Texto: Josefina Salomón
“If someone enters a city and sets up a hotel with ridiculously low prices with the aim of laundering money, they are not only facilitating the entry of illicit money, but also distorting the local economy with unfair competition.”
This is how Alejandra Freire, a lawyer and researcher, explains the impact of money laundering. She says that the lack of information about the ways in which it is carried out, as well as the involvement of women in criminal organizations are two of the reasons that hinder investigations and allow this illegal economy to continue to grow.
We spoke to Freire, who will lead a panel at the international seminar organized by Amassuru “Organized crime in Latin America from a feminist approach” on 22 November.
In.Visibles (IV): The panel you will lead will focus on how to approach investigations into money laundering from a feminist perspective. What does this mean?
Alejandra Freire (AF): In the case of Argentina in particular, most criminal organizations tend to have a family structure and most of the money laundering cases we see respond to these family dynamics. They are brothers, sisters, partners, parents who insert the money they make illegally into the legal market.
However, the gender perspective is rarely prioritized when these types of crimes are investigated. When this is done, the impact that factors such as family relations, gender, particularly the roles women play, becomes apparent.
IV: Experts say Argentina is a country where it is very easy to launder money…
AF: Yes, Argentina and other countries, especially in Latin America, because money laundering goes hand in hand with the expansion of organized crime in the region and the diversification of criminal markets, facilitated by corruption. Without corruption, neither organized crime nor illegal economies can make any progress.
In Argentina, several factors, including the extent of the use of cash for large operations and the lack of resources control bodies have, facilitate laundering.
The Financial Information Unit is the national agency in charge of processing information about money laundry and then pass it on to the Public Prosecutor’s Office so that financial investigations can be launched. But carrying out investigations or establishing good public policies without solid information is very difficult.
In terms of prevention, since 2011 a lot of focus is being put on unauthorised financial intermediation, that is, when an unauthorised entity receives deposits from the public and lends them out. The focus that is being placed on this is also related to the increase in the use of cryptocurrencies.
IV: How does this impact on investigations into drug trafficking?
AF: In Argentina, what we see is that judicial investigations, in the early stages, tend not to take into account any financial aspects. So, for example, when a drug trafficking case is initiated, the data that is obtained can help determine an organization’s illicit assets but failing to collect it early on makes it very difficult to do at all. In Argentina, it takes around 14 years for a case to reach some kind of conclusion. By then, many of the assets become unavailable so the possibility of confiscating them and, in some way, repairing the damage to society is lost.
This is despite the fact that in 2006 the Attorney General’s Office issued the first resolution ordering prosecutors to investigate financial matters from the beginning of proceedings related to drug trafficking. Furthermore, in 2011, the Criminal Code established that judges have to establish measures to be able to determine which assets could potentially be confiscated at the very start of the process.
IV: Following the money trail is key when investigating drug trafficking. Why is this not done?
AF: I think an important reason is the lack of coordination between regulatory bodies, which are the ones who have the information in the first place.
I’ll give you an example. There is a case in the province of Cordoba involving a company that was doing unauthorised financial intermediation. During the investigation, which was initiated after a report, it emerged that this company was registered with the AFIP (Federal Agency of Public Revenue) as a financial institution, but it could only have been registered if it was authorised by the Central Bank. This is paradigmatic, because the AFIP was not alerted and the banks did not raise any alarms where their assets were deposited, i.e. there was a lack of coordination on all sides.
IV: What roles do women play in money laundering?
AF: There are some reports that show, particularly in relation to drug trafficking, that women play a very important role in logistics, accounting and money laundering. Now, if we go to Argentina, there is no disaggregated data on gender issues, which is a problem.
We do not have a single register of all money laundering convictions, which is something that should be done.
IV: It would seem that money laundering does not receive much attention…
AF: Yes, that is partly because the consequences of money laundering are less visible. However, money laundering not only affects the financial system, but also indirectly affects public health, the administration of justice, people’s lives and business competition. In other words, it generates cracks in various social, economic and political sectors because it leads to a lack of money for the implementation of public policies.
Without efficient money laundering mechanisms, drug trafficking could not exist. That is why we insist on investigations from the beginning and on following the money trail, because money is what gives organizations the power to corrupt, to establish themselves.
Whoever is going to launder assets does not want to earn money, what they want is to insert it as if it had been obtained legally. What they do along the way is greatly distort prices. So, if I want to launder assets, I can put up a five-star hotel at much lower prices, because what I am interested in is demonstrating that I earned money in a legal way, and that is when it affects the economy in general, because it generates unfair competition.
IV: Finally, how do you see the prospects for the future?
I think it is very important that countries are able to focus their investigations in line with their needs, rather than on the basis of the demands of international bodies which don’t take particularly contexts into account.
Let me give you an example. In terms of money laundering, we have seen a rise in the use of crypto assets, including as a way to obtain US dollars. That is, as a gateway into the traditional financial system.
In Argentina, which is one of the countries with the highest number of cryptocurrency users, an international agency asked us to implement a licensing system as a way to regulate these techno service providers who work in the crypto world. In the rush of complying with this requirement it was decided that any person, national or foreign, could register, even if they didn’t have a local tax identification code. What happens now is that it is very difficult to supervise those who are abroad.
So, it turns out that until we start to see our own contexts, our own resources, our own risks, it is going to be very difficult to make progress, both when it comes to prevention and prosecution.
This interview has been summarised and edited for length and clarity.
The international seminar, organised by Amassuru: “Organized crime in Latin America from a feminist approach” will take place in Buenos Aires, Argentina, on 22 November. Subscription details and access to the webcast of the event are available here.
