Argentina's Senate on Wednesday passed a bill called for by President Cristina Fernandez, CFK, to toughen financial controls and meet global standards on fighting money-laundering.
Fifty-seven legislators voted in favour of the measure, with four voting against and one abstention, as Argentina hopes to avoid being put on a gray list of tax havens that have not fully implemented global transparency and data-sharing standards.
Ending up the gray list would raise borrowing costs and have a negative impact for CFK as she weighs a re-election bid in October.
The bill, which now must be signed by Cristina Fernandez, seeks to close a loophole in the current law by criminalizing the act of laundering one's own money.
It would boost government powers to freeze and confiscate property and includes a provision saying that Argentines who commit money-laundering crimes in other countries can be tried in Argentina.
Lawmaker Maria Jose Bongiorno urged the Argentine justice system to use the tools that the legislative branch has provided by passing the measure.
A decade after bank deposits were frozen and devalued during a severe economic crisis, Argentines have hidden savings worth some 10 billion to 15 billion US dollars in safe-deposit boxes or under the proverbial mattress -- representing 10% to 15% of total current deposits.
The government wants to find the undeclared money as part of a drive to avoid sanctions, such as being put on the gray list by the multinational Financial Action Task Force, a policy-making body that encourages anti-money-laundering reforms.
On top of what they have stashed away locally, Argentines are estimated to keep another 150 billion dollars in savings abroad.
For decades, they have used US dollars to protect themselves from currency devaluations and high inflation. Many people continue hoarding dollars and avoiding bank accounts, despite roughly 10% annual interest on fixed-term deposits in pesos.