Argentina is no longer grey Money laundering watchdog praises Argentina for changes to its laws in recent years

Saturday, October 25, 2014

Argentina is no longer grey

Money laundering watchdog praises Argentina for changes to its laws in recent years

The Financial Action Task Force (FATF) removed the country yesterday from its so-called grey list, which means the country won’t be subject any longer to the FATF’s continuous monitoring process thanks to the “significant progress” made by the country in improving its legislation and procedures against money laundering and terrorism financing.

The change of status was decided unanimously at the plenary meeting of the FATF, an intergovernmental organization founded in 1989 on the initiative of the G7 and which is currently made up of thirty-four member jurisdictions and two regional organizations.

“The FATF congratulates Argentina for its significant progress made in addressing the deficiencies on anti-money laundering and combating the financing of terrorism deficiencies,” the FATF said yesterday. “The country will no longer be subject to the FATF’s monitoring process.”

Argentina has been part of the so-called gray list since 2010 and due to that status received inspections from the FATF every three months. Now it will be subject only to an annual review as are the other 49 countries that fulfill FATF’s regulations, working together with all of them to “strengthen” thei regimes to combat money laundering and terrorism financing.

“We were looking forward to this. It took us five years and a long fight to get here. Several legal changes were carried out and new laws were passed like the anti-terrorism law,” the head of the Financial Information Unit (UIF) José Sbatella said yesterday in Paris, where the summit was held. “Not paying taxes and hiding funds abroad is now harder thanks to the new rules.”

The new status comes after an inspection of FATF officials in early September, which is the normal last step before the monitoring process comes to an end.

Meetings were held at the time with judiciary representatives, heads of banks and insurance companies, UIF officials, among others, to evaluate the steps taken against money laundering and terrorist financing based on FATF recommendations.

“This is very relevant for Argentina since a negative resolution would have prejudiced financial transactions. It gives the country an international certification that its system against money laundering and terrorism financing fulfills all the requirements of FATF,” Justice and Human Rights Minister Julio Alak said. “It’s great news for the financial and economic system.”

A sanction that led to changes

Argentina received an inspection from FATF officials at the end of 2009, whom observed the country did not fulfill 49 of the 54 recommendations for combating money laundering and terrorism financing. The finding led to the FATF decision to include Argentina on its so-called gray list with other countries that were seen as having severe deficiencies pertaining to the implementation of the agency’s recommendations.

The change of status led to the Executive power changing UIF’s authorities and appointing Sbatella, who unveiled in 2011 a broad plan to improve the country’s oversight of these issues. The plan included a partial reform to the Penal Code. In the chapter titled “Crimes against the Economic and Financial Order,” the concept of individual money laundering was included and the crime was also grouped within other economic offences. The crime of financing a terrorist organization was also included as well as the concept of seizing assets in advance.

At the same time, the number of people forced to report suspicious operations increased and lawmakers also regulated the freezing of assets linked to terrorism. The UIF also started taking part in the judicial investigations as a plaintiff.

“We have implemented substantial changes to prevent and sanction money laundering and terrorist financing. Legal changes have been implemented and the UIF has been completely reformed, giving it tools and the necessary resources to fight against such crimes,” Alak said. “We have done all this respecting our legal tradition and human rights.”

New laws

Argentina sanctioned its new anti money laundering law in 2011 to adapt to the FATF’s recommendations. The law strengthened the role of the Financial Information Office by granting it 0.6 percent of the annual budget assigned to the Justice and Human Rights Ministry and authorized it to request information from public bodies. At the same time, it criminalized money laundering, which was previously classified as a crime of concealment.

Because of the approval of that law, the FATF decided at its 2011 summit not to sanction Argentina with regard to money laundering and “admitted the political commitment and the progress achieved by the country, especially the great advances it made in the regulations after the approval of the law to fight the money laundering.”

Congress also sanctioned the anti-terrorism law in 2007 which said those who took part of conspiracies with terrorism purposes could be punished with time in prison. Due to the widespread criticism, the law was modified in 2011 so that only national judges could apply it and it would not be able to be used in cases relating to human rights.

“This has been a state policy and involved the three powers of the government. The quick advances of Argentina can be explained by the commitment of the country to work to implement these changes,” Alak said. “The president implemented a drastic change and gave the UIF more tools and a budget.”

Herald staff with Télam