How Did the UIF Amend the Definition of Beneficial Owner and What Else Changed?

On October 21, 2021, the Financial Information Unit (“UIF” after its acronym in Spanish) issued Resolutions No. 112 and No. 113, which established guidelines and instructions on what measures Reporting Entities have to apply to identify their clients and how they have to provide information to the UIF according to the economic activity these clients carry out.

Resolution No. 112

Resolution No. 112 seeks to amend the resolutions on identification and reporting of Beneficial Owners to increase the efficiency of the preventive system provided by Law No. 25,246 and its amendments.

The resolution establishes the measures and procedures that the Reporting Entities must observe to identify the Beneficial Owners. The UIF thus modified the definition of Beneficial Owner in the different rules applicable to each of the Reporting Entities, establishing that:

• Beneficial Owners are those persons who own at least 10% (20% before this resolution) of the capital or voting rights of a legal entity, a trust, an investment fund and/or any other legal structure; and/or those persons who by other means may exercise the ultimate control of such structures;
• Final control is understood as that exercised, directly or indirectly, when, due to factual or legal circumstances, individuals have the power to shape the corporate will when the governing body of the person or legal structure is making a decision and/or appointing or removing administrative body members;
• When the Beneficial Owners cannot be individualized, individuals in charge of the management, administration or representation of the person or legal structure shall be considered as such, without prejudice to the powers of the UIF to verify and supervise the causes that led to the impossibility of identifying them in the first place;
• In the case of trust contracts or other similar domestic or foreign legal structures, the Beneficial Owners of each of the parties to the contract must be individualized.

In addition, other relevant points in the regulation include the following:

• A swrn statement must now be filed for Reporting Entities to identify the Beneficial Owners of their clients and keep their information updated;
• Any case f non-compliance or defective compliance with any of the obligations set forth in this regulation is now subject to penalties pursuant to the provisions of Chapter IV of Law No. 25,246 and its amendments.

Resolution No. 113

Resolution No. 113 updates the minimum amount of the transactions on initial registrations, transfers, pledges and early cancellations of pledges related to Motor Vehicles and purchase and sale of motor vehicles, which will be mandatory for the Reporting Entities to define a client profile.

That modification resulted from an increase of more than 15% in the monthly Motor Vehicle Price Index over the last six months.

Consequently, the minimum annual amount of transactions was increased to $4,800,000, from which the Reporting Entities must define a client profile based on economic, financial and tax information and documentation of the clients performing these transactions. They must also take into consideration the amount, type, nature and frequency of the transactions performed by the client and the origin and destination of the resources involved in their operations.

Likewise, Resolution No. 113 establishes that the amount must be automatically updated in January and July of each year, based on the increase of the percentage of the Motor Vehicle Price Index accumulated over the last six months.

Finally, the resolution also modifies the amounts that trigger the Reporting Entities’ duty to make systematic reports with respect to the: i) issuance of blue certificates for motor vehicles; ii) assignment and/or re-registration and/or early cancellation of pledges on motor vehicles; and iii) acquisition of automobiles.

This article is a brief comment on legal news in Argentina; it does not purport to be an exhaustive analysis or to provide legal advice.