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Argentina     Money Laundering

Argentina     Money Laundering   

Congress Passes Law Reforming ML/FT National Prevention System

After 13 years without modifications, the first substantial amendment was unanimously approved.


Francisco Abeal - Juan Diehl Moreno - Andres O´Farell,  April 2, 2024

Marval - On March 14, 2024, Congress passed Law 27739, amending the current regulation on the prevention and punishing of Money Laundering (ML), Terrorist Financing (TF), and the Financing of Mass Destruction Weapons Proliferation (PF). The amendments were made in accordance with the Financial Action Task Force’s international standards, guides, and guidelines; the risks identified in the first National LA Risk Assessment; and the update of the National FT/FP Risk Assessment.

The reform focuses on five main aspects:

1. amendments to the Criminal Code
2. reform of Law 25246
3. creation of a Centralized Registry of Beneficial Owners
4. establishment of Parliamentary Control
5. creation of a Registry of Virtual Asset Service Providers.

These five aspects are considered essential for complying with the technical component under assessment of the FATF Fourth Round of AML/CFT Mutual Evaluations and the effectiveness of the international standards FATF set between March 6 to March 26, 2024.

First, regarding the amendments to the Criminal Code, the sum of the objective condition of punishability in article 303 was increased: it now amounts to 150 minimum wages. The article also incorporates in the definition of the crime in the first paragraph the verb "to acquire." Regarding the punishment for the attenuated crime, it replaces the time in prison for a monetary fine.

Article 306 incorporates "goods or other assets" to the definition of financing terrorism and establishes a new criminal offense that punishes the financing of mass destruction weapons proliferation.

Article 41 paragraph 5 incorporates as element to the definition of "terrorism" the criminal offenses established in the international conventions in force in Argentina.

Second, the reform of Law 25246 incorporates certain definitions within the scope of the law: "virtual assets," "risk-based approach," "virtual asset service providers," among others.

the Financial Intelligence Unit (UIF) is granted functional, administrative, and economic autonomy and autarchy –before the enactment of this law, it only had financial autonomy and autarchy—and its powers are extended, for example, to enter into agreements to exchange information with other national, provincial, and/or municipal public entities and/or authorities; and to analyze, process, and provide information to prevent and impede LA, FT, and FP-related crimes, incorporating crimes such as those carried out against public health and those affecting the environment, among others.

Further, the Law includes provisions of different resolutions the UIF issued during the last year regarding the possibility of applying corrective actions before the administrative proceedings, depending on the non-compliances and/or deficiencies detected. Likewise, it increases the amounts of fines that may be imposed in such administrative proceedings and incorporates the possibility of disqualifying the Compliance Officer as a sanction.

In addition, the list of reporting entities now includes virtual asset service providers (VASP); non-financial credit suppliers: centralize securities custody or entities registered to receive collective deposits of securities; lawyers; and trust, company service providers, issuers, operators and providers of collection and/or payment service providers. The Public Registry of Commerce (IGJ), entities receiving donations or contributions from third parties, among others, were removed from the list.

Finally, a new section has been included regarding non-profit organizations: although they will no longer be reporting entities, they must undergo an analysis of risks of abuse for the financing of terrorism, and must establish suitable and proportional measures to mitigate the risks identified.

Third, Law 27739 creates a Centralized Public Registry of Beneficial Owners under the control of the Argentine Tax Authority (AFIP). This Registry will gather adequate, accurate, and updated information of all active beneficiary owners in Argentina who are registered in a national registry. In this sense, the regulation establishes that such information must be provided within 60 days as from the effective date of the Law.

The Law also establishes there will be different levels of access for the different public entities and individuals requesting such information. There will be no tax secrecy regarding the information in the Registry and the access granted.

Fourth, regarding Congress action, the Law implements the control of the Congress through the Bicameral Commission on Control and Intelligence Activities Agencies, as a mechanism to be aware of the system of prevention, investigation, and criminal prosecution of ML, FT, and FP.

Fifth, The Law also creates the Registry of Virtual Asset Service Providers, under the scope of the Argentine Securities Commission (CNV). This Registry will gather adequate, accurate, and updated information on those individuals and legal entities that are PSAVs.

Finally, Decree 254/2024 was published in the Official Gazette—together with the new Law—on March 15, 2024, striking down any reference to the UIF as an agency depending from the Ministry of Economy, since—as from the amendment to the Law of Ministries—this agency is again under the scope of the Ministry of Justice.

The new Law becomes effective on March 23, 2024, according to article 5 of the Argentine Civil and Commercial Code.

marval.com

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