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(Jul 20, 2011) On June 17, 2011, the legislature of Argentina passed Law 26683 to amend the Criminal Code in order to update the criminal treatment of money laundering (BOLETIN OFICIAL (June 21, 2011) (official site)). The new Law was adopted in response to pressure from the Financial Action Task Force (FATF), an inter-governmental body that combats money laundering and terrorism financing through the promotion of national and international policies (FATF website (July 14, 2011)).

A November 2009 onsite inspection by the FATF delegation in Argentina found that the country was not fully in compliance with FATF recommendations (FATF Recommendations, FATF website (last visited July 14, 2011) and warned about the possibility of including the country in its list of high-risk or non-cooperative countries. (MUTUAL EVALUATION REPORT-ARGENTINA, FATF website (Oct. 22, 2010).)

Although Argentina already had criminal sanctions against money laundering (former arts. 278 and 279 of the Criminal Code), those provisions had serious flaws that prevented the effective punishment of the crime. Moreover, since the introduction of the crime of money laundering in the Code, very few cases had been brought to justice and rarely was anyone prosecuted for this crime. (F. D'Albora, La Nueva Ley de Lavado de Dinero, EL CRONISTA COMERCIAL (July 17, 2011).)

Money Laundering a Distinct Crime

Under former provisions of the Criminal Code, money laundering was treated as a crime of aiding and abetting or concealment of another crime. Under the new Law, money laundering is an autonomous crime, under a new chapter entitled "Crimes Against the Economic and Financial Order" (Martín Piqué, El Gobierno Quiere que el Lavado de Dinero Sea una Figura Penal Autónoma, TIEMPO ARGENTINO (Apr. 11, 2011)).

The new Law penalizes the laundering of an individual's own money, so- called "self money laundering." This legislative change closes an existing loophole in the Code by not requiring that a conviction be obtained for a crime related or based on money laundering. The laundering of money is now a crime in itself, and need not be related to any other offense. (Fue Aprobada la Primera Ley que Tipifica el Lavado de Dinero como Delito Autónomo, JUSTO.COM (June 2, 2011).)

Money Laundering Is Newly Defined

A number of new provisions are found under article 5 of the Law, which renumbers articles 303, 304, and 305 of the Criminal Code as numbers 306, 307, and 308, respectively. The new definition of the crime imposes a sanction on anyone who converts, transfers, manages, sells, disguises, or through any means puts in market circulation assets derived from a crime involving a sum of over 300,000 pesos (about US$73,200), resulting in the disappearance of its criminal origin and giving it an appearance of having been acquired legally (Law 26683, art. 5 (303.1)).

Penalties

The criminal penalties for money laundering include imprisonment of three to ten years and a fine of from two to ten times the amount of the criminal transaction (id.). This sanction is increased if the perpetrator's actions are habitual or if he or she acts with an organization or group (id. art. 5 (303.2.a)). In the case of a public official who carries out the crime in exercising his duties, in addition to an aggravated sanction, he is subject to disqualification from public office (id. art. 5 (303.2.b)). A sanction of six months to three years of imprisonment is applied to anyone who receives the proceeds of the crime, whether money or other assets, in order to give them a legal appearance (id. art. 5 (303.3)). The new provision also imposes a sanction of a fine, suspension of commercial activities, or prohibition of participation in public bids for government contracts on companies or legal entities that have engaged in money laundering (id. art. 5 (304)).

New Powers for Judicial and Financial Authorities

Judges now have the authority to order precautionary measures aimed at preserving the assets involved in a crime from the beginning of an investigation. The seizure of money laundering-related assets may be ordered by the judge even before a conviction is obtained, if its illegal origin has been proven (id. art. 5 (305)). The seized assets will be used to compensate the victims or the State for the damages caused by the crime (id. art. 5 (306)). In order to protect witnesses or any suspect who is willing to collaborate with the criminal investigation, the judge may order that their identities be kept confidential (id. art. 23).

The new Law also expands the investigatory authority of the Unidad de Información Financiera (Financial Information Unit, UIF), an entity created within the Ministry of Finance to supervise and report any suspicious financial operation to the authorities. The UIF will intervene in the investigation of money laundering, especially, the laundering of assets derived from the following crimes: drug trafficking, arms smuggling, crimes perpetrated by an illegal association, fraud committed against the State, child prostitution and pornography, terrorism financing, extortion, human trafficking, and tax evasion, among others (id. art. 8). Those required under the Law to report to the UIF actions or operations deemed suspicious of money laundering have 150 days after the date of the transaction to do so. In the case of suspicion of terrorism financing, the report must be made within 48 hours (id. art. 17.d). Bank secrecy or professional confidentiality may not be argued in order to refuse to submit documentation or information required in the course of an investigation of activities surrounding suspected money laundering, when that information is required by the UIF (id. art. 14.1).

Law 26683 also adds real estate agents and professional sports organizations as entities responsible for reporting suspicious money laundering activities, in addition to the financial and banking institutions that typically have that responsibility (Law 26683, art. 15).

Although the Law as adopted by the legislature does not allow the UIF to act as a plaintiff in investigation proceedings, this prohibition (in art. 25) was challenged by Argentina's President, Cristina Kirchner, who promulgated Law 26683 with the exception of this provision. (Decree 825/2011, BOLETIN OFICIAL (June 22, 2011); Argentina Promulga una Ley Contra el Lavado de Dinero, DIARIO EL MUNDO (June 22, 2011).)

Law 26683 is a very important step forward in the fight against money laundering in Argentina, but appropriate laws and regulations against this crime need also to be backed by the political will to undertake all the needed measures towards its enforcement, assigning the necessary resources to secure prosecutions and obtain convictions. According to a World Bank report, "the political will is the key to success" to prevent money laundering and terrorism financing. (PIERRE-LAURENT CHATAIN et al., PREVENTING MONEY LAUNDERING AND TERRORIST FINANCING, A PRACTICAL GUIDE FOR BANK SUPERVISORS 8 (The World Bank, 2009); see also Argentina ya Tiene una Ley Contra el Lavado de Dinero, DIARIO JORNADA (June 2, 2011) & Argentina Cuenta con Nueva Ley Antilavado de Dinero - Aspectos Mas Importantes, Cámara Argentina de Casas y Agencias de Cambio (CADECAC) website (June 6, 2011).)

Author: Graciela Rodriguez-Ferrand More by this author
Topic: Crime and law enforcement More on this topic
Jurisdiction: Argentina More about this jurisdiction

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Last updated: 07/20/2011