative associations to the list of individuals required to report suspicious activities;

vii.    to include additional requirements for the opening of accounts and enhance the request of identifying information of the account holder and the requirement to reverse all transferences that do not comply with the information required; and

viii.    to promote a legal framework for the regulation of money transfer services companies, as well as the regulation and supervision of such companies.

Ratifying the objectives proposed by the National Agenda, on September 19, 2007 the Senate, through the Commission of Internal Security and Narcotics, filed in Congress a Bill that procures or intends to classify the crime of money laundering as an “independent crime” (file 2868/07).

Taking into account the abovementioned, we may believe that in the next few months Decree No 1225/2007 will be regulated with new statutory improvements upon these issues.