June 27, 2011 / 11:01 PM / 8 years ago

UPDATE 1-Argentina told to do more to fight money laundering

  
 * Argentina told to do more to tackle terrorist funding
 * FATF gives country October deadline to make progress
 * Argentina placed on list including Nigeria, Pakistan
 (Adds statement from banking association)
 BUENOS AIRES, June 27 (Reuters) - Argentina has been put
on a list of countries that are not doing enough to fight
money laundering and terror financing despite passing a law to
tighten its legislation earlier this month.
 The Financial Action Task Force (FATF), an international
organization of governments and regional groups, recognized
Argentine efforts on Monday, but said it was "seriously
concerned" about progress in cracking down on terrorist
financing.
 "Substantial progress to improve the criminalization
of terrorist financing has not yet taken place" in Argentina,
the task force said in a statement. "The FATF remains
seriously concerned about the risks that such deficiencies may
pose."
 The FATF, which ranks countries that fail to comply with
standards against money laundering and terrorism financing,
said it would review the South American country's progress at
its next meeting in October.
 "The FATF expects Argentina to ... present to the FATF a
draft law criminalizing terrorist financing in accordance with
international standards," the statement said.
 HIGHER PENALTIES UNDER NEW LAW
 Under pressure to meet global standards, the Argentine
Senate passed a law earlier this month to increase the
penalties for money laundering and close loopholes in existing
legislation. For details, see [ID:nN01177592]
 Government officials have denied local newspaper reports
this week that said Argentina, Latin America's No. 3 economy,
had been sanctioned or added to a so-called "gray list."
 Justice Minister Julio Alak said the FATF's
recommendations "would be taken into account to keep improving
the system," the state news agency Telam said on Sunday.
 Further criticism of the country's progress on meeting the
FATF's standards could be damaging to center-left President
Cristina Fernandez as she prepares to run for a second
four-year term in office in an Oct. 23 election.
 Other countries on the list being reviewed by the FATF for
compliance include Nigeria, Pakistan, Indonesia, Angola,
Bangladesh, Ecuador, Honduras and Nicaragua.
 Financial analysts say being included on the list could
complicate the overseas operations of Argentine banks because
their transactions would face closer scrutiny by foreign
regulators. For details, see [ID:nN14146674]
 Argentina's ABA banking association said it "supported and
welcomed" congressional efforts to make progress on the
issue.
 "Besides working to be once again considered favorably by
the FATF in October, government officials should also work to
ensure the FATF understands our country's problematic
(situation) -- which is similar to other developing countries
-- with regards to the informal economy when seeking to
implement international standards," ABA President Claudio
Cesario said.
 (Reporting by Luis Andres Henao and Guido Nejamkis; Editing
by Helen Popper and Jan Paschal)
 (helen.popper@thomsonreuters.com; +54 11 4318 0655;
  Reuters Messaging: helen.popper.reuters.com@reuters.net))




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