Argentina has done so poorly in confronting money laundering and terrorism financing that it risks becoming the first G-20 nation on a blacklist of countries where financial transactions represent a high risk of criminal activity.

A multinational advisory group, acting on behalf of the Group of 20 industrial and emerging-market countries, said Wednesday that it would closely monitor promised reforms before deciding whether to put Argentina on the list next year.

The Financial Activity Task Force has recommended nearly a thousand changes in Argentina, whose large cash economy makes it relatively easy for criminals to mask the sources of their money. Failure to comply could lead to closer monitoring of international transactions, raising the costs of doing business in Argentina.

"Any country that fails to comply is classified with a grade of risk, to alert the global financial system," said task force president Luis Urrutia of Mexico.

Argentina will present its action plan in February, and late next year the task force should have more of the information needed to decide "whether Argentina should be included on the list," he said.

Urrutia said he met with government ministers, Central Bank authorities, lawmakers, judicial officials and the head of Argentina's money-laundering-control agency, and came away optimistic about the country's ability to change its ways.

"The first step is already being taken by Argentina: the commitment to address these challenges," Urrutia said. "It's still too early to speculate about the decisions we'll have to make. In June we'll have a better idea and in October something more concrete."

The task force's highly critical, 200-page report in October said Argentina fails to comply with the vast majority of international standards for combating money laundering and terror financing.

It identified 962 shortcomings in Argentina's financial system, with detailed fixes that require new laws, regulations and court rulings, as well as profound changes in the way many government agencies operate.

That transformation would be difficult anywhere, but particularly so in Argentina, a country entering a presidential election year that already has so little consensus that President Cristina Fernandez often rules by decree.

Among the problems listed by Urrutia: Argentina has sentenced hardly anyone for the crime of money laundering; the government lacks a unified system of monitoring whether banks comply with financial regulations; there is no efficient means of identifying suspected terrorists and freezing their bank accounts, and the country has a poor record of sharing information with authorities in other nations.

Urrutia said one area of particular concern in Argentina is its large informal economy, which operates in cash to avoid paying taxes.

The president decreed Wednesday that the government's anti-money-laundering agency will have more power to monitor the financial system and even issue fines.

"We'll have to see whether these actions fit within our recommendations," Urrutia said.

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Online:

FATF report: http://tinyurl.com/29gczzg