Argentina Fires Financial Action Task Force Representative

C O N F I D E N T I A L BUENOS AIRES 000107

SIPDIS

E.O. 12958: DECL: 2035/02/24
TAGS: ECON EFIN PREL PGOV KJUS KCRM KTFN PTER SNAR EC AR
SUBJECT: Argentina Fires Financial Action Task Force Representative

REF: BUENOS AIRES 79

CLASSIFIED BY: Tom Kelly, DCM; REASON: 1.4(B),(D)


1. (C) Summary: The GOA fired its Financial Action Task Force
(FATF) Coordinator over the weekend, reportedly in response to
Ecuadorian criticism of Argentina's vote to blacklist Ecuador at
the recent Abu Dhabi Plenary. Argentina is under the gun itself in
an ongoing peer assessment that seems likely to find them, at best,
partially compliant with FATF recommendations. Argentina will
have to move quickly to replace the coordinator with someone
knowledgeable as it navigates the ongoing review. End Summary.



FATF Coordinator Axed




2. (SBU) In a surprise announcement, the GOA dismissed Financial
Action Task Force (FATF) Representative and Anti-money Laundering
and Counter Terrorism Financing (AML/CFT) Coordinator Alejandro
Strega over the weekend. The news broke from the Rio Group Summit
in Cancun where, according to press reports, the Government of
Ecuador criticized the FATF decision to blacklist them for
non-compliance with AML/CFT recommendations at the February 17 -19
Abu Dhabi Plenary. The Ecuadorian Government asked Argentine
Foreign Minister Jorge Taiana to account for the GOA's vote to
place them on the list of non-compliant countries at last week's
meeting. Taiana reportedly replied to his Ecuadorian counterpart
on Saturday evening that Strega had been dismissed from office,
effective immediately, for taking a vote that "was not pursuant to
law."




3. (C) According to Strega's predecessor as Coordinator, Juan
Felix Marteau (please protect),Strega made the extremely sensitive
decision to vote to blacklist Ecuador unilaterally, without
consulting other GOA officials. Marteau said that when Taiana was
confronted about the vote in Cancun, he reportedly confessed that
he knew nothing about it. According to Marteau, Taiana called
Justice Minister Julio Alak, who was also unaware that Strega had
voted against Ecuador. When Alak learned what Strega had done, he
summarily dismissed him from office. Marteau commented that it was
characteristic of Strega's lack of discipline that he would make a
delicate foreign policy decision without consultation or
coordination.



Just the Latest Victim




4. (C) Press reports have noted that Strega is only the most
recent (Ref. A) in a string of fired AML/CFT officials. In early
January, Minister Alak dismissed the Chief and the Deputy of the
Financial Intelligence Unit (UIF) and subsequently replaced the
board of advisors. The GOA filled the UIF vacancies largely with
politically connected AML/CFT neophytes. It will likely move
quickly to fill Strega's position to deal with the ongoing FATF
peer assessment of Argentina.



FATF Review on Horizon




5. (C) According to Fabio Contini, the Italian Embassy Financial
AttachC) who headed the FATF technical assessment team, the draft
report goes to the GOA, most likely in April, affording them an
opportunity to comment on or dispute elements of the team's
findings. The FATF Coordinator manages the comment process and
then meets the technical review team to discuss areas of
disagreement. According to Contini, the follow-up meeting is not
yet scheduled. It is evident, however, that a new Coordinator will
be hard pressed to defend Argentina's record with little time to
prepare and study the issues. The FATF Plenary will debate and
issue a final public report on Argentina's performance before the

end of the year.




6. (C) Contini said that the FATF review will likely be critical
of Argentina. Even with either Strega or someone more politically
nimble than Strega at the helm, Argentina faces a challenge in
mitigating the peer review's negative comments. Contini said that
Argentina's chief handicap for successfully completing the review
is that the FATF coordinator has no authority to coordinate. He
noted that when he asked Strega why he had not called all
interested elements of the GOA together in an effort to
systematically address some of Argentina's AML/CFT inadequacies,
Strega replied that, as Coordinator, he lacked authority to compel
parties to sit down together. Contini, like many other Embassy
contacts (Ref. B),thinks that Argentina's major AML/CFT
shortcomings are the absence of political will and failure to
integrate all the pieces of the system.




7. (C) Comment: Strega's departure is not surprising, and not just
because of his vote in Abu Dhabi. However, the GoA's approach to
the entire FATF matter has been reactive and improvised, and not
designed to deal seriously with the long-term issues plaguing its
AML/CFT enforcement. It remains to be seen whether the GOA will
replace Strega with someone with more experience and political
clout; the GoA's track record to date suggests otherwise.
MARTINEZ