Of DOW JONES NEWSWIRES Jun 1, 2011

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201106011836dowjonesdjonline000616&title=argentina-passes-stiff-new-money-laundering-law

BUENOS AIRES -(Dow Jones)- Argentina's Senate passed money laundering legislation Wednesday, weeks ahead of an international review of the country's anti-money-laundering and terrorist financing controls in which Argentina was expected to receive embarrassing criticism.

The bill, which is backed by President Cristina Fernandez, was approved by a 60 to two vote and was passed by the lower legislative chamber last month.

The law will make it a crime to launder one's own money, which is currently not penalized due to a major loophole in the law. It would also enhance the government's ability to freeze and confiscate property related to laundering.

Those caught attempting to illegally launder more than 300,000 pesos ($75,000) face between three and 10 years in jail, with sentences of six months to three years for smaller amounts.

"It's taken 11 years to get this done, and it's only because [Argentina] was going to be criticized," Senator Luis Juez, from the opposition Civic and Social Accord party, told Dow Jones Newswires. "It's got lots of deficiencies, but it needed to be passed by June 20," Juez said.

The Financial Action Task Force--whose 34 member nations include the U.S.--had given Argentina until its next plenary meeting this month to demonstrate its commitment to beefing up its measures against money laundering and terrorism financing following a damning report published last year by the organization.

Countries that fail to implement FATF's recommendations run the risk of being labeled as high-risk or non-cooperative jurisdictions. That can make it more costly and difficult for a nation to conduct business with the financial systems of FATF compliant countries.

An on-site inspection by the FATF in November 2009 found that Argentina was either partially compliant or non-compliant with 46 of its 49 recommendations.

Since the beginning of the year, Argentina's financial crimes agency, UIF, has issued at least 22 new regulations aimed at improving the reporting and documentation requirements for real estate and financial transactions in response to the FATF's observations.