UIF: New Regulations on Supervision of Exchange and Financial Entities

The Financial Information Unit (the “UIF” after its acronym in Spanish) issued Resolution No. 97/2018 (the “Resolution”), approving the new consolidated text of the regulation of the Argentine Central Bank’s (the “BCRA” after its acronym in Spanish) duty of collaboration with the UIF for supervisory proceedings over foreign exchange and financial institutions.
 

The new consolidated text (the “Text”), which entered into force on August 9, 2018, abrogates all prior obligations pertaining to the BCRA’s obligation established in UIF Resolution No. 104/2010 (as amended) and sets forth the specific duties of the BCRA.
 

The Text establishes the framework for the implementation of a supervisory system in Anti-Money Laundering and Terrorism Financing (“AML/TF”) of foreign exchange and financial institutions included in Sections 20(1) and (2) of Law No. 25,246, as amended, on the basis of a risk-based approach in line with the Financial Action Task Force (“FATF”) and in accordance with the new parameters established by UIF Resolution No. 30-E/2017.
 

The Text establishes a Joint Task force consisting of public officers from both the BCRA and the UIF with the aim of coordinating the supervision and application of the regulations to foreign exchange and financial institutions.
 

Likewise, the Text requires BCRA to create: a (i) Risk Matrix for the supervision of financial institutions with the aim of establishing such institutions risk level; (ii) Supervisory Manual for inspectors to carry out inspections under certain standardized parameters; and (iii) Biannual Supervisory Plan for supervised institutions. All such documents will be subject to the prior approval of the UIF, which may introduce any amendments deemed necessary.
 

The Text also establishes that any supervisory proceeding contemplated in the Biannual Supervisory Plan, as well as those not contemplated therein but determined to be necessary, may be carried out by either the UIF and/or the BCRA, jointly or separately. Once each supervisory procedure is finalized, the BCRA will be required to perform a Final Technical Report based on evidence and arguments with details of the supervisory proceeding and the conclusions thereof, which may be the basis for the implementation of Corrective Actions – in those cases in which the UIF understands that any breaches detected are not significant or systemic and do not carry any risk of affecting or risking the AML/TF system – or a Regularization Plan – in those cases where breaches found are more serious.
 

Corrective Actions may consist, among others, of: (i) the issuance of specific compliance orders with immediate or deferred effect, with set terms for their implementation; (ii) requests for periodical reports in regards to the advance of measures implemented by the obliged subject; and (iii) calling the compliance officer or other officers of the obliged subject to meetings, as well as the internal managers in charge of compliance.
 

On the other hand, Regularization Plans will set forth actions aimed at the regularization of breaches found in supervisory proceedings which may give place to the initiation of summary proceedings, setting a term for their compliance. The correct fulfilment of the plan may give place to the dismissal of any potential proceedings or the reduction of applicable sanctions in any ongoing proceedings. On the contrary, any breaches to the Regularization Plan may give rise to the initiation of summary proceedings by the UIF.