In brief

On 8 January 2024, the Financial Information Unit (UIF for its Spanish abbreviation) issued Resolution No. 1/2023 (“Resolution“), establishing minimum requirements for the identification, evaluation, monitoring, management, and mitigation of money laundering and terrorist financing risks applicable to persons or legal entities that perform remittances within and outside Argentina. The Resolution is aligned with prior resolutions issued by the UIF for other regulated entities. Accordingly, the Resolution changes the approach from formal regulatory compliance to a risk-based approach.

In depth

On 8 January 2024, the UIF issued the Resolution by which minimum requirements were established for the identification, evaluation, monitoring, management, and mitigation of money laundering and terrorist financing risks applicable to persons or legal entities that perform remittances of funds within and outside Argentina (“Regulated Entities“).

Among other provisions, the Resolution establishes the following obligations for Regulated Entities:

1. Implement a system for the prevention of money laundering and financing of terrorism (ML/FT) with a risk-based approach that shall contain all policies, procedures, and controls in order to effectively identify, evaluate, monitor, manage, and mitigate the risks to which it is exposed and comply with the obligations required by the regulations in force.
2. Prepare a technical report of ML/FT risk self-assessment, with a methodology for the identification, evaluation, and understanding of risks in accordance with the nature and dimension of its business activity, which may be reviewed by the UIF.
3. Submit a risk tolerance statement duly analyzed and approved by the management body or the highest authority. Such statement must identify the ML/FT risk margin that the management body or highest authority of the Regulated Entity is willing to assume, decided prior to its actual exposure and in accordance with its risk management and mitigation capacity, in order to achieve its strategic objectives and business plan.
4. Appoint a compliance officer and an alternate compliance officer, who must be registered before the UIF and comply with the obligations required by said entity.
5. Continuously monitor the client’s operations and ensure that their transactions are consistent with the knowledge of the client, their profile, and associated risk level.
6. Report to the UIF all transactions that may be classified as suspicious transactions under the applicable regulations.
7. The Resolution will be effective as of 1 March 2024, with certain exceptions, such as the submission of self-assessment reports and applied methodology, which must be submitted in 2025.

To access this alert’s Spanish version, click here.