Too lengthy and too low: an analysis of the sanctions imposed by Argentina’s Financial Information Unit between 2016 and 2019

Purpose - This paper aims to evaluate how Argentina’s Financial Information Unit (Unidad de Información Financiera, FIU) has responded after detecting noncompliance with money laundering regulations. Specifically, it identifies the main lessons that can be drawn from analyzing the sanctions that the FIU imposed between 2016 and 2019. Design/methodology/approach - The issues that this article outlines suggest the need for a substantial rethinking of Argentina’s anti-money laundering regulations. Based on an analysis of the size of sanctions and the time taken to impose them, the study suggests that the regulatory framework in Argentina fails to comply with the international standards that require the imposition of effective, proportionate and dissuasive sanctions. Findings - This analysis suggests that there are serious issues regarding the regulation of the sanctions that Argentina’s FIU is responsible for imposing. Specifically, the way the exact amount of each fine is determined urgently needs to be redesigned. In other words, the system for establishing fines needs to take the fluctuations that are typical of Argentina’s economy into account. Originality/value - This paper has demonstrated that it is vital for the country to review its regulatory framework for the prevention of money laundering and to effectively apply sanctions when noncompliance is detected. A successful approach to both objectives will contribute to generate and align incentives to improve compliance levels and to fulfill international standards.