Argentina Removed From Money Laundering ‘Gray List’

SHARETweet about this on TwitterShare on FacebookShare on LinkedInShare on Google+

A global financial crime watchdog has removed Argentina from a “gray list” of countries that aren’t doing enough to fight money laundering, but a lack of convictions and persistent allegations that close associates of the president are involved in shady financial dealings call into question this decision.

On October 24, the Financial Action Task Force (FATF) removed Argentina from its list of countries that lack sufficient anti-money laundering legislation. The FATF first identified problems in Argentina’s anti-money laundering regime in 2010.

FATF spokeswoman Alexandra Wijmenga-Daniel told InSight Crime via e-mail that the intergovernmental body confirmed Argentina was taking sufficient action in implementing anti-money laundering reforms, following a visit to the country this year. 

The FATF noted in a June report that Argentina had increased its requirements for financial record keeping and passed resolutions giving more power to its financial crime intelligence unit, among other measures, which the agency considered to be “sufficient steps” in addressing the problem.     

InSight Crime Analysis

Even though Argentina has strengthened its anti-money laundering legislation, this still hasn’t resulted in the successful completion of many cases. According to the US State Department, the period January through September 2013 saw just 20 prosecutions and zero convictions for the crime.

Another issue is the ongoing investigation into close associates of President Cristina Fernandez de Kirchner, who are under scrutiny for suspicious financial transactions. According to a report from the International Assessment and Strategy Center (IASC), a judge in Argentina has tracked at least $65 million linked to the president’s financial associate Lazaro Baez through multiple accounts and front companies. The judge’s investigations revealed that the money — which the IASC report said appeared to be part of the president’s “shadowy personal fortune” — was flown out of the country on private planes and deposited into foreign accounts in countries known for being tax havens.

SEE ALSO: Coverage of Money Laundering

These allegations are particularly notable, given that the government has controls in place that are intended to prevent capital flight.

These same tight currency controls have helped fuel the development of a thriving black market dollar exchange, known as the “blue dollar.” According to the Council of Hemispheric Affairs (COHA), this black market for currency provides an incentive for companies to launder money since they can make a larger profit selling dollars on the black market.  

SHARETweet about this on TwitterShare on FacebookShare on LinkedInShare on Google+