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Argentina's new money laundering act

On May 11 2000, Argentina enacted the Money Laundering Act (the MLA), which may be summarized as follows:

  • Those shown to have willfully engaged in laundering assets valued more than $50,000 are liable to prison terms of two to ten years and fines of two to 12 times the value of the laundered assets in question. If this willful engagement concerns laundered assets valued at less than $50,000, the corresponding prison term ranges from six to 36 months and fines ranging from 20% to 150% of the value of the laundered assets. The minimum prison sentence is raised to five years in the case of a repeat offender, or in the case of an offender shown to have acted as a member of a group formed for the purpose of laundering assets.
  • The MLA creates the Unidad de Información Financiera (the UIF) as the enforcement authority empowered to prevent and investigate the laundering of assets connected to the illegal drug trade, illegal arms sales, terrorist organizations, corruption, prostitution of minors and child pornography. Despite being granted broad investigatory powers, the UIF must nevertheless resort to judicial subpoenas in order to demand information protected by the confidentiality norms of banks, tax authorities or professional advisers, or other confidentiality rules established by law or contract. Similarly, any arrest or seizure of documentation must be backed by a judicial order.
  • The MLA is applicable to the laundering of assets resulting from a criminal action committed outside of Argentina, so long as the action is punishable as a crime in the place where it was committed.
  • The MLA requires financial institutions, pension funds, stock brokers, stock dealers and insurance companies, among others, to inform the UIF of any "suspicious" action or operation, regardless of the amounts involved. "Suspicious" is understood to mean "any transaction which, in accordance with the usage and custom of the activity involved and the experience and expertise of the persons required to inform, appears unusual, without economic or legal justification, or is of an unsual or unjustified complexity, whether in an isolated or repeating fashion." The UIF is charged with establishing objective norms, against which compliance can be checked, for each type of activity.
  • The MLA can also use administrative fines to punish those corporate entities whose personnel are found to have participated in the laundering of assets. If laundering is found to have been committed willfully, the fines range from two to 10 times the value of the laundered assets in question. If laundering is found to have been committed through "fearlessness or grave imprudence" then the fines range from 20% to 60% of the value of such assets. Non-compliance with the obligation to inform the UIF is subject to a fine of one to 10 times the total value of the assets laundered or the operation in question, as the case may be. This is applicable in each case to both the corporate entity and the individual person(s) involved. In the event that the value of the laundered assets cannot be established, the fines are fixed to range from $10,000 to $100,000.

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