Anti-Money Laundering and Counter-Terrorism Financing Rules Enacted by the Public Registry of the City of Buenos Aires

On July 31, 2015, General Resolution IGJ N° 7/2015 (“Resolution 7/2015”) was published in the Official Gazette, approving the new restated text of the Public Registry of the City of Buenos Aires’ Rules, that will enter into force on November 2,. 2015.[1]

Pursuant to Section 20, paragraph 15 of Law 25,246, and Resolution FIU 29/2011, the Public Registry of the City of Buenos Aires (“IGJ”) is an informing agent (“sujeto obligado”) that must mandatorily report to the Financial Information Unit (“FIU”) about conducts or activities of individuals or legal entities that may imply an act or transaction suspicious of entailing money laundering or terrorism financing. For this reason, the IGJ has adopted the “Policies and Proceedings for the Prevention of Money Laundering and Terrorism Financing Manual”[2] (including a guide of unusual or suspicious transactions) and has previously enacted anti-money laundering resolutions applicable to entities subject to the IGJ’s supervision, and that have been incorporated to the recent Resolution 7/2015.[3]

The “Whereas” section of Resolution 7/2015, provides that the IGJ shall assist the Anti-Money Laundering and  Counter-Terrorism Financing system, by receiving and answering information requests from the Judiciary within the context of a criminal proceeding, or from the FIU upon investigations based on a suspicious transaction report of an informing agent, or an administrative proceeding.

In addition, the IGJ has established within its objectives, to guarantee the compliance with international standards concerning the “final beneficial owner” of legal entities and structures, Anti-Money Laundering and Counter-Terrorism Financing and access to registered information (Section 2, paragraph 6, Resolution 7/2015).

What are the main provisions on Anti-Money Laundering and Counter-Terrorism Financing incorporated by Resolution 7/2015 to the Public Registry of the City of Buenos Aires’ Rules?

Resolution 7/2015 includes “know your client” provisions concerning the entities subject to the IGJ’s supervision and the proceedings within its jurisdiction, such as: (i) annual sworn statement regarding compliance with anti-money laundering rules (in particular, as set forth below, this sworn statement shall not be required from companies that are reporting agents before the UIF, but that are under the Argentine Central Bank, the National Securities Commission (Comision Nacional de Valores), or the National Insurance Authorities (Superintendencia de Seguros de la Nación)’s surveillance); (ii) identification of final beneficial owner; (iii) verification of terrorist lists regarding members of administrative bodies; and (iv) statement on condition as Politically Exposed Person. In addition, it maintains the restrictive regime applicable to “off-shore” companies or companies from non-cooperative jurisdictions.

Annual Sworn Statement

The provisions regarding the assessment of compliance with anti-money rules are mainly included in Book X “Anti-Money Laundering and Counter-Terrorism Financing” (sections 509 to 518).

 Below, a brief summary of the same:

1. Section 510 includes definitions in order to construe the scope of the rules, in particular, jurisdictions “considered cooperative regarding tax transparency”; jurisdictions considered “non-cooperative in the fight against money laundering and terrorism financing”; “off-shore” companies; “off-shore” jurisdictions; “final beneficial owner”, “politically exposed person” and “terrorist lists issued by the UN Security Council”.

2. The following entities must annually present to the IGJ a sworn statement with a report on the status of compliance with resolutions enacted to prevent Money Laundering and Terrorism Financing crimes (pursuant to sample forms, included as Annexes):

1. Companies included in Section 299, Law 19,550, that are informing agents (sujetos obligados) that must mandatorily report to the FIU (and that are not under the Argentine Central Bank, the National Securities Commission (Comision Nacional de Valores), or the National Insurance Authorities (Superintendencia de Seguros de la Nación)’s surveillance), must file the sworn statement on an annual basis before the last business day of the month of February. 
2. Individuals or legal entities acting as trustees, managers or any party performing trustee functions, intermediaries, agents of those who market or sell securities in trust, depositary, registrar and/or payment agents of non-financial trusts, must file the sworn statement on an annual basis before the last business day of the month of January.  In addition, Resolution 7/2015 provides for the registration of trust agreements, subject to the terms and scope set forth by Sections 284 to 291.
3. Civil Associations participating in Argentine Football Association tournaments. Civil associations whose teams participate in “First Division” and “National First B” Football Tournaments organized by the Argentine Football Association must file the sworn statement on an annual basis before the last business day of the month of April.  
4. Companies that collect savings from the public, with the promise of future compensations, must file the sworn statement on an annual basis before the last business day of the month of May (this regime was previously set forth by Resolution IGJ 1/2012).
5. Foundations that receive donations or third party contributions for amounts exceeding fifty thousand pesos (AR$ 50,000) o the equivalent in kind (valued at market price) in a single act or several acts that overall exceed fifty thousand pesos (AR$ 50,000), performed by one or several related persons, during a period not exceeding thirty (30) days, must file the sworn statement on an annual basis before the last business day of the month of June (this regime was previously set forth by Resolution IGJ 4/2012).

3. Section 517 incorporates the filing of a sworn statement on the legality and origin of the funds applicable to civil associations and foundations (previously set forth by Resolution IGJ 2/2012) and specifically sets forth the supporting documents to be filed. This information regime must be complied with upon applying for the authorization to operate and with each filing of financial statements.

Identification of Final Beneficial Owner

Section 50, paragraph 2, sets forth the mandatory content of the professional opinion to be issued in connection with the acts subject to registration with the IGJ (opinions are issued by independent professionals, such as lawyers, notary publics or accountants). Professional opinions must identify the final beneficial owner (regarding proceedings relating to companies, registration of joint venture agreements or trusts).

For such purpose, professional opinions must include the first and last name, nationality, domicile, date of birth, Argentine ID number or passport, tax ID number (CUIT, CUIL or other tax ID code) and profession. In addition, the opinion must include the percentage of direct or indirect participation over the entity. Section 510 defines “final beneficial owner” as the “individuals that have at least twenty per cent (20%) of the capital or voting rights over a legal entity or that by other means they exercise the final direct or indirect control over a legal entity”.

Verification of Terrorists’ Lists

In the proceedings regarding the incorporation of companies, civil associations or foundations, the appointment of companies, civil associations or foundations’ authorities, the professional issuing the opinion must certify that the members of the administrative body are not included in the lists of terrorist and terrorist organizations issued by the UN Security Council.

Pursuant to Section 510, paragraph 8, the inquiry on terrorists’ lists may be made at the FIU’s web page: https://www.uif.gov.ar/uif/index.php/es/listado-de-terroristas.

Statement on condition as Politically Exposed Person

Pursuant to Section 511 (and related sections), Resolution 7/2015 provides for the opportunity and form of presentation of the sworn statement on the condition of Politically Exposed Person (as defined by Resolution FIU 11/2011 as amended), to be filed by managers, and members of surveillance bodies, as applicable (regime previously set forth by Resolution IGJ 16/2012). In addition, this new regime requires that trustees also file a statement on their condition as Politically Exposed Person.

“Off Shore” Companies or Companies from non-cooperative jurisdictions

Finally, Resolution 7/2015 maintains the restrictive regime applicable to “off-shore” companies and companies from countries, domains, jurisdictions, territories, associated states and special tax regimes, considered non-cooperative of tax transparency or non-cooperative with the fight against money laundering and terrorism financing (Sections 216, 217, 218, 239, 240 and other related sections).

[1] The new restated text of the Public Registry of the City of Buenos Aires’ Rules will enter into force on November 2, 2015, except for those rules that have expressly entered into force on August 3, 2015 (e.g., rules on registration of trust agreements, single shareholder corporations, civil associations and foundations).

[2] Resolution IGJ 6/2012.

[3] Resolutions IGJ 1/2012, 2/2012, 4/2012, 10/2012 and 16/2012.