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FATF Statement re AML Strategic Deficiencies:
Date: 16 February 2012
In June 2011, Argentina made a high-level political commitment to
work with the FATF to address its strategic AML/CFT deficiencies.
Since then, Argentina has taken steps towards improving its
AML/CFT regime, including by enacting legislation that
significantly improves Argentina’s criminalisation of terrorist
financing; and issuing FIU Resolutions enhancing CDD measures
for the insurance, securities, and real estate sectors, and
cooperatives and mutual associations. However, the FATF has
determined that certain strategic AML/CFT deficiencies remain.
Argentina should continue to work on implementing its action plan
to address these deficiencies, including by: (1) addressing the
remaining deficiencies with regard to the criminalisation of money
laundering (Recommendation 1); (2) establishing and
implementing adequate procedures for the confiscation of funds
related to money laundering and identifying and freezing terrorist
assets (Recommendation 3 and Special Recommendation III); (3)
enhancing financial transparency (Recommendation 4); (4)
ensuring a fully operational and effectively functioning Financial
Intelligence Unit and improving suspicious transaction reporting
requirements (Recommendation 13, Special Recommendation IV
and Recommendation 26); (5) further enhancing the AML/CFT
supervisory programme for all financial sectors
(Recommendations 17, 23 and 29); (6) further improving and
broadening CDD measures (Recommendation 5); and (7)
establishing appropriate channels for international co-operation
and ensuring effective implementation (Recommendation 36,
Recommendation 40 and Special Recommendation V). The FATF
encourages Argentina to address its remaining deficiencies and
continue the process of implementing its action plan.
____________________________________________________
Sanctions:
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists
List comprises over eighty countries deemed low-tax jurisdictions.
Transactions between Argentine taxpayers and companies
formed or operated in those countries are not treated as having
been carried out under normal transfer pricing rules. The
Argentine blacklist is also relevant for tax payers subject to
worldwide income taxation in Argentina.
____________________________________________________
US State Department Money Laundering Report - 2012:
Argentine and international observers express the concern that
money laundering related to narcotics trafficking, corruption,
contraband, and tax evasion occurs throughout the financial
system. It is also believed that most money laundering operations
in Argentina are conducted through transactions involving specific
offshore centers. The most common money laundering operations
in the non-financial sector involve transactions made through
attorneys, accountants, corporate structures, and in the real
estate sector. The widespread use of cash in the economy also
leaves Argentina vulnerable to money laundering. Tax evasion is
the predicate crime in the majority of Argentine money laundering
investigations.
Argentina has a long history of capital flight and tax evasion, and
it is estimated that Argentines hold billions of dollars outside the
formal financial system, both offshore and in-country, much of it
legitimately earned money that was not taxed. The general
vulnerabilities in the system also expose Argentina to a risk of
terrorist financing. Despite these risks associated with money
laundering and terrorist financing (ML/TF), there have been only
two convictions for ML and only five prosecutions are ongoing.
Argentina is a source country for precursor chemicals and a
transit country for cocaine produced in Bolivia, Peru, and
Colombia, and for marijuana produced in Paraguay. While most of
the cocaine transiting Argentina is bound for the European
market, virtually all of the marijuana is for domestic or regional
consumption, and domestic drug consumption and production
have increased. Argentine officials also have identified smuggling,
corruption and different types of fraud as major sources of illegal
proceeds.
In addition to tax evasion and drugs, a substantial portion of illicit
revenue comes from black market peso exchanges or informal
value transfers. Informal value transfers occur when unregistered
importers, for example, use entities that move U.S. currency in
bulk to neighboring countries where it is deposited and wired to U.
S. accounts or to offshore destinations. Products from the U.S.
are often smuggled into Argentina, or the shipping manifests are
changed to disguise the importer and merchandise. The tri-border
area (Argentina, Paraguay and Brazil) is considered a major
source of smuggling, especially of pirated products. Through the
Three Plus One Initiative, the Government of Argentina (GOA)
authorities ostensibly cooperate with the two neighboring
countries, as well as with the United States, to address security
issues in this region; however, this mechanism has been largely
ineffective in recent years due to GOA and USG political
differences, among other reasons.
The Financial Action Task Force’s (FATF) third-round mutual
evaluation report of Argentina found Argentina partially compliant
or non-compliant with 46 of the 49 FATF Recommendations.
Argentina is subject to an enhanced follow-up procedure during
which Argentina is expected to immediately address deficiencies
relating to its criminalization of both money laundering and
terrorist financing. Argentina is also publicly identified by the FATF
for its strategic AML/CFT deficiencies, which Argentina has
developed an action plan to address. The FATF expects
Argentina to urgently address these deficiencies, and while some
progress has been made, significant AML/CFT deficiencies remain.
For additional information focusing on terrorist financing, please
refer to the Department of State’s Country Reports on Terrorism,
which can be found here: http://www.state.gov/j/ct/rls/crt/
DO Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: YES
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
KYC Covered entities: Banks, financial companies, credit unions,
tax authority, customs, currency exchange houses, casinos,
securities dealers, insurance companies, accountants, notaries
public, dealers in art and antiques, jewelers, real estate registries,
money remitters, and postal services
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 3,169 in 2010
Number of CTRs received and time frame: Not available
STR Covered entities: Banks, financial companies, credit unions,
tax authority, customs, currency exchange houses, casinos,
securities dealers, insurance companies, accountants, notaries
public, dealers in art and antiques, jewelers, real estate registries,
money remitters and postal services
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: Five (ongoing)
Convictions: Two - in December 2010 and June 2011
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdiction: YES
Argentina is a member of the Financial Action Task Force (FATF)
and the Financial Action Task Force against Money Laundering in
South America (GAFISUD), a FATF-style regional body. Its most
recent mutual evaluation can be found here: http://www.fatf-gafi.
org/dataoecd/3/60/46695047.pdf
Enforcement and implementation issues and comments:
On June 21, 2011, Argentina passed Law 26683, which amends
Law 25246, to modify the criminalization of ML as well as to
implement other AML/CFT measures. While the new law
addresses a number of important shortcomings, particularly with
respect to the criminalization of ML, a large number of other
previously identified deficiencies persist. Some of the key features
of the June 2011 law include: new measures criminalizing ML as a
stand-alone crime; provisions for confiscation of assets without
conviction for ML or TF; provisions to allow a judge to suspend an
arrest warrant or the seizure of instruments or effects, or
postpone the adoption of other restraining or evidentiary
measures in the context of a ML/TF investigation; broadening of
the predicate offenses which the FIU is authorized to handle and
disseminate; removing previous tax secrecy restrictions in the
framework of an STR; increasing the entities covered by
preventive measures, including mutual associations,
cooperatives, and the real state sector; incorporating more
detailed customer due diligence (CDD) and record keeping
measures; improving record-keeping measures with a
requirement that all CDD data be kept for at least five years and
properly recorded for reconstruction purposes; and incorporating
the FIU’s role (previously in Decree 1936/2010) to establish
supervision, control, and on-site inspection procedures to verify
compliance with the law, and guidelines and instructions issued
pursuant to the law.
Notwithstanding these improvements, technical deficiencies and
challenges still remain in closing legal and regulatory loopholes
and improving interagency cooperation. Most significantly, there is
a general lack of prosecutions and penalties actually imposed for
the offense of ML. Moreover, although financial regulators are
empowered to audit and conduct on-site inspections, there are
too few trained people with the expertise to carry them out
rigorously.
In 2007, Argentina passed Law 26268 which criminalizes terrorist
associations and the financing of these associations; however,
the law is not in accordance with international standards. In
October 2011, the executive branch presented a draft bill to the
Congress which aims to modify the existing law to meet
internationally accepted standards for countering the financing of
terrorism.
In November 2011, the GOA published resolution 388/2011
announcing the creation of a new Financial Intelligence Unit (FIU)
within AFIP, the government’s federal tax agency. The creation of
the FIU follows the implementation of a series of comprehensive
government measures to monitor and control the FX market and
stem capital flight. The new FIU’s objectives are to monitor foreign
currency transactions (FX) and to investigate infractions under
the government’s new foreign exchange restrictions. The
resolution also notes that the new FIU will monitor and investigate
the trading of stocks, bonds and other assets, as well as monitor
all types of bank credit and loan transactions. It is presumed AFIP’
s new FIU will focus primarily on investigating FX transactions in
order to reduce capital flight, which has been eroding Central
Bank reserves. The FIU also is tasked with investigating criminal
transactions related to money laundering and the financing of
terrorism (ML/FT), although it is unclear how the new FIU will
interface with the already existing Financial Intelligence Unit (UIF)
within the Ministry of Justice, which has traditionally been
responsible for probing financial crimes.
In 2009, FinCEN suspended information sharing with the UIF after
information given to the UIF was leaked to the local press. The
UIF and Argentine government are working to reestablish the
exchange of data.
To more fully meet international standards, Argentina’s continuing
priorities should be to address its systemic AML/CFT deficiencies,
including by: implementing the new ML offense and criminalizing
terrorist financing; establishing and implementing adequate
procedures for the confiscation of funds related to money
laundering, and identifying and freezing terrorist assets;
enhancing financial transparency; ensuring a fully operational and
effectively functioning FIU; improving and broadening CDD
measures for non-banking and non-foreign exchange sectors,
establishing appropriate channels for international co-operation;
the effective sanctioning of officials and institutions that fail to
comply with the requirements of the law; the pursuit of training
programs for all levels of the financial, criminal justice, and judicial
systems; and the provision of the necessary resources and
incentives to financial regulators and law enforcement authorities
to carry out their missions. There is also a need for increased
public awareness of the problem of money laundering and its
connection to narcotics, corruption, and terrorism.
For Full report, click here
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
While Argentina continues to be an important transit country for
Andean-produced cocaine, domestic cocaine production and
consumption are growing problems. Argentine officials believe
there is increased transit of cocaine through Argentina as a
consequence of intensive counternarcotics efforts in Mexico and
Colombia, forcing drug traffickers to utilize other routes to market.
Diminished drug interdiction capabilities in Bolivia also contribute
significantly. In June 2011, the Security Ministry asked the U.S.
Drug Enforcement Administration (DEA) to significantly curtail or
suspend most activities until further notice, pending an internal
review of international cooperation programs as well as the
development of new centralized coordination mechanisms.
Marijuana, the bulk of which is imported from Paraguay and used
for domestic consumption, continues to be the most widely
abused illegal drug in Argentina. However, the prevalence of
cocaine use has risen sharply and the country has the second
largest internal cocaine market in South America after Brazil.
Cocaine remains by far the leading drug for which Argentines
seek help at treatment centers, and the use of cocaine base,
known locally as “paco,” is a growing problem among
economically disadvantaged members of society.
Argentina is a party to the 1988 UN Drug Convention.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2)
Argentina is a source, transit, and destination country for men,
women, and children subjected to sex trafficking and forced labor.
Many sex trafficking victims from rural areas or northern provinces
are forced into prostitution in urban centers or wealthy provinces
in central and southern Argentina. The tri-border area with
Paraguay and Brazil is a significant source area for Argentine sex
trafficking victims, as well as a transit region for sex and labor
trafficking victims from Paraguay. A significant number of foreign
women and children, primarily from Paraguay, Bolivia, and Peru,
and to a more limited extent from Brazil and the Dominican
Republic, are subjected to sex trafficking in Argentina. Bolivians,
Paraguayans, and Peruvians, as well as Argentine citizens from
poorer northern provinces, are subjected to forced labor in
sweatshops, and on farms. Officials reported there could be some
labor trafficking victims exploited as street vendors or in forced
begging in the capital. During the reporting period, the Argentine
government identified a significant number of Argentine and
Bolivian labor trafficking victims in rural areas. Child sex tourism
occurs in the tri-border area and in Buenos Aires. Argentina is a
transit point for foreign women and girls trafficked into commercial
sexual exploitation in Chile, Brazil, Mexico, and Western Europe,
and some Argentine women and girls are found in forced
prostitution in Western Europe. Argentina’s long borders are
difficult to monitor, making the country a transit area for traffickers
and their victims.
The Government of Argentina does not fully comply with the
minimum standards for the elimination of trafficking; however, it is
making significant efforts to do so. During the past year, the
Government of Argentina identified a record number of trafficking
victims, including many victims of forced labor. It increased
prosecutions and convictions of trafficking offenders, and
supported several shelters for trafficking victims, some of which
opened during the reporting period. Nevertheless, the overall
number of convictions remains low in comparison to the number of
victims identified, specialized services remained uneven across
the country, and significant allegations of trafficking-related
complicity of government officials at the local and federal level
prevented more comprehensive anti-trafficking efforts.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: Argentina and the United States cooperated well in
analyzing possible terrorist threat information. Argentina
continued to focus on the challenges of policing its remote
northern and northeastern borders - including the Tri-Border Area
(TBA), where Argentina, Brazil, and Paraguay meet - against
threats including drug and human trafficking, contraband
smuggling, and other international crime.
2010 Terrorist Incidents: According to the Argentine Federal
Police, domestic anarchist groups conducted 12 improvised
explosive device attacks in Argentina in 2010, resulting in
property damage and the loss of one life. Nine of the incidents
took place in Buenos Aires Province, two in Rio Negro Province,
and one in Neuquen Province. Seven of the targets were banks,
two were airline offices, two were police facilities, and one was a
telecommunications company. As the explosions were small and
took place in the very early morning hours, casualties were limited
to one fatality and minor injuries to several individuals.
Legislation and Law Enforcement: The Argentine police have not
yet arrested any suspects in the 12 terrorist attacks. On
September 30, Argentina granted political asylum to Sergio
Apablaza Guerra, a former leader of the Chilean terrorist group
Manuel Rodriguez Patriotic Front, wanted by Chile in connection
with the 1991 murder of a Chilean senator and the 1991
kidnapping of the son of the owner of a prominent Chilean
newspaper.
The Argentine government continued to seek to bring to justice
those suspected of the July 18, 1994 terrorist bombing of the
Argentine-Jewish Mutual Association in Buenos Aires that killed
85 and injured more than 150 people. At the September UNGA,
Argentine President Cristina Fernandez de Kirchner proposed to
Iran that the Iranian suspects be tried in a third country. Iran
rejected the proposal via a September 28, 2010 note delivered to
the UN Secretary General.
Countering Terrorist Finance: The National Coordination Unit in
the Ministry of Justice and Human Rights manages the
government's anti-money laundering and counterterrorist finance
(AML/CTF) efforts and represents Argentina in the Financial
Action Task Force (FATF), the FATF Against Money Laundering in
South America (GAFISUD), and the OAS Group of Experts of the
Inter-American Commission for the Control of the Abuse of Drugs
(CICAD). The Government of Argentina underwent a FATF mutual
evaluation in November 2009, which was adopted by the FATF
plenary in October 2010. The assessment concluded that
Argentina had made virtually no progress toward addressing the
numerous serious deficiencies identified during the previous
assessment and that the legal and preventive AML/CTF measures
in place were either inadequate or not being enforced.
Among the many deficiencies noted in the FATF assessment was
that the money laundering statute was not effectively
implemented. The law provides the legal foundation for
Argentina's financial intelligence unit, the Central Bank, and other
regulatory and law enforcement bodies to investigate and
prosecute money laundering and terrorist finance. The Argentine
government and Central Bank claimed to be committed to freezing
assets of terrorist groups in Argentine financial institutions
identified by the UN; however, measures to freeze terrorist-
related funds rely mainly on ordinary criminal procedures, which
do not permit timely and effective enforcement in such cases.
Argentine authorities have dedicated limited resources to
monitoring terrorist financing taking place in the TBA.
Regional and International Cooperation: Argentina participated in
the OAS' Inter-American Committee Against Terrorism,
MERCOSUR's Special Forum on Terrorism, and the 3+1 Group on
Tri-Border Area Security with Paraguay, Brazil, and the United
States.
Date: 16 February 2012
In June 2011, Argentina made a high-level political commitment to
work with the FATF to address its strategic AML/CFT deficiencies.
Since then, Argentina has taken steps towards improving its
AML/CFT regime, including by enacting legislation that
significantly improves Argentina’s criminalisation of terrorist
financing; and issuing FIU Resolutions enhancing CDD measures
for the insurance, securities, and real estate sectors, and
cooperatives and mutual associations. However, the FATF has
determined that certain strategic AML/CFT deficiencies remain.
Argentina should continue to work on implementing its action plan
to address these deficiencies, including by: (1) addressing the
remaining deficiencies with regard to the criminalisation of money
laundering (Recommendation 1); (2) establishing and
implementing adequate procedures for the confiscation of funds
related to money laundering and identifying and freezing terrorist
assets (Recommendation 3 and Special Recommendation III); (3)
enhancing financial transparency (Recommendation 4); (4)
ensuring a fully operational and effectively functioning Financial
Intelligence Unit and improving suspicious transaction reporting
requirements (Recommendation 13, Special Recommendation IV
and Recommendation 26); (5) further enhancing the AML/CFT
supervisory programme for all financial sectors
(Recommendations 17, 23 and 29); (6) further improving and
broadening CDD measures (Recommendation 5); and (7)
establishing appropriate channels for international co-operation
and ensuring effective implementation (Recommendation 36,
Recommendation 40 and Special Recommendation V). The FATF
encourages Argentina to address its remaining deficiencies and
continue the process of implementing its action plan.
____________________________________________________
Sanctions:
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists
List comprises over eighty countries deemed low-tax jurisdictions.
Transactions between Argentine taxpayers and companies
formed or operated in those countries are not treated as having
been carried out under normal transfer pricing rules. The
Argentine blacklist is also relevant for tax payers subject to
worldwide income taxation in Argentina.
____________________________________________________
US State Department Money Laundering Report - 2012:
Argentine and international observers express the concern that
money laundering related to narcotics trafficking, corruption,
contraband, and tax evasion occurs throughout the financial
system. It is also believed that most money laundering operations
in Argentina are conducted through transactions involving specific
offshore centers. The most common money laundering operations
in the non-financial sector involve transactions made through
attorneys, accountants, corporate structures, and in the real
estate sector. The widespread use of cash in the economy also
leaves Argentina vulnerable to money laundering. Tax evasion is
the predicate crime in the majority of Argentine money laundering
investigations.
Argentina has a long history of capital flight and tax evasion, and
it is estimated that Argentines hold billions of dollars outside the
formal financial system, both offshore and in-country, much of it
legitimately earned money that was not taxed. The general
vulnerabilities in the system also expose Argentina to a risk of
terrorist financing. Despite these risks associated with money
laundering and terrorist financing (ML/TF), there have been only
two convictions for ML and only five prosecutions are ongoing.
Argentina is a source country for precursor chemicals and a
transit country for cocaine produced in Bolivia, Peru, and
Colombia, and for marijuana produced in Paraguay. While most of
the cocaine transiting Argentina is bound for the European
market, virtually all of the marijuana is for domestic or regional
consumption, and domestic drug consumption and production
have increased. Argentine officials also have identified smuggling,
corruption and different types of fraud as major sources of illegal
proceeds.
In addition to tax evasion and drugs, a substantial portion of illicit
revenue comes from black market peso exchanges or informal
value transfers. Informal value transfers occur when unregistered
importers, for example, use entities that move U.S. currency in
bulk to neighboring countries where it is deposited and wired to U.
S. accounts or to offshore destinations. Products from the U.S.
are often smuggled into Argentina, or the shipping manifests are
changed to disguise the importer and merchandise. The tri-border
area (Argentina, Paraguay and Brazil) is considered a major
source of smuggling, especially of pirated products. Through the
Three Plus One Initiative, the Government of Argentina (GOA)
authorities ostensibly cooperate with the two neighboring
countries, as well as with the United States, to address security
issues in this region; however, this mechanism has been largely
ineffective in recent years due to GOA and USG political
differences, among other reasons.
The Financial Action Task Force’s (FATF) third-round mutual
evaluation report of Argentina found Argentina partially compliant
or non-compliant with 46 of the 49 FATF Recommendations.
Argentina is subject to an enhanced follow-up procedure during
which Argentina is expected to immediately address deficiencies
relating to its criminalization of both money laundering and
terrorist financing. Argentina is also publicly identified by the FATF
for its strategic AML/CFT deficiencies, which Argentina has
developed an action plan to address. The FATF expects
Argentina to urgently address these deficiencies, and while some
progress has been made, significant AML/CFT deficiencies remain.
For additional information focusing on terrorist financing, please
refer to the Department of State’s Country Reports on Terrorism,
which can be found here: http://www.state.gov/j/ct/rls/crt/
DO Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: YES
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
KYC Covered entities: Banks, financial companies, credit unions,
tax authority, customs, currency exchange houses, casinos,
securities dealers, insurance companies, accountants, notaries
public, dealers in art and antiques, jewelers, real estate registries,
money remitters, and postal services
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 3,169 in 2010
Number of CTRs received and time frame: Not available
STR Covered entities: Banks, financial companies, credit unions,
tax authority, customs, currency exchange houses, casinos,
securities dealers, insurance companies, accountants, notaries
public, dealers in art and antiques, jewelers, real estate registries,
money remitters and postal services
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: Five (ongoing)
Convictions: Two - in December 2010 and June 2011
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdiction: YES
Argentina is a member of the Financial Action Task Force (FATF)
and the Financial Action Task Force against Money Laundering in
South America (GAFISUD), a FATF-style regional body. Its most
recent mutual evaluation can be found here: http://www.fatf-gafi.
org/dataoecd/3/60/46695047.pdf
Enforcement and implementation issues and comments:
On June 21, 2011, Argentina passed Law 26683, which amends
Law 25246, to modify the criminalization of ML as well as to
implement other AML/CFT measures. While the new law
addresses a number of important shortcomings, particularly with
respect to the criminalization of ML, a large number of other
previously identified deficiencies persist. Some of the key features
of the June 2011 law include: new measures criminalizing ML as a
stand-alone crime; provisions for confiscation of assets without
conviction for ML or TF; provisions to allow a judge to suspend an
arrest warrant or the seizure of instruments or effects, or
postpone the adoption of other restraining or evidentiary
measures in the context of a ML/TF investigation; broadening of
the predicate offenses which the FIU is authorized to handle and
disseminate; removing previous tax secrecy restrictions in the
framework of an STR; increasing the entities covered by
preventive measures, including mutual associations,
cooperatives, and the real state sector; incorporating more
detailed customer due diligence (CDD) and record keeping
measures; improving record-keeping measures with a
requirement that all CDD data be kept for at least five years and
properly recorded for reconstruction purposes; and incorporating
the FIU’s role (previously in Decree 1936/2010) to establish
supervision, control, and on-site inspection procedures to verify
compliance with the law, and guidelines and instructions issued
pursuant to the law.
Notwithstanding these improvements, technical deficiencies and
challenges still remain in closing legal and regulatory loopholes
and improving interagency cooperation. Most significantly, there is
a general lack of prosecutions and penalties actually imposed for
the offense of ML. Moreover, although financial regulators are
empowered to audit and conduct on-site inspections, there are
too few trained people with the expertise to carry them out
rigorously.
In 2007, Argentina passed Law 26268 which criminalizes terrorist
associations and the financing of these associations; however,
the law is not in accordance with international standards. In
October 2011, the executive branch presented a draft bill to the
Congress which aims to modify the existing law to meet
internationally accepted standards for countering the financing of
terrorism.
In November 2011, the GOA published resolution 388/2011
announcing the creation of a new Financial Intelligence Unit (FIU)
within AFIP, the government’s federal tax agency. The creation of
the FIU follows the implementation of a series of comprehensive
government measures to monitor and control the FX market and
stem capital flight. The new FIU’s objectives are to monitor foreign
currency transactions (FX) and to investigate infractions under
the government’s new foreign exchange restrictions. The
resolution also notes that the new FIU will monitor and investigate
the trading of stocks, bonds and other assets, as well as monitor
all types of bank credit and loan transactions. It is presumed AFIP’
s new FIU will focus primarily on investigating FX transactions in
order to reduce capital flight, which has been eroding Central
Bank reserves. The FIU also is tasked with investigating criminal
transactions related to money laundering and the financing of
terrorism (ML/FT), although it is unclear how the new FIU will
interface with the already existing Financial Intelligence Unit (UIF)
within the Ministry of Justice, which has traditionally been
responsible for probing financial crimes.
In 2009, FinCEN suspended information sharing with the UIF after
information given to the UIF was leaked to the local press. The
UIF and Argentine government are working to reestablish the
exchange of data.
To more fully meet international standards, Argentina’s continuing
priorities should be to address its systemic AML/CFT deficiencies,
including by: implementing the new ML offense and criminalizing
terrorist financing; establishing and implementing adequate
procedures for the confiscation of funds related to money
laundering, and identifying and freezing terrorist assets;
enhancing financial transparency; ensuring a fully operational and
effectively functioning FIU; improving and broadening CDD
measures for non-banking and non-foreign exchange sectors,
establishing appropriate channels for international co-operation;
the effective sanctioning of officials and institutions that fail to
comply with the requirements of the law; the pursuit of training
programs for all levels of the financial, criminal justice, and judicial
systems; and the provision of the necessary resources and
incentives to financial regulators and law enforcement authorities
to carry out their missions. There is also a need for increased
public awareness of the problem of money laundering and its
connection to narcotics, corruption, and terrorism.
For Full report, click here
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
While Argentina continues to be an important transit country for
Andean-produced cocaine, domestic cocaine production and
consumption are growing problems. Argentine officials believe
there is increased transit of cocaine through Argentina as a
consequence of intensive counternarcotics efforts in Mexico and
Colombia, forcing drug traffickers to utilize other routes to market.
Diminished drug interdiction capabilities in Bolivia also contribute
significantly. In June 2011, the Security Ministry asked the U.S.
Drug Enforcement Administration (DEA) to significantly curtail or
suspend most activities until further notice, pending an internal
review of international cooperation programs as well as the
development of new centralized coordination mechanisms.
Marijuana, the bulk of which is imported from Paraguay and used
for domestic consumption, continues to be the most widely
abused illegal drug in Argentina. However, the prevalence of
cocaine use has risen sharply and the country has the second
largest internal cocaine market in South America after Brazil.
Cocaine remains by far the leading drug for which Argentines
seek help at treatment centers, and the use of cocaine base,
known locally as “paco,” is a growing problem among
economically disadvantaged members of society.
Argentina is a party to the 1988 UN Drug Convention.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2)
Argentina is a source, transit, and destination country for men,
women, and children subjected to sex trafficking and forced labor.
Many sex trafficking victims from rural areas or northern provinces
are forced into prostitution in urban centers or wealthy provinces
in central and southern Argentina. The tri-border area with
Paraguay and Brazil is a significant source area for Argentine sex
trafficking victims, as well as a transit region for sex and labor
trafficking victims from Paraguay. A significant number of foreign
women and children, primarily from Paraguay, Bolivia, and Peru,
and to a more limited extent from Brazil and the Dominican
Republic, are subjected to sex trafficking in Argentina. Bolivians,
Paraguayans, and Peruvians, as well as Argentine citizens from
poorer northern provinces, are subjected to forced labor in
sweatshops, and on farms. Officials reported there could be some
labor trafficking victims exploited as street vendors or in forced
begging in the capital. During the reporting period, the Argentine
government identified a significant number of Argentine and
Bolivian labor trafficking victims in rural areas. Child sex tourism
occurs in the tri-border area and in Buenos Aires. Argentina is a
transit point for foreign women and girls trafficked into commercial
sexual exploitation in Chile, Brazil, Mexico, and Western Europe,
and some Argentine women and girls are found in forced
prostitution in Western Europe. Argentina’s long borders are
difficult to monitor, making the country a transit area for traffickers
and their victims.
The Government of Argentina does not fully comply with the
minimum standards for the elimination of trafficking; however, it is
making significant efforts to do so. During the past year, the
Government of Argentina identified a record number of trafficking
victims, including many victims of forced labor. It increased
prosecutions and convictions of trafficking offenders, and
supported several shelters for trafficking victims, some of which
opened during the reporting period. Nevertheless, the overall
number of convictions remains low in comparison to the number of
victims identified, specialized services remained uneven across
the country, and significant allegations of trafficking-related
complicity of government officials at the local and federal level
prevented more comprehensive anti-trafficking efforts.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: Argentina and the United States cooperated well in
analyzing possible terrorist threat information. Argentina
continued to focus on the challenges of policing its remote
northern and northeastern borders - including the Tri-Border Area
(TBA), where Argentina, Brazil, and Paraguay meet - against
threats including drug and human trafficking, contraband
smuggling, and other international crime.
2010 Terrorist Incidents: According to the Argentine Federal
Police, domestic anarchist groups conducted 12 improvised
explosive device attacks in Argentina in 2010, resulting in
property damage and the loss of one life. Nine of the incidents
took place in Buenos Aires Province, two in Rio Negro Province,
and one in Neuquen Province. Seven of the targets were banks,
two were airline offices, two were police facilities, and one was a
telecommunications company. As the explosions were small and
took place in the very early morning hours, casualties were limited
to one fatality and minor injuries to several individuals.
Legislation and Law Enforcement: The Argentine police have not
yet arrested any suspects in the 12 terrorist attacks. On
September 30, Argentina granted political asylum to Sergio
Apablaza Guerra, a former leader of the Chilean terrorist group
Manuel Rodriguez Patriotic Front, wanted by Chile in connection
with the 1991 murder of a Chilean senator and the 1991
kidnapping of the son of the owner of a prominent Chilean
newspaper.
The Argentine government continued to seek to bring to justice
those suspected of the July 18, 1994 terrorist bombing of the
Argentine-Jewish Mutual Association in Buenos Aires that killed
85 and injured more than 150 people. At the September UNGA,
Argentine President Cristina Fernandez de Kirchner proposed to
Iran that the Iranian suspects be tried in a third country. Iran
rejected the proposal via a September 28, 2010 note delivered to
the UN Secretary General.
Countering Terrorist Finance: The National Coordination Unit in
the Ministry of Justice and Human Rights manages the
government's anti-money laundering and counterterrorist finance
(AML/CTF) efforts and represents Argentina in the Financial
Action Task Force (FATF), the FATF Against Money Laundering in
South America (GAFISUD), and the OAS Group of Experts of the
Inter-American Commission for the Control of the Abuse of Drugs
(CICAD). The Government of Argentina underwent a FATF mutual
evaluation in November 2009, which was adopted by the FATF
plenary in October 2010. The assessment concluded that
Argentina had made virtually no progress toward addressing the
numerous serious deficiencies identified during the previous
assessment and that the legal and preventive AML/CTF measures
in place were either inadequate or not being enforced.
Among the many deficiencies noted in the FATF assessment was
that the money laundering statute was not effectively
implemented. The law provides the legal foundation for
Argentina's financial intelligence unit, the Central Bank, and other
regulatory and law enforcement bodies to investigate and
prosecute money laundering and terrorist finance. The Argentine
government and Central Bank claimed to be committed to freezing
assets of terrorist groups in Argentine financial institutions
identified by the UN; however, measures to freeze terrorist-
related funds rely mainly on ordinary criminal procedures, which
do not permit timely and effective enforcement in such cases.
Argentine authorities have dedicated limited resources to
monitoring terrorist financing taking place in the TBA.
Regional and International Cooperation: Argentina participated in
the OAS' Inter-American Committee Against Terrorism,
MERCOSUR's Special Forum on Terrorism, and the 3+1 Group on
Tri-Border Area Security with Paraguay, Brazil, and the United
States.
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*Please note that FATF deems that a country has significant aml deficiencies if any
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
|
| Further Tables |
| ARGENTINA |
| KnowYourCountry |
|
___________________________________________________
AML News / updates
August 8, 2011 - EU drops Argentina from list of due diligence
equivalent jurisdictions
Read Statement (pdf file)
March 3, 2011 - FATF maintains its serious concern regarding the large
number of significant AML/CFT deficiencies that remain
Read More....
November 3, 2010 - FATF has expressed its disappointment and
serious concern regarding Argentina's failure to implement an adequate
and effective AML / CFT system.
Read More .....
Links:
Unidad de Información Financiera (UIF)
Worldwide AML Legislation (International Bar Association)
|
Key Findings from last Mutual Evaluation Report
This was the FATF’s third mutual evaluation of Argentina (and second
joint FATF/GAFISUD evaluation of Argentina). Since the last
evaluation, finalised in June 2004, Argentina has not made adequate
progress in addressing a number of deficiencies identified at that time,
and the legal and preventive AML/CFT measures that are in place lack
effectiveness. This is complicated by a lack of adequate coordination,
overlapping jurisdictions of a number of domestic agencies, and varied
and inconsistent requirements vertically through the levels of applicable
regulatory texts for each financial sector and horizontally across the
various financial sectors.
Key recommendations made to Argentina include: address the
technical shortcomings in the ML and FT offences and more proactively
target ML and proceeds of crime investigations; enhance the framework
for freezing FT-related assets; enhance the FIU’s authority to process
cases regarding all predicate offences and all money laundering
activities; update financial sector laws to specifically provide for
AML/CFT supervision and sanction and enhance the ability to
cooperate internationally; more effectively supervise financial
institutions; harmonise and update CDD requirements for financial
institutions; extend AML/CFT requirements to financial institutions and
DNFBPs that are not covered and create an effective monitoring
framework for the latter; provide adequate resources for the all relevant
AML/CFT agencies, and provide more authority to Argentina’s National
Coordination Representation office to more effectively coordinate
AML/CFT policies.
This was the FATF’s third mutual evaluation of Argentina (and second
joint FATF/GAFISUD evaluation of Argentina). Since the last
evaluation, finalised in June 2004, Argentina has not made adequate
progress in addressing a number of deficiencies identified at that time,
and the legal and preventive AML/CFT measures that are in place lack
effectiveness. This is complicated by a lack of adequate coordination,
overlapping jurisdictions of a number of domestic agencies, and varied
and inconsistent requirements vertically through the levels of applicable
regulatory texts for each financial sector and horizontally across the
various financial sectors.
Key recommendations made to Argentina include: address the
technical shortcomings in the ML and FT offences and more proactively
target ML and proceeds of crime investigations; enhance the framework
for freezing FT-related assets; enhance the FIU’s authority to process
cases regarding all predicate offences and all money laundering
activities; update financial sector laws to specifically provide for
AML/CFT supervision and sanction and enhance the ability to
cooperate internationally; more effectively supervise financial
institutions; harmonise and update CDD requirements for financial
institutions; extend AML/CFT requirements to financial institutions and
DNFBPs that are not covered and create an effective monitoring
framework for the latter; provide adequate resources for the all relevant
AML/CFT agencies, and provide more authority to Argentina’s National
Coordination Representation office to more effectively coordinate
AML/CFT policies.
*Terrorist Safe Haven - Border area with Brazil/Paraguay
| Last Updated: 16 April 2012 |