Senate approves the reform of the Money Laundering Law – Law No. 27.739
Report from the Compliance & Investigations Department | Senate approves the reform of the Money Laundering Law – Law No. 27.739
On March 14, 2024, Law No. 27,739 was approved (BO 15/03/2024), aiming to reform the National Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) Preventive System in order to incorporate the standards of the Financial Action Task Force (FATF) before the execution of the new Mutual Evaluation Report on the Argentine Republic. This project is the first to substantially modify the AML/CFT system in the last thirteen years, introducing new legal tools to combat organized crime, providing greater effectiveness to the prevention system, and including new sectors and actors under the umbrella of law enforcement compliance.
The reform focuses on five main points:
Amendments to the Penal Code
Article 303 of the Penal Code updated its monetary amount from $300,000 to 150 minimum vital and mobile wages; that is, to a unit of periodic updating measurement.
Foreign terrorist fighters were included in the cases covered by Article 306 of the Penal Code, and a new criminal type was established that condemns the financing of the proliferation of weapons of mass destruction.
New criminal types were included (already provided for in current international conventions).
Amendments to Law 25.246
Entities obligated before the UIF (in the terms of the new Article 20 of this law) were included: i) all those who provide custody or safeguard services for funds or valuables; ii) non-financial credit providers; iii) virtual asset service providers; and iv) lawyers, accountants, and public notaries, only when they prepare or carry out transactions on behalf and/or on behalf of their clients, related to certain specific activities; that is, a) Purchase and/or sale of real estate, when the amount involved exceeds seven hundred (700) minimum vital and mobile wages; b) Administration of assets and/or other assets when the amount involved exceeds one hundred fifty (150) minimum vital and mobile wages; c) Administration of bank accounts, savings and/or securities when the amount involved exceeds fifty (50) minimum vital and mobile wages; d) Organization of contributions for the creation, operation, or administration of legal entities or other legal structures; e) Creation, operation, or administration of legal entities or other legal structures, and the purchase and sale of legal business and/or interests in legal entities or other legal structures. In the case of accountants, in addition to the transactions mentioned, the preparation of audit reports of financial statements is included. In the case of lawyers, public notaries, and public accountants acting as independent professionals, it is established that they are not obliged to report suspicious transactions if the relevant information was obtained under circumstances in which they are subject to professional secrecy.
Additional obligations applicable to obligated entities were added to Article 21 of this law. One of the new obligations is to determine the AML/CFT risk associated with the client, their operations, products, services, transactions, or distribution channels, and the geographical area involved. In addition, obligated entities must conduct a self-assessment of the risks determined and implement suitable measures to mitigate them. Furthermore, Article 21 now establishes that if obligated entities are unable to fulfill their obligations, this shall be understood as an impediment to the initiation or continuation of relationships with the client.
Non-profit organizations were excluded from being obligated entities before the UIF, although they must establish proportional measures to mitigate possible AML/CFT risks and will be subject to a terrorism financing prevention analysis by public bodies and authorities, according to a new Chapter VI that will be added to the law.
Creation of a Centralized Registry of Ultimate Beneficial Owners
A Public Registry of Final Beneficial Owners was included in a new Chapter III, which will be created by the AFIP and will contain precise and updated information about those natural persons considered ultimate beneficiaries.
The Public Prosecutor’s Office, the Judiciary, and the Financial Information Unit will have access to the information in the register in question.
Additionally, natural or legal persons, public or private, will have access to the registry information, taking into account the limitations imposed by the AFIP.
Before this modification, there was no centralized registry from which this information could be obtained, although access to it was available through scattered sources.
Establishment of Parliamentary Oversight
The Legislative Branch is now held responsible, through a Bicameral Commission for Oversight of Intelligence and Financial Activities Agencies, for overseeing the AML/CFT prevention, investigation, and prosecution system. This is achieved through the creation of a Chapter V, which details the activities and functions of the new Commission.
Creation of a Registry of Virtual Asset Service Providers
VASPs are incorporated as obligated entities before the UIF and registered with the CNV.
The reform stipulates that all foreign or local companies providing virtual services in the Argentine Republic must register in this new registry with the CNV.
Sincerely,
Maximiliano N. D’Auro
Gustavo Papeschi