What Changes Have Been Made to Financial Sector Reporting Entities?

On January 13, 2022, Argentina’s Financial Information Unit (“UIF,” after its acronym in Spanish) issued Resolution No. 6/2022 amending UIF Resolutions No. 30/2017, 21/2018 and 28/2018, aimed at reporting entities acting within the scope of the Argentine Central Bank, the Argentine Securities and Exchange Commission, and the Argentine Superintendence of Insurance.

Under the Resolution, documentation related to the tax situation of clients is now required in addition to that demonstrating their economic, equity and financial situation for developing their transactional profile.

This requirement had previously been eliminated by UIF Resolution No. 141/2016, which stated that neither international standards nor international best practices deemed taxing aspects as essential in customer due diligence in general, extending the same criteria to the determination of risk level and preparation of transactional profiles.

However, on this occasion, the UIF backtracked itself, arguing that the amendment increased the risk of money laundering and financing of terrorism because it enabled taxpayers to declare hidden assets that then entered the financial system through local financial institutions, posing a threat to them and to the financial system.

On December 27, 2021, the Federal Tax Authority lifted the prohibition for reporting entities in Article 20 of Law No. 25,246 to request a sworn statement of local taxes from their clients. Accordingly, the Resolution readjusted the criteria in UIF regulations and re-introduced the customer tax documentation requirement for the preparation of the transactional profile for financial institutions to better oversee business relationships so as to identify unusual or suspicious transactions or activities.