Argentina has launched a tax evasion and money-laundering probe of multinational agribusinesses including U.S.-based Cargill Inc. and Bunge Ltd., accusing the industry of hiding millions of dollars in Argentine profits through shell companies and suspicious transactions.
The offices of 48 agribusiness companies were raided by 740 federal agents and information analysts on Tuesday, said Ricardo Etchegaray, who directs Argentina's tax collection agency.
The agency said Cargill, Bunge, the Netherlands-based Nidera SA and Hong Kong-based Noble Group Ltd. were among the companies targeted in the raids, and that the companies involved hid millions in profits on grain sales by creating fraudulent documents, including nonexistent companies under the names of front men, people with few economic resources and even dead people.
The tax agency also said it has informed the Financial Information Unit, Argentina's official money-laundering watchdog, of suspicious transactions including huge cash withdrawals by large grain exporters.
The unit's president, Jose Sbatella, said last month in an interview that grain companies also evade Argentine taxes by "triangulating" their exports _ for example by selling grain at a below-market price to a shell company in neighboring Uruguay before reselling it at market prices to customers elsewhere in the world.
Argentina is the world's third-largest soy exporter and second-largest corn exporter, and soaring prices for these commodities have helped sustain the nation's economy in recent years. In turn, President Cristina Fernandez has tried through export controls and tax increases to secure a larger share of commodity revenues to support social spending.
The raids were carried out as Fernandez sharply criticized the industry during her annual address to Congress on Tuesday. She urged lawmakers to impose new criminal penalties "so that evaders go to jail," and said Argentine farmers and ranchers contributed just 2.8 percent of the nation's tax revenues last year _ an amount roughly equal to revenues generated by private schools.
"Either they're charging very expensive tuition, or there's evasion in the main sector of our economy that needs to be tackled," Fernandez said.
Messages left Wednesday with Bunge, Cargill and Noble Argentina weren't immediately returned. Nidera declared last month that it is fully compliant with its Argentine tax obligations.
Other agribusiness representatives criticized the government's moves on Wednesday even as they acknowledged that tax evasion is a problem.
"I hope that someday she'll learn not to bite the hand that feeds her. There were some inaccuracies in the presidential address," said Roberto Cerutti, president of the agribusiness confederation in provincial Santa Fe, to Argentina's Diarios y Noticias agency. "We're not going to deny there's evasion. Now these kinds of operations end up in nothing."
He said the tax agency "needs to make fewer announcements and work harder."