Argentina
This report analyses the implementation of the AEOI Standard in Argentina with respect to the requirements of the AEOI Terms of Reference. It assesses both the legal frameworks put in place to implement the AEOI Standard and the effectiveness of the implementation of the AEOI Standard in practice.
The methodology used for the peer reviews and that therefore underpins this report is outlined in Chapter 2.
Overall findings
AEOI legal framework
Argentina’s legal framework implementing the AEOI Standard is in place but needs improvement in order to be fully consistent with the requirements of the AEOI Terms of Reference. While Argentina’s international legal framework to exchange the information with all of Argentina’s Interested Appropriate Partners (CR2) is consistent with the requirements, its domestic legislative framework requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (CR1) has deficiencies significant to the proper functioning of elements of the AEOI Standard. More specifically, Argentina’s legal framework has deficiencies related to the scope of Reporting Financial Institutions and the due diligence procedures to identify Reportable Accounts. Moreover, Argentina’s domestic legal framework does not impose sanctions on Account Holders and Controlling Persons for the provision of a false self-certification.
Overall determination on the legal framework: In Place But Needs Improvement
Effectiveness of AEOI in practice
Argentina’s implementation of the AEOI Standard is partially compliant with the requirements of the AEOI Terms of Reference to ensure the effectiveness of the AEOI Standard in practice. While Argentina is on track with respect to exchanging the information in an effective and timely manner (CR2), there are significant issues with respect to ensuring that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures (CR1).
Overall rating in relation to the effectiveness in practice: Partially Compliant
General context
Argentina commenced exchanges under the AEOI Standard in 2017.
In order to provide for Reporting Financial Institutions to collect and report the information to be exchanged, Argentina:
enacted the AFIP General Resolution No. 4.056/2017, that replaced the AFIP General Resolution 3.826/2015, and its amendments, including the AFIP General Resolution No. 4.422/2019 and the AFIP General Resolution 4.888/2020;
Under this framework Reporting Financial Institutions were required to commence the due diligence procedures in relation to New Accounts from 1 January 2016. With respect to Preexisting Accounts, Reporting Financial Institutions were required to complete the due diligence procedures on High Value Individual Accounts by 31 December 2016 and on Lower Value Individual Accounts and Entity Accounts by 31 December 2017.
Following the initial Global Forum peer review, Argentina made various amendments to its legislative framework to address issues identified, the last of which was effective from 23 December 2020.
With respect to the exchange of information under the AEOI Standard, Argentina is a Party to the Convention on Mutual Administrative Assistance in Tax Matters and activated the associated CRS Multilateral Competent Authority Agreement in time for exchanges in 2017.
Table 1 sets out the number of Financial Institutions in Argentina that reported information on Financial Accounts in 2021 as defined in the AEOI Standard (essentially because they maintained Financial Accounts for Account Holders, or that were related to Controlling Persons, resident in a Reportable Jurisdiction). It also sets out the number of Financial Accounts that they reported in 2021. In this regard, it should be noted that Argentina requires the reporting of Financial Accounts held by all non-residents and some accounts may be required to be reported more than once (e.g. jointly held accounts or accounts with multiple related Controlling Persons), which is reflected in the figures below. These figures provide key contextual information to the development and implementation of Argentina’s administrative compliance strategy, which is analysed in the subsequent sections of this report.
Table 2 sets out the number of exchange partners to which information was successfully sent by Argentina in the past few years (including where the necessary frameworks were in place, containing an obligation on Reporting Financial Institutions to report information, but no relevant Reportable Accounts were identified). These figures provide key contextual information in relation to Argentina’s exchanges in practice, which is also analysed in subsequent sections of this report.
In order to provide for the effective implementation of the AEOI Standard, in Argentina:
the Federal Administration of Public Revenue (AFIP) (the tax authority) has the responsibility to ensure the effective implementation of the due diligence and reporting obligations by Reporting Financial Institutions and for exchanging the information with Argentina’s exchange partners;
technical solutions necessary to receive and validate the information reported by Reporting Financial Institutions were put in place by requiring Reporting Financial Institutions to report information through two options: the sworn statement and payment submission system or the sworn statement filing – taxpayer profile system. Argentina validates the CRS information submitted by Financial Institutions by performing several systemic validations against the XML Schema; and
the Common Transmission System (CTS) is used for the exchange of the information, along with the associated file preparation and encryption requirements.
It should be noted that the review of Argentina’s legal frameworks implementing the AEOI Standard concluded with the determination that Argentina’s domestic legal framework is In Place But Needs Improvement and its international legal framework is In Place. This has been taken into account when reviewing the effectiveness of Argentina’s implementation of the AEOI Standard in practice.
Findings and conclusions on the legal frameworks
The detailed findings and conclusions on the AEOI legal frameworks for Argentina are below, organised per Core Requirement (CR) and sub-requirement (SR), as extracted from the AEOI Terms of Reference (see Annex C).
CR1 Domestic legal framework: Jurisdictions should have a domestic legislative framework in place that requires all Reporting Financial Institutions to conduct the due diligence and reporting procedures in the CRS, and that provides for the effective implementation of the CRS as set out therein.
Determination: In Place But Needs Improvement
Argentina’s domestic legislative framework is in place and contains most of the key aspects of the CRS and its Commentary requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures, but it needs improvement in relation to the scope of Reporting Financial Institutions required to report information (SR 1.1), the due diligence procedures required to identify Reportable Accounts (SR 1.2) and the framework to enforce the requirements (SR 1.4). More specifically, Argentina’s legal framework provides for a jurisdiction-specific Non-Reporting Financial Institution that does not meet the requirements, does not fully incorporate the due diligence procedures for the purposes of identifying if a Controlling Person of a Passive NFE is a Reportable Person and does not impose sanctions on Account Holders and Controlling Persons for the provision of false self-certifications.
SR 1.1 Jurisdictions should define the scope of Reporting Financial Institutions consistently with the CRS.
Argentina has defined the scope of Reporting Financial Institutions in its domestic legislative framework in a manner that is largely consistent with the CRS and its Commentary. However, deficiencies have been identified. More specifically, Argentina provides for a jurisdiction-specific Non-Reporting Financial Institution that is not in accordance with the requirements. The definition of Reporting Financial Institution, including the provision of Non-Reporting Financial Institutions, is material to the proper functioning of the AEOI Standard.
Argentina should amend its domestic legislative framework to remove the Marketable Securities Broker Agent from its jurisdiction-specific list of Non-Reporting Financial Institutions as it is a Non-Financial Entity and should therefore be treated as such under the AEOI Standard.
SR 1.2 Jurisdictions should define the scope of Financial Accounts and Reportable Accounts consistently with the CRS and incorporate the due diligence procedures to identify them.
Argentina has defined the scope of the Financial Accounts that are required to be reported in its domestic legislative framework and incorporated the due diligence procedures that must be applied to identify them in a manner that is largely consistent with the CRS and its Commentary. However, a deficiency has been identified. More specifically, Argentina does not specify that Reporting Financial Institutions may only rely on a self-certification by the Account Holder or its Controlling Person for the purposes of determining whether the Controlling Person is a Reportable Person.
Argentina should amend its domestic legislative framework to specify that, for New Entity Accounts, Reporting Financial Institutions may only rely on a self-certification provided by a Passive NFE Account Holder or its Controlling Person to determine whether the Controlling Person is a Reportable Person.
SR 1.3 Jurisdictions should incorporate the reporting requirements contained in Section I of the CRS into their domestic legislative framework.
Argentina has incorporated the reporting requirements in its domestic legislative framework in accordance with the CRS and its Commentary.
SR 1.4 Jurisdictions should have a legislative framework in place that allows for the enforcement of the requirements of the CRS in practice.
Argentina has a legislative framework in place to enforce the requirements in a manner that is largely consistent with the CRS and its Commentary. However, a deficiency has been identified. More specifically, Argentina’s legislative framework does not impose sanctions for the provision of false self-certifications by Account Holders and Controlling Persons. This is a key element of the required enforcement framework and is therefore material to the proper functioning of the AEOI Standard.
Argentina should amend its domestic legislative framework to include sanctions on Account Holders and Controlling Persons for the provision of a false self-certification.
CR2 International legal framework: Jurisdictions should have exchange relationships in effect with all Interested Appropriate Partners as committed to and that provide for the exchange of information in accordance with the Model CAA.
Argentina’s international legal framework to exchange the information is in place, is consistent with the Model CAA and its Commentary and provides for exchange with all of Argentina’s Interested Appropriate Partners (i.e. all jurisdictions that are interested in receiving information from Argentina and that meet the required standard in relation to confidentiality and data safeguards) (SRs 2.1 – 2.3).
SR 2.1 Jurisdictions should have exchange agreements in effect with all Interested Appropriate Partners that permit the automatic exchange of CRS information.
Argentina has exchange agreements that permit the automatic exchange of CRS information in effect with all its Interested Appropriate Partners.
SR 2.2 Such an exchange agreement should be put in place without undue delay, following the receipt of an expression of interest from an Interested Appropriate Partner.
Argentina put in place its exchange agreements without undue delay.
SR 2.3 Jurisdictions should ensure that the exchange agreements in effect provide for the exchange of information in accordance with the requirements of the Model CAA.
Argentina exchange agreements provide for the exchange of information in accordance with the requirements of the Model CAA.
Findings and conclusions in relation to effectiveness in practice
The detailed findings and conclusions in relation to effectiveness in practice of AEOI for Argentina are below, organised per Core Requirement (CR) and then per sub-requirement (SR) as extracted from the AEOI Terms of Reference (see Annex C).
CR1 Effectiveness in practice: Jurisdictions should ensure that in practice Reporting Financial Institutions correctly implement the due diligence and reporting procedures, which includes a requirement for jurisdictions to have in place an administrative framework to ensure the effective implementation of the CRS.
Argentina’s implementation of the AEOI Standard is partially compliant with respect to ensuring that Reporting Financial Institutions are correctly conducting the due diligence and reporting procedures. More specifically, while Argentina is meeting expectations with respect to collaboration with its exchange partners to ensure effectiveness (SR 1.6), there are significant issues with respect to ensuring effectiveness in a domestic context, such as through having an effective administrative compliance framework and related procedures (SR 1.5). Argentina should continue its implementation process to ensure its effectiveness, including by addressing the recommendations made.
SR 1.5 Jurisdictions should ensure that in practice Reporting Financial Institutions identify the Financial Accounts they maintain, identify the Reportable Accounts among those Financial Accounts, as well as their Account Holders, and where relevant Controlling Persons, by correctly conducting the due diligence procedures and collect and report the required information with respect to each Reportable Account. This includes having in place:
an effective administrative compliance framework to ensure the effective implementation of, and compliance with, the CRS. This framework should:
be based on a strategy that facilitates compliance by Reporting Financial Institutions and which is informed by a risk assessment in respect of the effective implementation of the CRS that takes into account relevant information sources (including third party sources);
include procedures to ensure that Financial Institutions correctly apply the definitions of Reporting Financial Institutions and Non-Reporting Financial Institutions;
include procedures to periodically verify Reporting Financial Institutions’ compliance, conducted by authorities that have adequate powers with respect to the reviewed Reporting Financial Institutions, with procedures to access the records they maintain; and
effective procedures to ensure that Financial Institutions, persons or intermediaries do not circumvent the due diligence and reporting procedures;
effective enforcement mechanisms to address non-compliance by Reporting Financial Institutions;
strong measures to ensure that valid self-certifications are always obtained for New Accounts;
effective procedures to ensure that each, or each type of, jurisdiction-specific Non-Reporting Financial Institution and Excluded Account continue to present a low risk of being used to evade tax; and
effective procedures to follow up with a Reporting Financial Institution when undocumented accounts are reported in order to establish the reasons why such information is being reported.
In order to ensure that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures, Argentina implemented many of the requirements in accordance with expectations. However, significant issues were identified. The key findings were as follows:
Argentina implemented a strategy to ensure compliance with the AEOI Standard. Argentina has performed communication activities, such as publishing information and answers to Frequently Asked Questions that are relevant to Financial Institutions. The AFIP has also held meetings with various industry associations to discuss different aspects of the implementation of the AEOI Standard.
Argentina bases its compliance strategy on a risk assessment that focuses on the information reported by Reporting Financial Institutions, utilising the system it developed to automatically validate the information reported, information received from partner jurisdictions, and information obtained from industry associations.
Argentina has worked effectively to understand its population of Financial Institutions, including relevant non-regulated entities, developing a framework for the AFIP to obtain lists of Financial Institutions from the regulatory authorities (the Central Bank (BCRA), the National Securities Commission (CNV) and the Superintendence of Insurance of the Nation (SSN)) on a yearly basis. The AFIP also cross-checks the Foreign Financial Institution list for FATCA purposes and a list of trusts it has available. After the matching exercises, Argentina identified Financial Institutions that should have been classified as Reporting Financial Institutions and it is taking the corresponding actions. Argentina is therefore taking action to ensure that Reporting Financial Institutions are classifying themselves correctly under its domestic rules and reporting information as required. Argentina intends to keep its understanding of its Financial Institution population up to date on a routine basis.
Argentina has developed an internal General Instruction to establish the procedures to carry out auditing activities related to the AEOI Standard and has amended its domestic legal framework to require Reporting Financial Institutions to document their internal controls to comply with the due diligence and reporting obligations under the AEOI Standard. These documents should be made available to the AFIP upon request. So far, Argentina has accessed the policies and procedures of several Reporting Financial Institutions, based on which it will access the underlying account records to verify compliance. It has already accessed the underlying records of one Reporting Financial Institution and plans to access others in the near future.
In terms of resourcing, the AFIP has assigned resources to perform the communicational activities, the validation of the information received from the Reporting Financial Institutions and the exchanges. Three full time staff have been assigned and trained to request policies and procedures from the Reporting Financial Institutions and analyse them to inform the compliance strategy. Furthermore, two full time staff have been assigned to carry out the onsite audits performed by the AFIP, as well as the audits that will be carried out jointly with the Financial Intelligence Unit, which also consider relevant elements of the AEOI Standard.
Argentina plans to ensure that self-certifications are obtained as required, although the details of the specific activities that will be conducted are unclear. Furthermore, although Argentina plans to identify the undocumented accounts reported by Reporting Financial Institutions, the details of the follow-up activities are not yet fully defined.
Argentina has a plan to ensure that the interaction between Argentina’s CRS and AML frameworks always results in the identification of Controlling Persons in accordance with the AEOI Standard, as it will be reviewed as part of the audits that will be carried out.
Argentina appears to have developed procedures to enforce the requirements, including the application of penalties and sanctions for non-compliance when it is identified. Argentina has also drafted amendments to its domestic legal framework to incorporate sanctions specific to non-compliance with the requirements of the AEOI Standard, which are in the process of approval. Argentina has initiated the administrative process to impose penalties to some Reporting Financial Institutions that have not provided the policies and procedures requested by the AFIP.
Argentina does not seem to have a plan to take action to address circumvention of the requirements when such circumvention is detected.
Argentina plans to keep its jurisdiction-specific lists of Non-Reporting Financial Institutions and Excluded Accounts under review to ensure they continue to pose a low risk of being used for tax evasion purposes.
Table 3 provides a summary of the specific activities undertaken, or that are planned to be undertaken, in relation to each of the key parts of the framework described above.
With respect to the Financial Account information collected and sent by Argentina, the presence of the key data points of the Tax Identification Numbers and dates of birth appeared to be in line with most other jurisdictions.
Information provided by Argentina showed a higher number of undocumented accounts reported by its Reporting Financial Institutions, when compared to other jurisdictions, which should only occur when it is not possible for the Reporting Financial Institutions to identify whether the accounts are held by Reportable Persons. The number of undocumented accounts has reduced over time. Follow-up discussions confirmed that Argentina is aware of this issue.
One exchange partner noted that a number of financial accounts that were reported in previous exchange cycles were not reported by Argentina in the 2021 exchange cycle. Follow-up discussions confirmed that Argentina is aware of the issue and seeking to improve the situation. More generally, many of the exchange partners that received a significant number of records from Argentina indicated that they achieved a success rate when matching the information received from Argentina with their taxpayer database that was broadly equivalent to, or better than, what they usually achieve.
Based on these findings it was concluded that Argentina is partially meeting expectations in ensuring that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures, including by having in place the required administrative compliance framework and related procedures. More specifically, significant issues have been identified, including with respect to the extent of the compliance activities carried out to date and the lack of detailed plans to review some key elements as part of the compliance strategy. Argentina should therefore continue its implementation process accordingly, including by addressing the recommendations made.
Argentina should actively monitor and verify whether Reporting Financial Institutions are obtaining valid self-certifications as required, including ensuring that self-certifications contain all required information.
Argentina should put in place a clearly defined policy to ensure that, where circumvention of the AEOI Standard is identified, action is taken to address it.
Argentina should put in place and implement a clearly defined policy to follow up with Reporting Financial Institutions that report undocumented accounts to ensure the requirements are being complied with.
SR 1.6 Jurisdictions should collaborate on compliance and enforcement. This requires jurisdictions to:
use all appropriate measures available under the jurisdiction’s domestic law to address errors or non-compliance notified to the jurisdiction by an exchange partner; and
have in place effective procedures to notify an exchange partner of errors that may have led to incomplete or incorrect information reporting or non-compliance with the due diligence or reporting procedures by a Reporting Financial Institution in the jurisdiction of the exchange partner.
In order to collaborate on compliance and enforcement, it appears that Argentina implemented all of the requirements in relation to issues notified to them (i.e. under Section 4 of the MCAA or equivalent) in accordance with expectations. While no such notifications have yet been received, Argentina has the necessary systems and procedures to process them as required. Argentina appears to have an understanding that exchange partners should be notified effectively of errors or suspected non-compliance it identifies when utilising the information received.
Based on these findings it was concluded that Argentina is fully meeting expectations in relation to collaborating with its exchange partners to ensure that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures. Argentina is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
CR2 Effectiveness in practice: Jurisdictions should exchange the information effectively in practice, in a timely manner, including by sorting, preparing, validating and transmitting it in accordance with the AEOI Standard.
Argentina’s implementation of the AEOI Standard is on track with respect to exchanging the information effectively in practice, including in relation to sorting, preparing and validating the information (SR 2.4), most of the requirements in relation to correctly transmitting the information in a timely manner (SRs 2.5 – 2.8) and providing corrections, amendments or additions to the information (SR 2.9). However, some issues were found with respect to the sending of status messages (SR 2.8). Argentina is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
SR 2.4 Jurisdictions should sort, prepare and validate the information in accordance with the CRS XML Schema and the associated requirements in the CRS XML Schema User Guide and the File Error and Correction-related validations in the Status Message User Guide (i.e. the 50000 and 80000 range).
Feedback from Argentina’s exchange partners did not raise any specific concerns with respect to their ability to process the information received from Argentina and therefore with respect to Argentina’s implementation of these requirements. More generally, two (or 3%) of Argentina’s exchange partners reported rejecting 50% or more of the files received, due to the technical requirements not being met. This is broadly in line with the general experience of other jurisdictions. It was noted that Argentina has already successfully addressed all of the issues.
Based on these findings it was concluded that Argentina is fully meeting expectations in relation to sorting, preparing and validating the information. Argentina is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
SR 2.5 Jurisdictions should agree and use, with each exchange partner, transmission methods that meet appropriate minimum standards to ensure the confidentiality and integrity of the data throughout the transmission, including its encryption to a minimum secure standard.
In order to put in place an agreed transmission method that meets appropriate minimum standards in confidentiality, integrity of the data and encryption for use with each of its exchange partners, Argentina linked to the CTS.
Based on these findings it was concluded that Argentina is fully meeting expectations in relation to agreeing and using appropriate transmission methods with each of its partners. Argentina is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.6 Jurisdictions should carry out all exchanges annually within nine months of the end of the calendar year to which the information relates.
Feedback from Argentina’s exchange partners did not raise any concerns with respect to timeliness of the exchanges by Argentina and therefore with respect to Argentina’s implementation of this requirement.
Based on these findings it was concluded that Argentina is fully meeting expectations in relation to exchanging the information in a timely manner. Argentina is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.7Jurisdictions should send the information in accordance with the agreed transmission methods and encryption standards.
Feedback from Argentina’s exchange partners did not raise any concerns with respect to Argentina’s use of the agreed transmission methods and therefore with Argentina’s implementation of this requirement.
Based on these findings it was concluded that Argentina is fully meeting expectations in relation to sending the information in accordance with the agreed transmission methods and encryption standards. Argentina is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.8 Jurisdictions should have the systems in place to receive information and, once it has been received, should send a status message to the sending jurisdictions in accordance with the CRS Status Message XML Schema and the related User Guide.
Five exchange partners highlighted delays in the sending of status messages by Argentina, representing 5% of its partners. This represents a relatively high proportion of partners and has not improved over time. For the 2021 exchanges, Argentina noted that it experienced issues with the implementation of a system to perform automatic matching that had impacted the sending of status messages. The implementation of this system has been concluded and the issues with sending status messages have been solved. Argentina has also successfully addressed most of the issues raised by peers, including issues related to previous exchange cycles, and is working to resolve the remaining issues.
Based on these findings it was concluded that, overall, Argentina is meeting expectations in relation to the receipt of the information. It was also noted that there is room for improvement with respect to the sending of status messages in a timely manner. Argentina is encouraged to continue to ensure the ongoing effectiveness of its implementation, including by addressing the recommendation made.
Argentina should continue to engage with its exchange partners to address the issues raised.
SR 2.9 Jurisdictions should respond to a notification from an exchange partner as referred to in Section 4 of the Model CAA (which may include Status Messages) in accordance with the timelines set out in the Commentary to Section 4 of the Model CAA. In all other cases, jurisdictions should send corrected, amended or additional information received from a Reporting Financial Institution as soon as possible after it has been received.
Argentina appears ready to respond to notifications and to provide corrected, amended or additional information in a timely manner and no such concerns were raised by Argentina’s exchange partners and therefore with respect to Argentina’s implementation of these requirements.
Based on these findings it was concluded that Argentina appears to be meeting expectations in relation to responding to notifications from exchange partners and the sending of corrected, amended or additional information. Argentina is encouraged to continue to ensure the ongoing effectiveness of its implementation.
Assessed jurisdiction’s comments on the assessment of effectiveness in practice
Argentina is fully aware of the importance of sending information of quality to all its partners in the automatic exchange of financial account information of non-residents. In line with this, we are implementing innumerable actions to achieve a high-quality level of information, such as specific regulations to ensure effective compliance, regular meetings with associations and entities subject to reporting, systemic improvements, desk-based and onsite audits, among others.
We have also concluded cooperation agreements with the Financial Information Unit and the Superintendence of Insurance of the Nation, which are currently in force.
In addition to the aforementioned, it is important to highlight the fact that we have already launched the onsite audits foreseen in the Annual Auditing Plan, which will grant us access to all the records held by Financial Institutions.
Argentina is fully committed to the AEOI and will continue fostering and implementing all the necessary actions to comply with the requirements of the Standard and provide high-quality information to all partners.