Saturday, November 26

Vallejos presented project to register the beneficiaries of shell companies

Vallejos defined the details of the proposal within the framework of the opening of the 7th dialogue session “Final Beneficiaries in Argentina, Latin America and the World and their link with tax evasion and avoidance, corruption and money laundering”, organized by Fundación SES, the Latin American Network for Economic and Social Justice (LATINDADD), the Financial Transparency Coalition, with the support of the Tax Justice Network and the Latin American Tax Justice Network, which took place today through the zoom platform.

In the foundations of this initiative it is clearly explained that “the identification of the final beneficiaries of the companies represents one of the main tools to combat illicit financial flows related to tax evasion, money laundering, corruption, drug trafficking, human trafficking, and various human rights violations ”. Vallejos also warns that “without policies on transparency regarding the final beneficiaries, economic crime can hide behind legal vehicles of any kind.”

Vallejos’ project consists of 13 articles, of which one of them is of form.

The first expressly defines that the National Registry of Final Beneficiaries will depend on the Ministry of Justice and Human Rights of the Nation and will have the “purpose of keeping a centralized and updated registry of the final beneficiaries of every legal person and / or legal structure, national and / or foreigner operating in the country ”.

In the category of final beneficiary, the Vallejos initiative encompasses human persons who have at least “10% of the capital or voting rights of a legal person, a trust and / or any other legal structure; and / or the human person / s who by other means exercise / n the final control of the same ”. However, immediately afterwards it specifies that “final control shall be understood to be that exercised, directly or indirectly, by one or more human persons through a chain of ownership and / or through any other means of control and / or when, due to circumstances de facto or right, the / s themselves have the power to conform by themselves the social will for decision-making by the governing body of the legal person or legal structure and / or for the appointment and / or removal of members of the administration body of the same ”. Likewise, it underlines that “when it is not possible to individualize those human person (s) who have the condition of Final Beneficiary”, the responsibility of final beneficiary will fall on the “human person who is in charge of the direction, administration or representation of the legal person, trust, and / or legal structure ”, as appropriate.

Meanwhile, in the case of trusts or legal structures with similar national or foreign characteristics, “the final beneficiaries of each of the parties to the contract must be identified.” In December of last year, the United States Senate and House of Representatives passed the National Defense Authorization Act, which became law on January 1, 2021 and includes an anti-Money Laundering rule, recognized by its acronym AML and a second one for Corporate Transparency (CTA), which will require corporations, limited liability companies and the like to provide information on their final beneficiaries.

Vallejos’s proposal states that “recent mega-leaks of financial information have exposed the widespread (ab) use of complex corporate structures. Panama Papers, Swiss Leaks, Paradise Papers, Bahamas Leaks or Luxleaks revealed the existence of an industry dedicated to setting up various corporate structures made up of multi-jurisdictional frameworks that include companies in tax hideouts and opaque jurisdictions with the aim of hiding the identity of the real ones. business owners and exploit gray areas in the legislation ”.

In article 4, the draft explicitly states that the subjects obliged to provide information to the Registry of Final Beneficiaries “will all be human persons, legal entities, and / or legal structures, such as trusts or common investment funds, on which it falls or The duty to declare the Final Beneficiary (s) may fall before the different bodies that make up the centralized National Public Administration, the Decentralized and Decentralized Bodies and the Public Bodies with financial autarky, the non-state public entities and before the provincial bodies that require it. “-

An outstanding fact is that article 7 of the project warns that the information of the National Registry of Final Beneficiaries will be public and will be freely accessible “through computer means”, in addition that “it will be published proactively in open data format on the pages Official institutional websites of the Ministry of Justice and Human Rights, in accordance with the right of access to public information, regulated by Law 27,275 and the Personal Data Protection Law no. 25,326 “. However, the clarification that exempts from the publication “the information referring to the DNI, nationality, real address, telephone, email, marital status, profession, PEP status of the Final Beneficiary, data that may be provided only at the request of another organism of the State or by judicial request ”. In addition, the project provides for the creation of an “advisory body” made up of a representative of the Ministry of Justice and Human Rights, a representative of the Financial Information Unit (UIF), a representative of the AFIP, two representatives of two jurisdictions, from the Judicial Power and the Public Ministry, a representative of civil society, a representative of the university sector and two representatives selected by the provincial registries, “who will rotate annually.” The purpose of this Committee is to prepare technical proposals and suggestions aimed at improving the functioning of the Registry, tasks that will be carried out ad honorem.

On the basis of the proposal, Vallejos recognizes that Argentina “has taken important steps in the collection of information on the final beneficiaries” but immediately warns that “the availability, practicality and access to such information is still difficult, either for technological reasons. , due to the lack of clear regulations and above all due to the lack of a single and national registry that centralizes the information of the final beneficiaries of all national and foreign legal entities and structures registered in the country. Finally, the deputy Kirchnerista also warns that “the legislation on the identification of the final beneficiaries of the companies in Argentina is conditioned by the fragmentation, outdatedness and absence of verification of the provincial registries, as well as those kept by the different control organisms ”.

In the same vein, the Inter-American Development Bank (IDB), through a report by the specialist Andrés Knobel, entitled “Regulation on Final Beneficiaries in Latin America”, makes different observations on the policy of final beneficiaries in Argentina. Among them, it stands out that “the competent authorities do not have timely access to adequate, accurate and updated information on the Final Beneficiaries of legal persons because” there is still no functional national registry of legal persons “and that” the records are kept separately for the city of Buenos Aires and the 23 provinces ”. In addition, Knobel emphasizes that “the provincial registries do not contain updated information” and the provincial control authorities have a limited capacity to obtain it “. These are just some of the objections raised by the IDB and that the passage of the Vallejos law would allow it to be corrected.