Argentine justice charged the Uruguayan unicorn dLocal for alleged money laundering

The Argentine Justice charged the Uruguayan “unicorn” dLocal for possible money laundering maneuvers, reported Infobae and confirmed El Observador.

The company that provides cross-border payments connecting Big Tech with emerging markets is being investigated by the government of Alberto Fernández for carrying out overbilling operations for digital services and currency smuggling for at least US$400 million.

About this company, the Uruguayan one that became a unicorn for reaching a value of 1,000 million dollars worldwide, the Argentine Justice is considering raising an official notice before the Securities and Exchange Commission, the United States stock market regulator.

It is also being evaluated to ask organizations such as FinCen, the financial crime control network of the American treasury and Homeland Security Investigations to determine who were the effective beneficiaries of the transfers and thus establish where the money that improperly left Argentina came from.

The investigated maneuver is to take advantage of the exchange gap to take dollars abroad with operations not reflected in the accounting. It should be noted that in its balance sheet it practically “does not have” fixed assets, and only declares rents that supposedly belong to the “domicile of its exploitation”. In addition, it is stated that dLocal receives invoices from abroad from its parent company, issues B invoices to foreign clients to justify income, and invoices companies in the same group. These practices would allow you to avoid the obligation to settle foreign currency from the export of services.

Infobae reported, based on sources from the Argentine Fintech market, that the operation would be as follows: the company, which works as a “payment gateway” for large firms in emerging markets, does not pay its customers directly, such as Amazon or Dropbox. , but they transfer the dollars to themselves through subsidiary companies. They collect the pesos in the local market – charging their clients a commission of around 3% – and upload a Sirase (the request for access to dollars for digital services) to the Mercado Único y Libre de Cambios (MULC) for an amount certain. That is where it is suspected that dLocal may have incurred in over-invoicing of exports with operations that are much larger than what was due (up to 500%) to get the dollar out of the country at official value.

Prosecutor Ramiro González now wants to investigate whether dLocal has a department of Compliance within its structure and how it is formed. The structures of Complianceor regulatory compliance, are in charge of establishing policies and procedures that guarantee that the company carries out its activity and its business in accordance with current laws.

Sources of the Argentine government cited by the Argentine media would have said that as of June 2022, dLocal would have made all its transfers from a financial institution that they defined as “small”. According to these official sources, it would be “BICA, a bank that operates in the coastal region, which was originally a cooperative, and whose headquarters are in the city of Santa Fe.”

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On May 26, when the investigation was made public, dLocal reported: “We have been the subject of a series of misleading accusations in an article published by Infobae, which has not contacted the company for comment, about the alleged non-compliance. of expatriation rules in Argentina. DLocal operates in the payments industry and is regulated by government authorities in its 40 geographies. The article in question is incorrect.”

The statement at the time said that the company’s activities “are subject to specific government regulations for each currency that is exchanged.” In turn, the expatriation of funds is done through “regulated parties that follow the rules of the Central Bank of Argentina” and containing detailed payment transaction information. “Expatriate funds from Argentina are settled to global merchants, net of tax.”

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