Argentina: Scoping study
Overview of recommendations
The recommendations are based on the analysis of the Open Ownership Principles (“the OO Principles”) which are reference criteria for the effective disclosure of data on beneficial ownership, and have been formulated taking into account the technical characteristics of effective BO transparency regimes and not factors external to these such as political, social economic or cultural factors.
These Principles seek to be a tool for assisting governments, international institutions, civil society and private sector actors to understand, promote and implement effective reforms on beneficial ownership. It is a matter of providing a framework of good practices for application of transparency of real ownership of companies, based on reliable data.
The OO Principles are as follows:
- Robust definition: There must be clear and robust definitions of beneficial ownership in the law and low thresholds to determine when ownership and control are to be disclosed.
- Comprehensive coverage: Data should comprehensively encompass all relevant types of legal and natural persons.
- Sufficient detail: BO disclosures should include enough information so that users can understand and use the data.
- A central register: The data should be compiled in a a central register.
- Public access to a central register: The data should be available to the public.
- Structured data: The data should be structured and interoperable.
- Verification: Measures should be taken to verify the data.
- Up-to-date and auditable: Data should be kept up-to-date and stored in historical registers.
- Sanctions and enforcement: Adequate sanctions should exist and be applied for cases of non-compliance.
Robust definition
1. Argentina should have a substantive law establishing a single definition of beneficial ownership for all economic sectors, including extractive industries, to harmonise the existing regulations, setting a single threshold encompassing all possible legal structures.
2. As for the dictates of the law, they should encompass not only technical questions but also practical situations. To this end, it is recommended that this definition be proposed by the Advisory Council of Law Nº 25.246, of which the Financial Intelligence Unit (FIU) is a part. In the future, it is recommended that the FIU itself should be able to modify and/or adapt the definition, based on a proposal drawn up by the Advisory Council.
3. As long as there is no substantive law, it is recommended to proceed with a pilot trial with the extractive industries. This trial would be based on the definition of the Inspector General of Justice (IGJ), adopted in turn by the EITI Multi-Stakeholder Group (MSG) (which, in turn, reflects the rules of the FIU).
Comprehensive coverage
4. With regard to the extractive sectors, in the framework of a pilot trial, the National Mining and Hydrocarbons authorities should modify requirements for registration in the Register of Mining and Hydrocarbons at the federal level, incorporating Resolution Nº 30/2018 of the Secretary of Mining and Provision Nº 337/2019 of the Subsecretary of Hydrocarbons and Fuels that as a condition of access and permanence, registered or interested parties must prove that they have complied in providing BO data in accordance with the definition adopted by the MSG, without exception.
5. For other sectors of the economy, Argentina should have a law that streamlines the criteria of the different public agencies, especially among FIUs and AFIP.
6. For the pilot trial, participation is recommended by some of the provincial entities that belong to EITI and/or those provinces where companies in the mining, gas and oil sector that have been included in EITI operate. In a medium- to long-term scenario, the registers of provincial permits and concessions should be included. It is recommended to address the issue in the setting of the Federal Mining Council and the Federal Hydrocarbons Council, where the provinces are politically represented.
Sufficient detail
7. Currently, it is possible to proceed with the pilot trial in the extractive industries implementing the obligation to require information on beneficial ownership as a condition for registering in the registers of mining and hydrocarbons (see Point 4 of the Overview of Recommendations). In order to have compliance in a simple and immediate form, and until there are other overriding mechanisms, companies should present to the authorities of Mining and Hydrocarbons a sworn statement that they have filed with the IGJ (with headquarters in the Autonomous City of Buenos Aires) or a sworn statement on beneficial ownership that they have filed with the AFIP, as the case may be.
8. To enhance compliance with this principle, on the IGJ declaration form, they should fill out other fields that increase the level of detail in the data on ultimate beneficial owners, the entities in question, and above all, what are the means through which the property is maintained or control is exercised.
9. To proceed gradually with data interoperability, the BO information should be included as an additional field in the National Corporate Registry (NCR) making it possible for both the general public as well as the competent agencies to search them online (including the provinces). The agencies, in turn, would be able to verify data faster without the need to require companies to do what is indicated in Point 7.
Central register
10. In the pilot trial, in the rules on mining and hydrocarbons, the following should be required: Prove that the BO information is filed with the respective company register based on registration (the IGJ or those provinces that have incorporated beneficial ownership transparency as a requirement) or provide the sworn statements filed with AFIP where the BO data is supplied, as the case may be.
In parallel, with the advance of the pilot trial, centralisation in the NCR of BO data for the extractive sector should be sought. In this way, it would be the only centralised data source at the federal level.
11. The evolution of the pilot trial and its results should be taken into account to remove obstacles in keeping with the dictates of a substantive law applicable to all sectors.
Public access to a central register
12. In the first phase, the execution of the pilot trial with the extractive industries will make it possible to proceed with the information of parties interested in registering and/or those who have already registered in the special registers for mining and hydrocarbons. These registers, by their nature, are public and freely accessible for public consultation, although currently they are not available online. In the pilot trial – until better arrangements are in place – data may be published on the websites of the enforcement authorities as open data.
13. Gradually, data centralisation should proceed at the NCR since company records are public, and subject to public access, pursuant to the legislation in force in Argentina (Article 3 of Law Nº 26.047 and 9 of Law Nº 19.550). The information should be accessible online for agencies in accordance with their competencies, and for the general public, in accordance with the legal conditions that allow it. This application should be tested as the pilot trial goes forward.
14. In a scenario of maximum application, a substantive law applicable to all sectors should include purposes, causes, mechanisms, opportunities and ways of instrumentalizing the disclosure of BO data. In particular, exceptions for fiscal secrecy should be included, among other matters.
Structured data
15. Data to be published should be available in a structured and interoperable format. In the development of the BO register, it is recommended to adopt the specific guidance in Relational database design considerations for beneficial ownership information, which focuses on requirements for the publication of data to comply with the Beneficial Ownership Data Standard (BODS).
Verification
16. Systems should be established that guarantee that data is reliable, and they should include: a) automatic validation in authentication and loading processes that neutralise incorrect data and do not allow it to load; b) the possibility of reporting errors and inconsistencies by the general public as long as whoever is making a report has legally obtained the information that they are using to make the correction, and c) automatic verification and/or cross checking of data between agencies.
Up to date and auditable
17. In the pilot trial a modification of criteria for updating the regulations in force concerning regimes for extractive industries should be included. At present changes have to be reported annually. Nevertheless, in light of the possibility of changes occurring more frequently, it is recommended to amend the regulation to establish that all changes should be reported on the fifteenth day (or similar interval) after they have taken place. And accordingly, compliance should be strictly enforced.
18. If a substantive law is promulgated, it should include a uniform manner of updating BO information, and consistent frequency for all agencies concerned.
Sanctions and enforcement
19. In amending the rules for requiring BO disclosure in the pilot trial, it is recommended to include a restriction on appearing in Registers and the use of benefits available therein for anyone who fails to comply with the requirement to report BO information.
20. It is recommended to publish a list of those who fail to comply with disclosure regimes, and to work in coordination with other agencies to keep information up-to-date.
21. In the event that a substantive law is promulgated, specific sanctions should be established, whose enforcement must then be coordinated with the Judicial Branch and the Public Prosecutor’s Office.