Nov 17, 2010 10:46 PM GMT+0800

http://www.bloomberg.com/news/2010-11-17/bafin-alerts-lenders-about-money-laundering-risks-in-argentina.html

Germany’s financial regulator told banks to consider using heightened care to prevent money laundering when handling transactions from Argentina.

The regulator, Bafin, said in a letter to the banks that Argentina had “substantial deficits” in its policies to prevent money laundering, citing an Oct. 22 report by the Financial Action Task Force, an inter-governmental body. The FATF hasn’t decided what measures to take over the result, the regulator said.

“Because of the substantially increased risk situation, taking a higher diligence standard should already be contemplated in relations with business partners residing in Argentina, as well as in transactions to or from this country,” Bafin wrote in the letter.

FATF said Nov. 5 that its evaluation of Argentina showed the country hasn’t made adequate progress in addressing deficiencies identified in a review six years ago. The country’s measures to combat money laundering and terrorist financing that are in place lack effectiveness, the agency said.

FATF has 36 members, among them Argentina, Germany, the U.K. and the U.S. The body’s primary instrument to foster its goals is a multilateral peer review program.

Spokesmen at Argentina’s presidential palace and Economy ministry in Buenos Aires didn’t immediately respond to Bloomberg calls and e-mails seeking comment.