Argentina achieves low overall compliance with international standards and codes, with a score of 37.5 out of 100 in our Standards Compliance Index. While the compliance with standards and codes in the area of macroeconomic fundamentals is satisfactory, low levels of observance for the accounting and money laundering standards and the scarcity of information available on compliance in the area of financial supervision have negatively affected Argentina's overall level of compliance. A fiscal responsibility bill adopted in 2004 promised to bring the transparency of fiscal policy closer to international standards, though its enforcement is not yet evident. International auditing standards are in the process of being adopted.

Macroeconomic Policy and Data Transparency

Argentina is a subscriber to the International Monetary Fund's (IMF) Special Data Dissemination Standard (SDDS). Based on information provided by the Argentinian authorities to the International Monetary Fund's (IMF) Dissemination Standards Bulletin Board (DSBB), Argentina meets SDDS specifications for coverage, periodicity, and timeliness of the data and for dissemination of advance release calendars. The information on the SDDS website also indicates that Argentina satisfies the conditions for access and quality for all data categories. However, with regards to the integrity aspect of the SDDS requirements, the information provided does not clearly disseminate the terms and conditions of confidentiality pertaining to some data categories. More »

Oxford Analytica (OA), in its 2005 report on Monetary Policy Transparency maintains its rating of Argentina's overall compliance with this standard as "Compliance in Progress." Whereas in 2002 the Central Bank of Argentina (BCRA) aimed for a fully operational inflation-targeting regime, it appears now to have shifted to the adoption of a reference interest rate system. Concerns about insufficient clarity regarding the objectives of monetary policy could begin to undermine the credibility of the central bank. Doubts over BCRA autonomy are likely to persist in the near future, especially if significant purchases of US dollars to prevent the appreciation of the peso continue. The communication strategies of the BCRA center upon data reliability and comprehensiveness, as well as user-friendly accessibility to data on the BCRA website. A new, comprehensive system of internal and external audits of financial institutions, put in place since the crisis of 2001-2002, has enabled a better understanding of the strengths and vulnerabilities of the banking sector in general, and is believed to help in the gradual recovery of the financial system. More »

Oxford Analytica (OA), in its 2005 Report on Fiscal Policy Transparency in Argentina, rates Argentina's overall compliance with this standard as "Enacted." Argentina's legal framework provides clear guidelines for fiscal management and transparency. These have been enhanced by the enactment in 2004 of the Fiscal Responsibility Law (LRF). National level fiscal data disclosure is adequate, but the standards of provincial information are variable. The LRF is meant to increase sub-national government's fiscal efficiency, limiting future spending and debt issuance by the provinces. Argentina complies with the IMF Special Data Dissemination Standard (SDDS). Enforcement of the comprehensive legal framework for fiscal transparency remains one of the country's top priorities. Adherence to the LRF could substantially improve fiscal data reliability and the development of homogeneous indicators. The lack of control over fiduciary funds continues to diminish the overall performance of fiscal transparency, and progress in this area is unlikely to occur in the near future. More »

Institutional and market infrastructure

According to a 2002 World Bank assessment of insolvency and creditor rights system in Argentina, the legal framework for enforcement of both secured and unsecured rights and Argentine corporate insolvency regime are largely consistent with World Bank Principles and Guidelines for Effective Insolvency and Creditor Rights Systems, although some improvements were needed. Due to the lack of appropriate incentives for both the debtor and the creditors, as well as some other factors, the legal framework for informal workouts is rarely used in practice. Also, economic recession brought about a significant augment of enterprise insolvencies and insolvency courts are overburden in most jurisdictions. As an immediate step, the World Bank recommended to adopt by a Presidential Decree or by a law a new legal mechanism instituting a consensual out-of-court corporate workout framework. This new legal mechanism should also establish the most urgently needed reforms to the insolvency system that are essential and feasible, leaving other important but not so urgent amendments to a next stage of the reform process. In the medium term, Argentina should focus on the amendments to the legal and institutional framework for creditors' rights and further amendments to the insolvency regime. More »

The Argentine Federation of Professional Councils in Economic Sciences (Federacion Argentina de Consejos Profesionales de Ciencias Economicas - FACPCE) is in charge of coordinating efforts to issue professional accounting and auditing standards. In 1998, the FACPCE's Governing Board decided to implement a plan to adapt Argentine professional accounting standards to International Financial Reporting Standards (IFRSs) issued by the International Accounting Standard Board (IASB). After a process that took about three years, on December 8, 2000, the FACPCE's governing board approved Technical Resolutions (TRs) Nos. 16 through 19, thus completing the first stage of the harmonization plan, which continued with the issuance of new TRs. However, the issued standards included certain differences with IFRSs. According to the report by Ernst & Young, as of March 2006, the FACPCE had no defined plans on how the local TRs resulting from the process of harmonization with IFRSs will be amended to adapt them to the changes made by the IASB during the period of January 2003-April 2004 or to those to be made in the future. However, upon the unification of professional accounting standards throughout Argentina, it was provided that in case of absence local standards on a particular topic, the rules and concepts stipulated in IFRSs, revised IASs, and SIC and IFRIC interpretations may be used. In addition, the FACPCE and the Argentine National Securities Commission (CNV) are actively discussing the comprehensive adoption of IFRSs for companies whose securities are publicly traded and other companies of public interest. More »

In Argentina, institutional Corporate Governance (CG) is often considered to be relatively developed compared with similar countries, according to a paper published by the Center for Financial Stability in 2005. In 2001, Executive Order 677 was a first and major step in the adoption of good CG practices for publicly-traded companies. Although the reform was warmly welcomed by the market, evidence shows that there is still much potential for improving institutional CG in Argentina, including not only publicly-traded companies but also privately-held firms and financial institutions. In September 2004, the Argentine Institute for Corporate Governance - Instituto Argentino para el Gobierno de las Organizaciones (IAGO) published a Code of Good Practices for Corporate Governance in conjunction with KPMG and the Institute for Enterprise Development in Argentina - Instituto para el Desarollo Empresarial de la Argentina (IDEA). The Code is primarily aimed at listed companies, but can also be applied to privately held and small and medium-sized enterprises. Its recommendations are based on the OECD Principles on Corporate Governance and the recommendations of the 2003 White Paper on Corporate Governance in Latin America by the OECD. The Code is voluntary in nature and companies should adhere to the principles of the Code via a public declaration regarding their compliance with it. More »

On July 4, 2003, the Federation of Professional Councils of Economic Sciences (Federacion Argentina de Consejos Profesionales de Ciencias Economicas - FACPCE) issued Resolution No. 284/03 whereby it approved a project to adopt the International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). The ISAs considered will be those issued by the IFAC's IAASB through June 30, 2004 and the FACPCE reserves the right to adopt the ISAs either in full or in part. The text of eventually approved standard shall include: (1) the ISAs translated into Spanish language with Argentine vocabulary and expressions on the basis of a translation that it will prepare or adopt; (2) variations introduced taking into account the particular conditions in Argentina; and (3) a manual on ISA application by small entities. According to a 2006 report by Ernst & Young, the technical bodies under the FACPCE have worked during 2004 and 2005 to complete the tasks indicated in points (1) - (3) above, and the FACPCE was expected to grant its approval during 2006. However, as of January 2007, there was no information on whether this project had been completed. More »

The Financial Action Task Force (FATF) conducted a Mutual Evaluation (ME) of Argentina in October 2003 and the FATF published its findings in its 2004 report. According to this report, the general Argentine Anti Money Laundering (AML) regime, including the criminalization of the offence of money laundering, the provisions in relation to the Financial Intelligence Unit - Unidad de Informacion Financiera (UIF), and administrative penalties, was established by Law 25.246 of 2000. Since 2002, the UIF has established guidelines for categories of reporting parties and types of activity in relation to customer due diligence (CDD), record keeping, suspicious transactions reporting (STRs) and internal control procedures. The report indicated that international cooperation and exchange of information with the UIF counterparts works satisfactorily and Argentina has at its disposal adequate measures in relation to confiscation, mutual legal assistance and extradition. However, the report identified weaknesses in Argentina's anti-money laundering legislation, the main weaknesses being the lack of terrorist financing legislation or a national coordination strategy. However, according to a 2006 U.S Department of State (DoS) report, the Government of Argentina (GOA) took several important steps to further combat money laundering and terrorist financing in 2005, including the ratification of the United Nations (UN) International Convention for the Suppression of the Financing of Terrorism and regulatory changes to improve its anti-money laundering and counterterrorist financing systems. Nonetheless, unless Argentina amends its anti-money laundering legislation to state that any person who commits a crime and then launders the illicit proceeds of that crime is prosecuted for money laundering and passes domestic legislation that criminalizes the financing of terrorism, weakness in Argentina's money laundering regime remains. More »

In 1996 the Argentine central bank - Banco Central de la Republica Argentina (BCRA) redefined the regulatory and operational framework for payment systems and took the lead in implementing payments reforms. However, no information is publicly available as to Argentina's compliance with the Bank for International Settlements' (BIS) Core Principles for Systemically Important Payment Systems (CPSIPS). The new regulatory framework included a real-time gross settlement system (RTGS) - the Electronic Payment Means (MEP), operated by the Central Bank; privatized automated low-value clearinghouses throughout the country; and automated large-value clearinghouses owned and operated by the private sector. The Argentine Interbank Committee for Payment Means (CIMPRA) was created in the mid-1990s to manage the development of the National Payment System (SNP), planning and coordinating its implementation and the future improvements in payment means in the Argentine financial system. CIMPRA is the forum in which the various players in the system (the BCRA, banks, bank associations, automated clearinghouses) study, plan and monitor payment means performance. More »

Financial Regulation and Supervision

An assessment conducted in 1999 by the International Monetary Fund (IMF) - which only considered the transparency aspects of the Basel Core Principles (BCPs) for banking supervision - found that Argentina had an effective legal basis for banking regulation and the supervisory practices in Argentina appeared consistent with the disclosure aspects of the BCPs. The 1999 report found that relevant laws and regulations in Argentina are effectively implemented, and that the Central Bank of Argentina - Banco Central de la Republica Argentina (BCRA), through the Superintendency of Financial and Exchange Institutions - Superintendencia de Entidades Financieras y Cambiarias (SEFyC), is responsible for monitoring regulatory compliance and enforcing the law. However, the IMF assessment was conducted in 1999 prior to the financial crisis in Argentina and there is no further information publicly available regarding Argentina's compliance with the Bank for International Settlement's BCPs since. The Argentine supervisory framework separates banking regulation from supervision and the SEFyC is responsible for banking supervision in Argentina. According to a 2004 International Monetary Fund (IMF) report, the BCRA is making progress in strengthening bank supervision. Financial reporting obligations by all banks have now been fully reinstated. In line with program commitments, the capital adequacy regime was reintroduced in January 2004 requiring banks to build gradually an adequate capital cushion against exposure to the public sector and interest rate risk. Nevertheless, the IMF contends that close central bank supervision is needed given continuing weaknesses in banks' balance sheets. More »

According to a self-assessment conducted in 1999 by the Argentine authorities of the observance of the Objectives and Principles of Securities Regulation promulgated by the International Organization of Securities Commissions (IOSCO), Argentine law was consistent with the majority of IOSCO's 30 Objectives and Principles of Securities Regulation. The securities market in Argentina is basically controlled by the National Securities Commission - Comisión Nacional de Valores (CNV), similar in function to the Securities and Exchange Commission of the United States. The CNV was created in 1968 and is governed by Law 17811. It regulates stock exchanges, stockbrokers, mutual funds and open market operators and public offerings of securities. Decree 677/01 "Capital Markets Transparency and Best Practices", passed in May 2001, amended this law and aimed at improving reporting requirements and transparency. More »

In 1998, Argentina conducted a self-assessment (unpublished but available to the public on request to the Superintendency of Insurance (SSN)) of its observance of the International Association of Insurance Supervision (IAIS) Insurance Supervisory Principles of 1997. The self-assessment was not independently verified by the International Monetary Fund (IMF). According to the assessment, the majority of the IAIS Insurance Supervisory Principles were satisfied, either through Resolutions issued, monitored, and enforced by the SSN, or under provisions of Argentine law. However, the IAIS revised the Insurance Core Principles (ICPs) in 2000 and 2003 and there is no information publicly available as to Argentina's compliance with the new ICPs. More »

Legend:

Credit Ratings

Moody's B3/Positive

Fitch Restrictive Default /Positive

Standard & Poor's B+/Stable

Macroeconomic Data

2007 GDP (Current Prices): 259.999 billion USD (IMF)

2007 GDP (Per Capita): 6,606 USD (IMF)

2008 GDP (Growth Forecast): 7% (IMF)

2008 Inflation (CPI): 9.2% (IMF)

2007 Unemployment: 8.9% (CIA)

2006 Foreign Direct Investment

FDI (Inward): 4.809 billion USD (UNCTAD)

FDI (Outward): 2.008 billion USD (UNCTAD)

2006 Official Development Assistance

ODA (Received): 114 million USD (OECD)

ODA (Disbursed): N/A million USD (OECD)