Argentina Money Laundering Attorney: Argentina Tax Amnesty Laundering Free Pass, Opposition Says

Argentina Money Laundering Attorney

Argentina’s lower house of congress is debating today legislation that pardons tax dodgers who spend undeclared funds in either the building sector or in connections to fund increased oil and gas production.

While the federal government states the amnesty intends to bring component of the $160 billion concealed from the authorities in to the legal economy, opposition legislators say the supply is a carte blanche for drug supplier and various other crooks to launder money.

“We are starting the course of a narco economic situation,” said resistance Senator Liliana Negre de Alonso in a telephone interview, before the start these days’s dispute. “It’s totally immoral. The federal government doesn’t appreciate the means to reach its objective– increase additional investment.”.

The expense, which will probably be gone by President Cristina Fernandez de Kirchner’s majority union today, mirrors her demand for funds to finance YPF SA, the oil producer she seized a year back on promises to broaden output and minimize power imports, stated resistance legislator Federico Pinedo. The government took possession of 51 percent of YPF last year from Spain’s Repsol SA to stem fuel imports that doubled to $9.4 billion in 2011 and are anticipated to increase to as long as $15 billion this year.

The scarcity of dollars in the Argentine economic climate and Fernandez’s partial restriction on their investment has actually crushed the real property market, nearly halving home sales given that she started to tighten up currency controls to stem record resources flight in 2011.

Dollar Purchases.

Under the amnesty, Argentines with undeclared foreign-currency cost savings will certainly have the ability to purchase dollar bonds to fund raised power manufacturing, or a dollar-denominated central bank certificate that can be utilized to acquire realty or structure products. Property offers are generally carried out in the U.S. money in Argentina.

Those accepting the amnesty will not need to pay past-due taxes or describe the beginning of the funds. The power connection pays 4 percent passion and matures in 2016.

The bill was approved by the Senate on Might 22.

In 2009, concerning $4 billion of concealed money was stated to the authorities under a law that allowed savers to whitewash funds by paying a tax of as long as 8 percent. Baseding on replacement Economy Minister Axel Kicillof, Argentines held concerning $160 billion in undeclared funds in 2006, of which $120 billion had actually been channelled into foreign savings account.

Violence, Laundering.

The Financial Activity Activity Pressure, a Paris-based intergovernmental cash laundering guard dog, in February consisted of Argentina, Zimbabwe, Afghanistan, Cuba and Bolivia in a listing of nations that required stricter controls and sanctions to fight cash laundering and funding of terrorism.

Although lawmakers from Fernandez’s judgment Triumph Front union claim they have carried out steps to comply with all the FATF needs, Negre de Alonso claimed the bill contradicts those needs.

Argentina’s anti – money-laundering workplace and tax firm will certainly keep policies of reporting any type of suspicious funds, Triumph Front Senator Anibal Fernandez stated during the May 22 argument.

“Examinations will be made into just what folks that revive funds do for a living,” Statesman Fernandez said. “The Financial Library and the tax firm have a control system that will be quite hard to avoid.”.

Paid back Dollars.

The federal government has vowed that those who turn over bucks in exchange for the bonds will be paid back in greenbacks when they develop.

Property purchases in Buenos Aires dropped 48 percent in the first quarter of this year from the same period two years previously, baseding on the capital’s college of public notaries. Building task has gotten in 11 of the YEAR to March, government information show.

“The plan does not have a target of improving tax earnings or boost reserve bank reserves,” reserve bank Head of state Mercedes Marco del Pont shared on Might 7.

Concerned that 24 percent yearly rising cost of living, a broadening deficit spending and declining central bank reserves would oblige the government to devalue the peso, Argentines took $21.5 billion out of South The united state’s second-biggest economic situation in 2011.

Within days of her re-election in October that year, Fernandez started to tighten up money controls, consisting of limitations on reward remittances abroad, taxes on overseas use of credit report and debit cards and a restriction on dollar purchases for savings. While her measures reduced capital outflows to $3.4 billion in 2012, reserve bank reserves, which she uses to pay the country’s overseas debt, continued to decrease, reaching $38.7 billion on May 28 from a document $52.6 billion in January 2011.

‘Desperate Move’.

The amnesty is “a hopeless move by the government in an attempt to return a come by reserves,” stated Juan Pablo Fuentes, a financial expert at Moody’s Analytics Inc. “They will not have much success in reviving resources considering that the major trouble is the lack of confidence in the federal government.”.

Argentina’s history of federal government horning in cost savings has actually induced many of the country’s 40 million citizens to send cash abroad, put it in bank protection down payments boxes or hide it in their houses. Savers are worried they could see a repeat of 2002, when then-President Eduardo Duhalde changed buck deposits in to pesos, which weakened as long as 70 percent versus the UNITED STATE money that year. In 2008, Fernandez took regarding $24 billion held in exclusive pension funds and handed the cash to the national social safety agency.

“This costs develops a window for those who took money abroad to bring it back,” Carlos Heller, a legislator from the ruling union, said in a telephone meeting. “It’s a costs that has a harsh preference because it gives an advantage to somebody which hasn’t followed the regulation. But this will certainly also aid all of society by getting additional investment for electricity and construction.”.

The proven Buenos Aires – Argentina Argentina Money Laundering Attorney professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Money Laundering in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Argentina Money Laundering Attorney.

The currency exchange controls had practically frozen the real estate market in Buenos Aires City

Buenos Aires Herald

By: Martín Gambarotta

Out of dollars? Five officials have a plan

Argentina, like Australia, is the land down under. But Argentina, as V.S. Naipaul once wrote, is also the land made for plunder. Voilà: you live down under in the land of plunder. There’s nothing new about this. Old V.S. said as much way back when. But it’s good to keep that impression in mind as you navigate the news of the day. There are, after all, new suspicions of plundering. The public works tycoon Lázaro Báez, who amassed a fortune in the Patagonian province of Santa Cruz that was ruled in the nineties by the late former president Néstor Kirchner, has been charged with money-laundering. Báez and five others, including his son, are under investigation — meaning that they have not been indicted. Yet already things are happening. On Friday, the head of the state-run energy company ENARSA, Exequiel Espinosa, quit amid allegations that he was connected to Báez’s dealings. Espinosa’s resignation is possibly linked to the Báez case. But the outgoing head of ENARSA, a company involved in the bulk import of fuel by Argentina, is also very much an old school Kirchnerite linked to the Federal Planning Minister Julio De Vido. The administration of President Cristina Fernández de Kirchner is now packed with young officials, many members of the youth group La Cámpora, who are out to change things. Maybe Espinosa’s resignation is about the younger Kirchnerites gaining ground in the administration.

Even with the money-laundering allegations in the news, and the spectacular stories ventilated on private television about Kirchnerite officials purportedly hoarding bags full of cash in and out of Kirchner’s office, there are other matters of concern. For Argentina is not only about sleaze. It is also a land full of experimental economists.

The critics will tell you that there are many things wrong with the economy: underreported inflation, strict currency exchange controls, a black market dollar and high export duties. The black market dollar is making negative headlines that can no longer go unnoticed. A dollar is officially worth about 5.20 pesos. But because of the currency controls introduced in November 2011 and since then tightened, a dollar in the black market was going for 10.45 pesos on Wednesday.

The black market dollar, like Argentina’s problems with plunder, are nothing new. Since the start of the year Fernández de Kirchner had held a number of meetings with her “economic team”: Economy Minister Hernán Lorenzino, Deputy Economy Minister Axel Kicillof, Domestic Trade Secretary Guillermo Moreno, Central Bank Governor Mercedes Marcó del Pont and AFIP tax bureau chief Ricardo Echegaray. The difference between the official dollar and the black market dollar has increased consistently. But the national government had kept mostly mum about the situation. Then on Monday Fernández de Kirchner declared that her government was under pressure to drastically devalue the peso. Devaluation, she said, is not going to happen. “To devalue, you will have to wait for another government,” CFK said.

That was not all. On Tuesday, the five members of the President’s “economic team” called a press conference. Lorenzino, Kicillof, Moreno, Marcó del Pont and Echegaray announced on Tuesday a sweeping tax amnesty for undeclared dollar deposits, in the form of a bill that has been submitted to Congress for swift approval by the Kirchnerite Victory Front coalition that controls it.

The new tax amnesty (an opportunity to whitewash dollars) includes a certificate, Cedin, to deposit dollars in the Central Bank to then purchase properties or undertake construction projects. The buyer of a property will pay with the Cedin certificate that the seller can then cash in the Central Bank for dollars, according to the official story trumpeted on Tuesday. It’s quasi money that can eventually translate into dollars filling people’s pockets once again.

The currency exchange controls had practically frozen the real estate market in Buenos Aires City where properties have traditionally been priced in dollars. Real estate transactions in the first quarter of this year dropped 41 percent in Buenos Aires City. The Cedin certificate is designed to rescue the local real estate market from oblivion and the national government seems to be admitting that it lost the battle for properties to carry price tags in pesos.

An energy bond in dollars, paying an annual interest rate of four percent and maturing in 2016, is also part of the amnesty menu (along with a third bond). No questions will be asked, Echegaray said. But Echegaray added that those suspected of tax evasion, like Báez and members of the opposition media group Clarín, will not be allowed to take part in the amnesty.

The Famous Five took difficult questions during the press conference on Tuesday. Moreno insisted that the inflation rate is the official one as measured by the state-run statistics bureau INDEC. Kicillof, a Keynesian economic doctor in his forties trained at the University of Buenos Aires, estimated that Argentines have 40 billion dollars under the mattress at home and a total of 200 billion dollars counting funds stashed abroad.

The plan, the Famous Five said, is about issuing “transparent instruments for undeclared assets.” Kicillof said there is nothing substantially wrong with the Argentine economy, especially when compared to the dire situation in Europe. He complained about bank runs and operations with black market dollars to ruin Argentina. He spent a lot of time on Tuesday, and again in the Senate on Thursday, explaining that a drastic devaluation overnight (like the one decreed by the Peronist administration in 1975) would lead to disaster and ruin the purchasing power of the working classes.

Doctor Kicillof could be right. Doctor Kicillof could be wrong. But Naipaul’s Argentina is used to catastrophic economic crashes and such an event has not happened just yet in the Kirchnerite era. Massive anti-government demonstrations have been staged recently against the sweeping reform of the justice system sponsored by Fernández de Kirchner and the economic measures. But unemployment is low and the chugging economy has not blown its engine just yet, even when growth is sluggish at best and there are loud cracking noises (like a five-day strike by long-distance bus drivers for better pay).

There was a pleasant whiff of spring to the massive nationwide demonstrations. But there was also some unsavoury stuff going on under the surface. During the protests in April a small group of protesters tried to storm Congress. When activists of the centre-right party PRO tried to stop them they were showered with homophobic abuse and called “Kirchnerites.”

The reform of the Magistrates Council was passed into law on Wednesday by the Senate 38-30. A demonstration was staged outside. The protest was called by political opposition groups this time and not by wildcat demonstrators. The anti-government protests have raged. But now getting ready to answer back are the Kirchnerites, who are planning to march on Plaza de Mayo on May 25 to mark the 10th anniversary of Kirchner’s inauguration as president in 2003.

The dollar whitewash is also an effort by the CFK administration to deal with the criticism that has been hurled upon its management of the court system and the economy. Kirchnerite officials rarely do a lot of talking. But the Famous Five now clearly have been allowed by the President to explain their policies to the public. They took difficult questions. They argued loudly with opposition senators during a plenary meeting of Upper House committees on Thursday.

There’s a lot of talk of CFK’s supremacy verging on dictatorship. But others argue that the President is only making use of a parliamentary majority bestowed upon her by her landslide victory in the presidential elections of 2011. The Kirchnerites did not enjoy such supremacy when they lost the midterm elections in 2009 in Buenos Aires province. Parliamentary majorities come and go. Midterm elections have been formally called for October 27. All political parties will hold open primaries on August 11. The Victory Front will lose its parliamentary majority if it does not perform well. It will boost its might if it performs relatively well because it only has to improve on the dire result of 2009 to win more seats.

The President has used the parliamentary majority to limit court injunctions in cases involving the state and to promote the partisan election of Magistrates Council members. A Kirchnerite lawmaker on Thursday unveiled a bill for the state to seize the newsprint company Papel Prensa, which is currently controlled by the anti-government media group Clarín and the conservative daily La Nación.

Such drastic reforms, say many, make Argentina look more and more like socialist Venezuela. Nicolás Maduro, Venezuela’s new Bolivarian president, was on a regional tour that included a stop in Argentina (and a meeting with CFK) on Wednesday. Maduro only just won the elections in Venezuela and the result is still being challenged by the opposition candidate, Henrique Capriles. But Maduro’s tour of Uruguay, Argentina and Brazil shows that he has the support of its main regional neighbours. Maduro headed a militant rally of Kirchnerite activists at the All Boys soccer club stadium in Buenos Aires during his visit.

Argentina’s atomized opposition, like in Venezuela before Capriles, has a lot of engineering to do if it is going to defeat the Victory Front. All eyes are currently on Sergio Massa, the Peronist mayor of Tigre (a northern district in Greater Buenos Aires). Massa, who served briefly as cabinet chief to Fernández de Kirchner, performs well in polls and is still technically a Kirchnerite. Many observers think that this year’s election outlook will change if Massa decides to run in October either for or against the national government.

The proven Buenos Aires – Argentina lawyer professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires  lawyer in Argentina.

Real Estate: Argentina Tries to Coax Undeclared U.S. Dollars Into Energy, Construction Projects

The Wall Street Journal – By Ken Parks

BUENOS AIRES–Argentina’s government will ask Congress to approve legislation that will allow Argentines to invest their undeclared U.S. dollar savings in local bonds to finance energy and construction projects, Economy Minister Hernan Lorenzino said Tuesday.

Argentines are thought to hold tens of billions of undeclared dollars in Argentina or offshore bank accounts.

Mr. Lorenzino’s announcement coincides with the weakening of the Argentine peso to historic levels against the dollar on the black market. At the same time, the central bank has struggled to rebuild its foreign currency reserves due in part to persistent capital outflows.

“People might have their cash in a safety deposit box, or under the bed, or worse, in a tax haven. This [measure] means taking those resources and incorporating them into the productive sector,” Mr. Lorenzino said in a televised press conference.

Mr. Lorenzino said the administration of President Cristina Kirchner will submit the legislation to Congress immediately.

All the senior members of Mrs. Kirchner’s economic team were present at the event: Commerce Secretary Guillermo Moreno, who is in charge of import and price controls; Deputy Economy Minister Axel Kicillof; Central Bank President Mercedes Marco del Pont; and tax chief Ricardo Echegaray.

Argentines have long viewed the dollar as a store of value due to their country’s long history of high inflation and economic crisis that frequently ended in major devaluations of the peso. The unrelenting weakness of the peso on the black market in the last six months is feeding fears that a devaluation might be in the works, and stoking even more demand for scarce dollars.

In an attempt to calm the public, Mrs. Kirchner said Monday that her administration won’t devalue the peso.

Inflation that most economists say is around 24% a year coupled with government restrictions on the dollars people and businesses can legally purchase are driving some Argentines into the arms of black market currency dealers.

The peso has lost about 64 cents this month to set a record low of around 10.04 to the dollar Tuesday, according to newspaper El Cronista, which publishes an average of underground exchange rates.

The black market is thought to be small, but does influence prices in some parts of the economy, especially real estate, which for decades has overwhelmingly used the dollar in transactions.

On the regulated currency market the dollar sold for 5.2090 pesos, though dollar rationing means that for most Argentines the official exchange rate is a mirage.

The proven Buenos Aires – Argentina lawyer professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires  lawyer in Argentina.

Real Estate: Buenos Aires Lures Foreign Buyers With Tumbling Prices

This article appeared May 3, 2013, on page M3 in the U.S. edition of The Wall Street Journal, with the headline: Foreign Buyers With Cash Can Tango in ‘Paris of South America’.

Roderick Chapman, a 50-year-old marketing specialist from Vancouver, British Columbia, was in Buenos Aires last month, looking at one-bedrooms in the city’s posh Recoleta district.

“I’m absolutely amazed by the number of choices,” said Mr. Chapman whose budget for a vacation property is 130,000 U.S. dollars—the currency in which most Buenos Aires real estate typically is traded. “It is overwhelming, really.”

With prices for luxury apartments down by 20% to 25% since last year, according to local real-estate agents, expatriates like Mr. Chapman are finding great buys in Buenos Aires after nearly a decade of steep price climbs.

Nicely renovated apartments with parquet floors and terraces in Recoleta—the neighborhood that gave Buenos Aires the moniker “the Paris of South America”—are selling for roughly $185 per square foot, down from roughly $240 in 2008, according to local agent estimates (closing prices aren’t published in Buenos Aires). One-bedrooms in trendy Palermo list for about $150,000 and sell for less. Local brokers offer listings for $200,000 to $400,000 that they say might have sold for 40% more two years ago. Some multimillion-dollar properties are being marketed for nearly half of what was asked just a few years ago.

But there is a catch to the new Buenos Aires buyers market, as Mr. Chapman’s house-hunting trip illustrates. “I actually have to cut my trip short, because I’ve run out of dollars and I can’t get any more,” he said.

For Mr. Chapman, as for other foreign home shoppers in Buenos Aires, navigating Argentina’s complicated currency landscape is the wrench in the otherwise tempting real-estate works.

In May last year, Argentine President Christina Kirchner strictly limited access to U.S. dollars and other foreign currencies in a bid to stem capital flight. With the Argentine peso facing about 25% annual inflation (government figures, widely discredited, set the rate much lower), and an unofficial exchange rate that has effectively devalued the peso sharply, demand is high for dollars.

These days, the main feature that foreign buyers say they look for in a Buenos Aires property has nothing to do with closet space or a wide terrace. It is a seller with a bank account outside Argentina to which they can legally wire funds. This is a way to get around having to convert any dollars wired into Argentina into pesos at the official rate, after which it is nearly impossible to convert back into dollars at the official rate.

Mr. Chapman has asked brokers to show him only apartments owned by sellers willing to do a foreign-account-to-foreign-account sale. “I absolutely, absolutely, absolutely will not bring my money into Argentina,” he said.

The currency situation has spooked some foreigners living in the country. Real-estate agent Pericles Economides said foreign homeowners make up 90% of the sellers in his listings, while local buyers eager to convert their devaluing pesos into more stable real estate make up nearly all his current buyers.

Still, in such a climate, foreign buyers find that their dollars—in cash, as mortgages are rare in Argentina—give them market clout. Buenos Aires property developer Gabriel Maioli, a partner at M&M Developers in Buenos Aires, began selling newly built apartments in pesos for the first time last year but offers discounts to buyers willing to pay in dollars, he said.

Among luxury apartments currently on the market is the 9,200-square-foot 14th floor of the Art Deco Kavanagh Building, offering sweeping views of the city’s central Plaza San Martín and, on a clear day, neighboring Uruguay across the River Plate. Two of the bedrooms open onto terrace gardens so large their lawns require mowing. The owner, real-estate mogul Alain Levenfiche, put the property on the market in 2008 for $5.9 million but failed to sell it. Today, he is asking $3.3 million.

In Palermo Botánico, considered to be one of the city’s premier neighborhoods, a five-bedroom apartment with a bird’s-eye view from a large deck of the city zoo’s llamas, guanacos and condors is on the market for $695,000. American owners Douglas and Janet Choi, both 43, who moved to the city in 2008 for a “personal-growth opportunity” and are now planning a move to London, said they spent $200,000 on renovations that included a modern, granite-topped kitchen and a wood-burning grill on the terrace.

Some local agents have called the Chois “dreamers” because of the property’s price tag, estimating that $500,000 is a more likely selling price. Mr. Choi said the family doesn’t have “the need to sell such a special place,” and will rent if they can’t find a buyer before their move to London.

Alan Dickinson, a 50-year-old technology sales executive in New York, is looking to buy his second property in the city. “In what other world-class city can you buy property of this caliber at those prices?” said Mr. Dickinson, who raves about the city’s pasta, steak, and “really friendly, inclusive” people. Last month, he met with several Buenos Aires real-estate brokers, instructing them to alert him to distressed sellers looking for a quick, dollar-denominated sale.

In 2005, he paid $185,000 for a newly built Palermo duplex with a terrace, finally taking possession in 2009 after construction delays. He lives in it for a week out of every two months and rents it out to tourists the rest of the time. In four years, he has grossed more than what he spent on the unit, he said.

But with the new restrictions on U.S. dollars and other foreign currencies, many deals are falling apart at the 11th hour due to the difficulty in arranging payment, said Michael Koh, a real-estate investor and consultant who has made more than 500 real-estate transactions in Buenos Aires on behalf of clients. Negotiating sales, he said, has become “crazy.”

In April, two sales Mr. Koh was negotiating on behalf of foreign sellers stalled when one Argentine buyer wanted to pay with gold bars and another offered a studio apartment as partial payment.

The hurdles haven’t stopped him from investing. Mr. Koh owned eight properties in the city before closing last week on a ninth apartment. He bought a 500-square-foot, sleekly furnished one-bedroom with a balcony in Palermo Hollywood for $130,000, which he intends to rent short-term to tourists.

“I swore I would never buy anything there again,” he said, “but there are now some deals that are too good to pass up.”

Richard Maudsley, a San Diego-based real-estate investor, also is undaunted. He arrived in the city in mid-April.

Mr. Maudsley, 57, spent a week meeting with brokers and viewing apartments in Recoleta and Palermo, a hip, bohemian neighborhood.

But he isn’t pulling the trigger quite yet. He met with financial and legal advisers who can help him quickly close a deal if he spies a bargain. He said Argentina’s property market appeals to him because “it is a cash market,” less likely to be affected by rising and falling interest rates.

“The peso aspect is a real risk, but I’m banking on the fact that things will normalize down there,” said Mr. Dickinson, the technology sales executive. “I think the country will get its act together.”

Buying in Buenos Aires:

  • Nonresidents can purchase property in Argentina and payment can be made between overseas accounts, as long as the sale is declared and taxes are paid.
  • The buying process can take a few months. A buyer signs a purchase contract with 30% down and a notary public does a title check. When the balance is paid, ownership is transferred.
  • Costs include a 1.5% tax on the sale price for the seller, an additional 1.8% federal tax on the buyer and seller, and 1% to 2% in notary fees, paid by the buyer.
  • Brokers for buyers and sellers charge between 2% and 5% of the sales price.
  • Additional annual taxes include municipal and provincial property taxes, as well as a federal tax of 1.5%. Income from rental units is taxed at 21%.
  • There are no capital-gains taxes in Argentina when the property is sold later for a profit. But foreigners need a certificate to sell showing taxes are paid up.

The proven Buenos Aires – Argentina lawyer professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires  lawyer in Argentina.