Argentine money laundering bill passes Senate

BUENOS AIRES (Reuters) – Argentina’s Senate Wednesday passed a bill called for by President Cristina Fernandez to toughen financial controls and meet global standards on fighting money-laundering.

Fifty-seven legislators voted in favor of the measure, with four voting against and one abstention, as Argentina hopes to avoid being put on a “gray list” of tax havens that have not fully implemented global transparency and data-sharing standards.

Ending up the gray list would raise borrowing costs and be a black eye for Fernandez as she weighs a re-election bid in October.

The bill, which now must be signed by Fernandez, seeks to close a loophole in the current law by criminalizing the act of laundering one’s own money.

It would boost government powers to freeze and confiscate property and includes a provision saying that Argentines who commit money-laundering crimes in other countries can be tried in Argentina.

Lawmaker Maria Jose Bongiorno urged the Argentine justice system to “use the tools that the legislative branch has provided” by passing the measure.

A decade after bank deposits were frozen and devalued during a severe economic crisis, Argentines have hidden savings worth some $10 billion to $15 billion in safe-deposit boxes or under the proverbial mattress — representing 10 percent to 15 percent of total current deposits.

The government wants to find the undeclared money as part of a drive to avoid sanctions, such as being put on the gray list by the multinational Financial Action Task Force, a policy-making body that encourages anti-money-laundering reforms.

On top of what they have stashed away locally, Argentines are estimated to keep another $150 billion in savings abroad.

For decades, they have used U.S. dollars to protect themselves from currency devaluations and high inflation. Many people continue hoarding dollars and avoiding bank accounts, despite roughly 10 percent annual interest on fixed-term deposits in pesos. (Reporting Karina Grazina and Guido Nejamkis; Writing by Hugh Bronstein; Editing by Bill Trott)