By Miguel Cassagne (Head of CASSAGNE Consultores in AML/CFT)

Recently, through Decree No. 353/2025 (Official Gazette, 23 May 2025), the Argentine government implemented a series of measures aimed at facilitating the incorporation of so-called "mattress dollars"?that is, undeclared U.S. dollar savings held outside the formal banking system?into the formal economy. This initiative, titled the ?Historical Reparation Plan for Argentinians? Savings,? seeks to simplify day-to-day economic operations and encourage individuals with undeclared U.S. dollar holdings to engage in investments, purchases, and foreign currency transactions, without such minor transactions being automatically subject to scrutiny by the Revenue and Customs Control Agency (ARCA).

Among the highlighted measures are:

The elimination of certain automatic reporting regimes, which previously required the declaration of transactions such as the purchase and sale of vehicles, real estate, or high-value expenditures;

A substantial increase in the minimum reporting thresholds for mandatory declarations of financial transfers and movements;

The implementation of an optional simplified income tax regime, allowing taxpayers to declare income without detailed justification of expenses or asset increases.

At first glance, these measures appear to reduce the financial information and spending data channeled to ARCA. However, there is considerable confusion regarding their actual scope, which could lead to the erroneous interpretation that such measures imply a reduction?or even an elimination?of anti-money laundering (AML) controls in financial or registrable property transactions of lesser value.

It is therefore essential to clarify that these fiscal policy changes (both those already enacted and any that may be introduced in the future) neither modify nor should be interpreted as modifying the existing obligations regarding customer due diligence and the reporting of suspicious transactions imposed on reporting entities under Law No. 25.246 (the Argentine Anti-Money Laundering Law) to the Financial Intelligence Unit (UIF).

Indeed, the regulations currently in force, as well as those that may be enacted by the government, do not and should not affect the legal responsibilities of banks, financial institutions, notaries, real estate agencies, gambling establishments, art dealers, and other reporting entities listed under Article 20 of the Anti-Money Laundering Law.

These entities remain, and must remain, legally obliged to conduct thorough customer due diligence processes, including verifying the source of funds involved, in order to establish and assess each client?s transactional profile (i.e., their economic/financial capacity to carry out the intended transaction).

This obligation remains unaltered and must be preserved, as it constitutes an essential element for constructing the aforementioned transactional profile. This determination is not a mere bureaucratic formality but rather the cornerstone of effective client transaction monitoring. It allows for the identification of ?unusual? transactions?those that do not align with the client's established profile?which must then be analyzed to determine whether they can be clearly and sufficiently justified. If not, the transaction must be classified as ?suspicious? and mandatorily reported to the UIF.

To believe or assume that the adopted or forthcoming measures exempt reporting entities from requesting and verifying the source of funds in the context of customer due diligence would represent a serious distortion and a structural weakening of the AML/CFT system. It would remove a core mechanism used to determine suspicion and trigger reporting?an essential component of the obligations imposed on reporting entities. In plain terms, it would obstruct the identification of suspicious transactions and the ability to report them accordingly.

Such a weakening would undoubtedly draw severe criticism and potential sanctions from international bodies such as the International Monetary Fund (IMF) and the Financial Action Task Force (FATF), which has already raised concerns in this regard, placing Argentina at risk of being relisted on grey or even black lists.

Moreover, it must be emphatically stated that the strict application of the current AML/CFT framework in no way impairs the government?s fiscal objectives, since the flow of information generated between reporting entities, the UIF, the Public Prosecutor?s Office, and criminal courts is strictly protected by absolute confidentiality, as mandated by Article 22 of Law No. 25.246. This provision imposes a binding duty of secrecy, breach of which is punishable by imprisonment. Accordingly, there is no apparent reason why the AML/CFT system should be subject to any change.

In other words, not even the UIF may share the information obtained from reporting entities under its mandate with ARCA or any other State agency, judge, or prosecutor, unless such information is expressly requested by the Public Prosecutor or a competent criminal judge in the context of a specific judicial investigation concerning money laundering or terrorist financing in which the individual involved is a party.

This strict confidentiality not only protects citizens' rights vis-à-vis tax authorities but also serves as a critical safeguard that ensures the effectiveness of the AML/CFT system, by enabling the secure and confidential flow of sensitive information.

In conclusion, while the fiscal objectives pursued by the government through these recently adopted measures may be legitimate and even commendable, it is imperative to stress that any potential reform that weakens the current requirements regarding the verification of the source of funds, due diligence, monitoring, and mandatory reporting of suspicious transactions could cause irreparable harm to the national AML/CFT framework.

Therefore, it is crucial that governmental authorities uphold the core structure of the AML/CFT system and ensure that all policy announcements are clearly communicated to the market in order to preserve the credibility of the UIF and the Argentine preventive system it oversees. The integrity of this system hinges on the absolute confidentiality of sensitive information, without which it cannot fulfill its primary purpose: the effective identification and repression of money laundering and terrorist financing.

Upholding these principles is vital to maintaining Argentina?s international reputation for regulatory compliance and avoiding unnecessary risks before the global community.