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Money Laundering and Terrorism Financing - Obligations for Foreign Trade Operators


The latest resolution to come from the Argentinean Government focuses on money laundering and terrorism financing and establishes the measures and proceedings that foreign trade operators should comply with in order to prevent, detect and report the facts, acts, transactions and omissions that may result from these crimes. Taxand Argentina discusses the latest resolution impacting foreign trade operations.

The reolution is aimed at customs brokers, carriers agents, importers and exporters and imposes a duty to adopt a Prevention Policy of money laundering and terrorism financing crimes. Such policy must include, essentially, the elaboration of a guide and a transactions analysis and risk management register; the appointment of a compliance official (only for legal entities); personnel training; and the implementation of certain technological tools.

An Identification and "Know your Client" Policy must be established by the foreign trade operators. Such policy must consist mainly through the elaboration of client identification files which allow the analysis of the transactions to determine their transactional profile. In certain cases, eg, transactions and commercial relations with:

(i) individuals or companies from or in countries that do not apply or insufficiently apply the Financial Action Task Force recommendations
(ii) individuals or companies included in the terrorists lists, the client identification proceeding must be reinforced

Client and transaction documents must be kept for 10 years.

Additionally, there are certain reports that must be submitted to the UIF (for example the Systematic Report and the Suspicious Transactions Report).

Taxand's Take

Regarding applicable sanctions, the resolution refers to the "Administrative Crime Regime" which states that failure to comply with any of the UIF report obligations is subject to a penalty from 1 to 10 times the total value of the goods and transactions, as long as it is not considered a major felony.

Such penalty will be applied to the individual, whether acting on behalf of a legal entity or on its own behalf, that fails to comply with any of the UIF report obligations. The same penalty will be applied to the legal entity in which the individual is appointed. The penalty will be from AR$ 10,000 up to AR$ 100,000 (between approx. USD 2,500 and USD 25,000) when the real value of the goods can not be established.

The resolution came into force on 24 February 2011 and as such there are several terms that must be complied with immediately.

Your Taxand contact for further queries is
Eduardo Mallea

Taxand's Take Author