News in Anti- Money Laundering and Terrorist Financing Regulations

1.    Communication “A” 4895

Through Communication “A” 4895, the Argentine Central Bank (“Central Bank”) introduces amendments to Anti- Money Laundering regulations applicable to financial entities. Among others, the Central Bank modifies and provides a ninety day extension as from January 1, 2009 for the enforcement of Sections 1, 2, 3 and 8 of Communication “A” 4835 regarding politically exposed persons (“Peps”).

Under the new Communication, financial entities may require new customers to complete an affidavit stating whether they are deemed Peps, or gather information in order to identify each customer. Financial entities must mention in the corresponding manual whether they have chosen the implementation of the affidavit, indicating the guidelines implemented for the detection of Peps.  

The Communication also establishes that identification of Peps will not be necessary for occasional customers that perform transactions not exceeding the amount of A$ 30.000 per calendar month. 

The Communication establishes that the requirement of intervention by the Committee for Oversight and Prevention of Money Laundering will be satisfied with the knowledge of the agreement signed by the employer in the case of bank accounts where only salaries of Peps are deposited.  

The period given to the financial entities for the implementation of policies to identify Peps among their costumers is extended through January 1, 2011 (the original deadline was January 1, 2010). For this purpose, each financial entity must prepare a plan that should be approved by the Committee for Oversight and Prevention of Money Laundering.

2.    General Resolution No 547 of the Argentine Securities Commission

The Argentine Securities Commission (the “CNV”) modified Chapter XXII of its regulations about Money Laundering and Terrorist Financing Prevention in order to contemplate the amendments introduced in the Criminal Code in connection with illicit associations, terrorist financing, hiding and laundering of illicit origin and the latest UIF resolutions in the matter.

The following summarizes the most important changes introduced by General Resolution No 547:

a.    The amendment establishes that the opening and maintenance of costumers’ accounts should be performed according to CNV and Financial Information Unit (“UIF”) regulations, and performed through certain intermediaries (including underwriters and trustees).

b.    It also establishes that those subject to the obligation described in paragraph a. above must inform to the UIF, within thirty days as from the ending of each calendar year, the quantity of suspicious transactions reports filed with the UIF during the previous calendar year. Additionally, the mentioned subjects must accomplish with UIF and CNV regulations in connection with general guidelines, customer identification and information to be required, storage of documentation, requirements to be followed in the opportunity to report unusual transactions and procedures to prevent money laundering and terrorist financing.

c.    The General Resolution requires issuers to identify any individual or legal entity that makes material capital contributions or loans, whether they are a shareholder or not at the time, and must comply with the requirements set forth in paragraph a. above, specially regarding the identification of such persons and the origin and lawfulness of the funds disbursed under the contributions or loans.

d.    With respect to trusts, the General resolution provides that the identification and lawfulness and origin of the funds must include the trustees, trustors, arrangers, underwriters, beneficiaries and any other individual or legal entity that participates in any way, directly or indirectly, in the trust’s business.

e.    Regarding mutual funds, the identification and lawfulness and origin of the funds must include the fund manager, escrow and any other individual or legal entity that participates in any way, directly or indirectly, in the mutual fund business.

f.     The General Resolution that all and any subjects that hold a position or performs duties as enumerated in Section 5 of Law No 25,188 (Ethical Exercise of Public Office Law) must be subject to reinforced measures for client identification purposes. In order to identify Peps within the country and abroad, a list of useful websites is provided.