Argentina's Robust Anti-Money Laundering Compliance - A Standout in Latin America
Argentina has been actively evolving its anti-money laundering (AML) regulatory framework over the past decade, aligning with international standards and addressing emerging challenges. This journey began with the enactment of Law 25.246, known as the AML Law, in 2000, which provided detailed definitions of money laundering and established a stricter regulatory framework for the financial sector.
In 2011, Law 26.683 was passed, amending the Argentine Criminal Code to provide AML a status of a separate crime and expanding the list of businesses that need to comply with AML legislations. The current AML regulations in Argentina are now more robust, with significant reforms aimed at strengthening oversight and enforcement.
The Financial Intelligence Unit (FIU), a governmental body in charge of the analysis, treatment, and transmission of information for preventing money laundering and terrorism financing, plays a central role in these efforts. Over the years, the FIU's functions have been expanded, and its powers have been strengthened, enabling improved access to financial, administrative, and law enforcement data for investigating complex money laundering schemes.
One of the key reforms in the mid-late 2010s was the expansion of AML regulations to new sectors. This included enhanced customer due diligence (CDD) measures requiring transparency on beneficial ownership and source of funds, especially for high-risk customers and sectors vulnerable to abuse. New sector-specific regulations were also introduced, such as those targeting digital assets and new financial technologies.
Recent comprehensive reforms under the current administration have centralized immigration and residency controls tied to economic and AML concerns. This includes stricter residency requirements for foreign investors and enhanced monitoring for financial crimes as part of maintaining fiscal and economic stability.
Argentina's efforts to combat money laundering have not stopped there. In 2022, the UIF is expected to include cryptocurrency businesses under AML laws. The FIU requires monthly reports on all cryptocurrency transactions from obliged entities.
Businesses in Argentina are obliged to report all suspicious activities to the UIF. Red flags for suspicious activities include size and frequency of transactions, transaction patterns that are irregular, unusual or uncommon, transactions suggesting criminal activity, transactions related to criminal activities, and geographical risks.
The penalty for individuals and businesses convicted of money laundering crimes varies from two to ten years imprisonment and a fine from two to ten times the amount of the illegal transaction made or intended to be made. The maximum penalty for failing to comply with the regulatory/administrative AML requirements is a fine of up to 10 times the value of the goods/services or the transaction that the failure concerns.
Argentina's commitment to combating money laundering is reflected in its dropping risk score for money laundering from 6.74 in 2016 to 5.03 in 2021. The country is a member of the Financial Action Task Force (FATF) and continues to propose new regulations to address this issue.
In summary, Argentina's AML regulatory regime continues to evolve, reflecting both global international AML standards and local governance priorities addressing economic and security challenges. The emphasis on integrating immigration policies with financial crime controls under recent reforms highlights the government's multidimensional approach to tackling money laundering risks.
| Timeframe | AML Evolution Highlights | |--------------------|------------------------------------------------------| | Early 2010s | Establishment and strengthening of FIU functions; adherence to FATF standards begins. | | Mid-late 2010s | Expansion of AML regulations to new sectors; improved CDD and beneficial ownership transparency. | | 2020-2025 | Current administration's reforms centralize controls, enhance data sharing, impose stricter residency & investment scrutiny related to economic crimes, and integrate AML efforts within broader fiscal reforms[1][2]. |
In light of Argentina's ongoing efforts to combat money laundering, businesses are now required to report all suspicious activities to the Financial Intelligence Unit (FIU), including irregular transactions or those suggesting criminal activity. The FIU is expected to include cryptocurrency businesses under AML laws in 2022, requiring obliged entities to submit monthly reports on all cryptocurrency transactions.
Moreover, the country's wealth-management and personal-finance sectors are subject to enhanced customer due diligence (CDD) measures, ensuring transparency on beneficial ownership and source of funds, particularly for high-risk customers and sectors vulnerable to abuse. These initiatives are part of the Argentine government's broader strategy to address emerging challenges in finance, investing, and business, ultimately strengthening its AML regulatory framework.
