Argentina not addressing anti-money laundering failings says FATF


The Financial Action Task Force (FATF) has slammed a lack of progress in anti-money laundering (AML) and combating terrorist financing in Argentina.

As part of its recent mutual evaluation, the body said Argentina "has not made adequate progress in addressing a number of deficiencies" since its last report, in 2004.

In particular, the task force cited a lack of effective implementation of the anti-money laundering provisions that made the act a criminal offence since its last report six years ago. FATF stated that "there has still been no conviction under the provisions of this law, and proceeds of crime are not pursued".

There has not been a conviction in Argentina using money laundering legislation since it was introduced almost 10 years ago, and FATF says this "evidences the variety of reasons the Argentina AML provisions are deficient and not being effectively applied".

Argentina also came under fire for a continued lack of clarity between overlapping jurisdictions of domestic agencies.

Meanwhile, Hong Kong regulators have been working to strengthen their AML work, with guidelines issued by the Office of the Commissioner of Insurance (OCI) and the Hong Kong Monetary Authority (HKMA), based on updates of  its latest Anti Money Laundering and Counter Terrorist Financing Bill.

The efforts, are an attempt to catch up with recommendations provided by FATF in 2008, says a compliance source in the Far East.

Both of these, says the source, who declined to be named, "are FATF driven".
"Wherever FATF turns up, everybody is scrambling to prove their systems."

FATF was established by the G-7 in 1989 to promote and develop policy for anti-money laundering and combat terrorist financing. In papers produced in 2008 by FATF as part of its mutual evaluation reports on AML efforts in Hong Kong, the body said that although regulatory systems in the nation were partially compliant on implementation of UN regulations, "significant shortcomings exist in implementation of the terrorist financing convention".

The report further stated: "Hong Kong lacks the capacity to implement express freezes on terrorist property and has no capacity to forfeit funds used or allocated for the purpose of committing terrorist offences other than those associated with Al Qaeda and the Taliban."

The OCI of Hong Kong was also criticised. Again, FATF noted that the region was "partially compliant" on expectations of supervisors, but its report stated that "the legal authority of the OCI routinely to monitor for AML/CFT compliance and to apply sanctions is limited".

The OCI is responsible for supervision of insurers in the region, and recent guidelines from the office, says the source, are partially motivated by that criticism. "The last time FATF came round to Hong Kong, they said that [AML efforts by small insurers] were a gap, so I think the motivation was, again, largely driven by FATF, to fill that gap."

However, the source also warns that while governments are fully committed to combating money laundering and terrorist financing, the motivation may be different at the actual financial institutions, saying: "I think it would almost be true to say that in 99% of cases the financial institutions are doing it because they were told to do it. Very few financial institutions see any return on investment, particularly in terms of the effort and time that's put in...certainly for them anyway."



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