The Government was awaiting the verdict of the Financial Action Task Force (FATF), and, as some organizations began to comment, publics related to the process based on the first data of what is happening in Paris around the Mutual Evaluation process, the result was positive: Argentina is not on the gray list.
As explained to Scope public accountant, consultant and international speaker on money laundering prevention Daniel Perrotta, “The solution was political and being okay with the International Monetary Fund (IMF) and with the United States Government it is important for Argentina, beyond how eclectic FATF is.”
What it refers to is that The decisions of the international organization are not always in line with the logic of others, but he assures that it was known that there was “a great chance that he would pass the test and avoid the gray list”, as it happened.
There is optimism in the ruling party
This is also confirmed a source close to the Central Bank (BCRA) when he assures that They are “optimistic”. However, analysts warn that, if the process for Argentina is successful, it will not be free, but rather it will have to make some corrections in the process and The FATF will impose several conditions in return surely.
However, it is well worth it because falling to the gray list would be serious for Argentina at this moment because there is a strong need for dollars and the country wants to return to the international credit market. “If we enter a negative category in the FATF, there will be countries that will not be able to invest in Argentina,” explains economist Christian Buteler in this regard. That, without a doubt, would be an obstacle, for example, for the development of the Incentive Regime for Large Investors (RIGI), which seeks to attract dollars from abroad, as well as for any interest in the country of foreign capital.
How the result will impact: what happens if Argentina enters the gray list
And the economist Federico Glustein adds that “A negative outcome of this evaluation process would be very bad. because the financial system would begin to take measures and actions to mitigate that risk, demand insurance and higher rates.” “That would make access to credit more expensive and would undoubtedly make the outlook more complex between now and the coming months,” he warns.
The key issue is that, as Buteler explains, today, Argentina is already off the radar of many investors. “A very important bet had been made in 2016 for the country and, after 2018, the trust of international capital was completely lost.“, he says. Thus, he considers that there will not be an immediate effect on local markets if Argentina goes to the gray list because many of the investors who are governed by these standards are no longer in the country, but yes, it is bad. for a possible recovery of trust.
The truth, in short, is that, according to Glustein, to bring resources from large companies it is necessary to modify legal guidelines and among others, the criminal code, take measures to prevent money laundering, and the traceability of assets. “To adapt to the demands of the FATF, Argentina requires profound changeswhich already started today, but the process was not completed and we have to see what degree of security the perspective of this path that began gives the market,” he explains.
Source: Ambito
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