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Argentina: Financial Information Unit Resolution 1/2023 applicable to remittance companies

By 3 Mins Read

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.

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Author

Gabriel Gomez-Giglio is partner at Baker McKenzie’s Buenos Aires office, chair of the Latin America Banking & Finance Practice of Baker McKenzie and a member of the Global Steering Committee of the Firm’s Financial Institutions Industry Group. He advises clients on a variety of general commercial issues. His practice focuses on the areas of transactional and regulatory matters, including but not limited to multinational financial transactions, commercial agreements and mergers and acquisitions. Gabriel is a member of the Board and Adjunct Professor of Law at Universidad Torcuato Di Tella and a visiting professor with the Centre for Commercial Law Studies, Queen Mary College, University of London.

Author

Francisco José Fernández Rostello is a partner and member of the Firm’s Banking & Finance Practice Group in Buenos Aires. He has worked for the International Swaps and Derivatives Association and for Société Générale, New York Branch. He is knowledgeable on matters related to issuance of debt, derivatives transactions, local and cross-border financing, and securities transactions.

Author

Fernando Goldaracena is a partner in Baker McKenzie Buenos Aires Office. He heads the White Collar Crime Practice Group and is a member of the Compliance & Investigations Practice Group. Prior to joining the Firm, Fernando served as secretary of the Federal Criminal Court No. 2 of San Isidro, where he led several criminal investigations ranging from white collar crimes, public corruption and tax fraud. He is member of both the Compliance & Money Laundering and the Criminal Law Practice Groups of the City of Buenos Aires Bar Association (Colegio de Abogados de la Ciudad de Buenos Aires).

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