On July 19 th., 2024, the Federal Administration of Public Revenues (“AFIP”), published in the Official Gazette General Resolution 5529/2024 (the “Resolution”) which implements the Public Registry of Beneficial Owners (the “Registry”).
The Registry was created by Law 27739 (the “Law”), which reformed the anti-money laundering system in Argentina, following the guidelines of the Financial Action Task Force (“FATF”).
The Decree states that legal entities, such as companies, trusts, foundations or associations, are used as corporate vehicles for various commercial activities and lawful businesses. However, they are also used in complex schemes designed to conceal the identity of beneficial owners and the true purpose behind assets and transactions, in order to circumvent money laundering prevention measures.
Authorities follow the money trail in financial investigations, especially when suspicious assets are held by corporate vehicles.
The FATF has issued Recommendation 24, which urges countries to take measures to prevent the misuse of legal persons in money laundering or terrorist financing. According to this recommendation, it is essential that countries ensure that adequate, accurate and timely information on beneficial ownership and control of legal persons is available and accessible to competent authorities in a timely manner.
Argentina is currently under monitoring in the 4th FATF Mutual Evaluation. In this context, the Congress passed the Law, which creates the Beneficial Ownership Registry under the supervision of the AFIP.
The AFIP is responsible for centralizing the information on beneficial owners, as provided by the Law. The Registry will be formed with the information from the Information Regimes established by General Resolutions 3312 and 4697 of the AFIP, in addition to other data obtained through information exchange agreements with other public agencies.
The AFIP may also update and correct the information when it detects inconsistencies or errors after audits or verifications in its databases. The Registry will be fed by the information provided by the beneficial owners, considering a threshold of 10% of participation or voting rights, except for entities incorporated or domiciled abroad that do not offer their securities publicly.
Access to the Beneficial Ownership Registry is granted to the Public Prosecutor’s Office, the Judiciary, the UIF, the Central Bank, the National Securities Commission, the National Insurance Superintendency, the National Institute of Associationism and Social Economy, public registries and legal entity control agencies, all of them through their Compliance Officers.
Section 29 of the Law establishes that all companies, individuals or legal structures, both domestic and foreign, operating in Argentina, must inform who their beneficial owner is in order to be included in the Register.
In addition, individuals residing in the country or undivided estates owning corporate or equivalent interests in entities incorporated abroad, including sole proprietorships, must also comply with this obligation.
Likewise, those who act or participate in trusts, trusts, foundations or equivalent entities incorporated abroad must inform the Registry.
The Resolution, mentioned in article 29 of the Law, states that the aforementioned entities have access to the information on their beneficial owners contained in the Register, and may share it with the entities obliged by the anti-money laundering law.
Access to the Register will be limited to the competencies of each entity and will require a legitimate connection for purposes of investigation, prevention or repression of crimes related to money laundering.
In order to access the Register, authorized entities must have a tax code, an adequate security level and an electronic tax domicile, and may consult the information through the “Public Registry of Beneficial Owners” service.
The AFIP, according to Article 30 of the Law, is in charge of keeping the information on beneficial owners updated, receiving data from the UIF and other public agencies, issuing complementary rules for the registry and entering into agreements with other agencies for the exchange of information and the performance of joint actions.
Article 31 of the Law defines the levels of access to the information, allowing the Public Prosecutor’s Office, the Judiciary and the UIF to access the registry within the framework of their competences. Specific control agencies such as the Central Bank, the National Securities Commission (“CNV”), the Superintendence of Insurance and the National Institute of Associationism and Social Economy (“INAES”) will also have access to the information within their competencies, as determined by the AFIP.
Finally, Article 32 of the Law establishes that failure to comply with the obligations to report beneficial ownership will be sanctioned in accordance with the provisions of Law 11683.
The AFIP Resolution implements the provisions of the Congress, which provided a legal framework to comply with the minimum standards required by the FATF from member countries as part of the global system for the prevention of money laundering and terrorist financing.
This resolution became effective on July 19 th., 2024.
