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Montevideo, October 23rd 2016 - 03:13 UTC

Canadian bank abandons Uruguay following raid on its office on request from Argentine judge

Friday, August 16th 2013 - 18:00 UTC
Full article 62 comments
RBC affiliate will be operational in Zonamerica until 31 October RBC affiliate will be operational in Zonamerica until 31 October
Julio de Brum “bad signal with tarnished the image of Uruguay’s banking system” Julio de Brum “bad signal with tarnished the image of Uruguay’s banking system”

The Royal Bank of Canada, RBC, is abandoning Uruguay following a raid in its offices at Zonamerica ordered by a Uruguayan magistrate on request from Argentina during which computers, documents on clients and even cell phones from staff were seized by the intervening party which included on-watching Argentine treasury police.

The official version is that the bank is leaving as part of a major ‘restructuring process of its interest in Latinamerica”. With this purpose the head of the bank’s emerging markets office, Barend Jansses visited Montevideo to inform staff of the decision which was later communicated to clients.

As part of the ‘strategic review’ of the bank’s business in Latinamerica, RBC’ “Wealth Management”, it was decided “to close offices in Montevideo as of 31 October 2013”.

The raid last June on the bank’s offices was part of a major operation in several financial institutions in Buenos Aires with alleged connections in Montevideo referred to alleged money laundering schemes in the transfer of South American soccer players involving tens of millions of dollars. 

The raid and sequestration was ordered by Uruguay’s Organized Crime magistrate Adriana de los Santos on request from her peer in Buenos Aries, Argentine federal judge Norberto Oyarbide.

RBC pointed out that the judicial investigation in its Uruguay offices is an ‘independent issue’ and the bank will continue to work with the authorities to clear it. So far there have been no irregularities claims against RBC or any RBC staff.

“The office in Montevideo will remain fully operational until next 31 October to enable a smooth and orderly transition both for staff and clients, providing all the available information together with a high level of service and professional advice all along the transition period”.

Despite the announced deadline of 31 October, the RBC affiliate in Uruguay will remain active until all clients’ accounts have been transferred.

RBC clients can remain and transfer their accounts to the bank’s offices in North America or Europe, which currently serve “more than 90% of RBC Latinamerican clients, or transfer to other financial institution.

Nevertheless RBC remains committed to the Latinamerica market as is has done successfully for over a century, said RBC sources.

But despite RBC elegant exit from Uruguay, the rest of financial institutions are not happy, rather concerned since the court seizure sets a ‘bad record’ and sows mistrust among bank clients.

In effect Magistrate de los Santos reacting to the negative echo of her decision to allow Argentine experts to go through all the computers, documents and cell phones seized revoked the original decision and limited the activity only to “Uruguayan experts”.

For that purpose a special committee was named with experts from the Judiciary branch and the Executive’s Anti-laundering assets office.

Furthermore given the high sensitivity of the acting magistrate’s decisions which in effect involved providing Argentina with information of all of the bank’s clients in its Uruguayan office, the Supreme Court asked de los Santos to inform by writing of the procedure and raid.

To make things worse during the raid Argentine treasury police and other staff were present.

Julio de Brum Executive Director of the Uruguayan Private Banks’ association said the raid caused “great concern” and warned of the ‘bad signal’ which affects “the image of the country’s banking system’.

“The bank raid was done just like if it was in any retail shop looking for contraband”, said de Brun. “We are not questioning the court, but the raid was badly implemented: staff was even frisked and their cell phones seized”.

“The most logic thing would have been to involve Central bank staff; they know what to look for, and with no major repercussions: the whole thing could have been avoided following Uruguayan law and tradition”, said Alberto Varela, tax law expert.

The raids on request from Argentine Judge Oyarbide included not only RBC in Zonamerica but also three financial institutions in the World Trade Centre; both locations work on a special free-zone status with certain benefits under Uruguayan law.

The simultaneous raids took place on 13 June and on 28 June the Uruguayan central bank suspended the licence of Argentine based Alhec Group to operate in Uruguay.

On 8 August the team of Uruguayan experts looking into the seized material returned 27 of the 45 computers.

Meanwhile Orlando Dovat, head of Zonamerica has insistently requested the Uruguayan government releases a message of calm and certainty to the financial community following the raids.

“It is essential for quick action and that government sends a strong message of support to the financial system” said Dovat, adding that “we must not forget that these institutions depend from overseas headquarters and there is concern. The government, the minister, the central bank must transmit a message of certainty”.

“This situation can not be repeated. The RBC incident was badly managed”, pointed out Dovat who suggested “a protocol to which judges must keep in such situations, which I believe is the responsibility of the Central bank” or on the other hand “clarify the tax exchange understanding with Argentina because it is quite confusing regarding tax and criminal law”, and there were excesses committed.             

Top Comments

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  • Stevie

    Canadian washing machines... anybody?

    Aug 16th, 2013 - 06:37 pm 0
  • Porto Margaret


    As the Uruguay authorities have all they want let's see where if anywhere this actually goes.

    It is odd that this was all being directed from BA with de los Santos holding up her petticoat so the Argentine treasury police could have a peek.

    Added to this;
    'Uruguayan central bank suspended the licence of Argentine based Alhec Group to operate in Uruguay.'

    Aug 16th, 2013 - 07:00 pm 0
  • Marcos Alejandro

    The Royal Crooks of Canada run away.

    Aug 16th, 2013 - 08:44 pm 0
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