Regulatory summary | Argentina
On May 28, 2020 the Central Bank of the Republic of Argentina (the “Central Bank”) issued Communication “A” 7030 which established new requirements for the access to the foreign exchange market. Find below the mains aspects of said regulation.
Extension of the Central Bank´s prior authorization requirement
Pursuant to the aforementioned regulation, the prior authorization of the Central Bank is required to carry out, among others, the following transactions:
1. Payment of imports and other purchases of goods abroad.
2. Payment of services provided by non-residents.
3. Payment of interest of debts for import of goods and services.
4. Payments of profits and dividends.
5. Payment of principal and interest of foreign financial indebtedness.
6. Payment of debt securities denominated in foreign currency with public registration in the country and obligations in foreign currency among residents.
7. Payment of indebtedness in foreign currency of residents by trusts established
in the country to guarantee the attention of the services.
8. Purchase of foreign currency by other residents –excluding the institutions– for
the formation of foreign assets and for derivatives.
9. Payment of premiums, constitution of guarantees and cancellations corresponding to interest rate hedge contracts for the obligations of residents abroad.
The aforementioned requirement is excepted with the submission of an affidavit
stating that at the time of access to the foreign exchange market:
i. All foreign currency holdings in the country are deposited in accounts in financial institutions and that it does not have available liquid foreign assets (e.g. holdings of foreign currency banknotes, deposits at sight in foreign financial institutions and other investments that allow immediate availability of foreign currency, crypto assets, funds in accounts of providers of payment services, etc.); and
ii. It commits to settle in the foreign exchange market, within five (5) business days of their availability, those funds that it receives abroad originated from the collection of loans granted to third parties, the collection of a term deposit or the sale of any type of asset, when (i) the asset had been acquired, (ii) the deposit made, or (iii) the loan granted, after May 28, 2020.
This requirement will not be applicable for the access to the foreign exchange market that corresponds to:
a. Financial institutions own transactions in their capacity of clients,
b. Cancellations of financing in foreign currency granted by local financial institu- tions for the consumption in foreign currency made by credit or purchase card; and
c. Payments abroad of non-financial companies’ issuer of cards for the use of credit, purchase, debit or prepaid cards issued in the country.
Payment of Imports
Likewise, until June 30, 2020, the prior authorization of the Central Bank is re- quired to access the foreign exchange market to make payments for imports of goods corresponding to:
1. Prepayments of import of goods,
2. Deferred payments of import of goods,
3. At sight payments of import of goods,
4. Payment of commercial debts for import of goods without customs entry record,
5. Prepayment of import of capital goods, and
6. The cancellation of principal of debts originated in the import of goods.
Fulfillment of said requirement is excepted with, in addition the compliance with the remaining requirements established for the operation by the foreign exchange regulations, the submission of an affidavit stating that the total amount of pay- ments associated with its imports of goods carried through the exchange market during the year 2020 -including the payment whose course is being requested- does not exceed the amount by which the importer would have access to the for- eign exchange market when computing the imports of goods that appear in his name in the payment of goods import tracking system (SEPAIMPO) and that were made official between January 1, 2020 and the day before the access to the for- eign exchange market.
Payments for cancellations of credit lines and / or commercial guarantees pursu- ant to imports of the client are included for purposes of such computation.
Such affidavit is not required in the following cases, among others:
i. the public sector,
ii. legal entities that are responsible for the provision of critical medications to patients when they make prepayments for this type of goods to be entered by courier on behalf of the beneficiary of said medical coverage
iii. the payment of imports with pending customs registration destined to the pur- chase of kits for the detection of the coronavirus COVID-19 or other goods whose tariff positions are included in the list disclosed by Decree No. 333/2020 and com- plementary, and
iv. the payment of imports with pending customs registration to the extent that the amount pending regularization by the client for similar payments made as of Sep- tember 1, 2019, does not exceed the equivalent of USD 250,000, including the amount for which the access to the exchange market is request.
Payment of foreign financial indebtedness with related parties.
Until June 30, 2020, the prior authorization of the Central Bank will be required to access the foreign exchange market for the cancellation of services of principal of foreign financial indebtedness with a related party.
Extension of the terms between access to the foreign exchange market and sale of securities against foreign currency.
The Central Bank extended from thirty (30) to ninety (90) days the period between the performance (i) a securities transaction with settlement in foreign currency or their transfer to a foreign depository entity located overseas; and (ii) a transaction corresponding to an access to the foreign exchange market.
Likewise, the term of the commitment to not make sale of securities with settle- ment in foreign currency or their transfer to foreign depository entity located over- seas was also extended from thirty (30) to ninety (90) days from the moment when the access to the foreign exchange market is made.
This requirement will not be applicable to egresses related to:
1. Institution own operations in its capacity of client,
2. Cancellations of financing in foreign currency granted by local financial institu- tions, including payments for consumptions in foreign currency made by credit or purchase cards; and
3. Transfers abroad in the name of natural persons who are beneficiaries of re- tirements and/or pensions paid by the ANSES, to the extent they are automatically processed by the entity as attorney-in-fact.