Argentina: Exchange Regulations

Last Updated: 16 September 2019
Article by John O'Farrell

On September 1st. 2019, the National Government released Decree Nº 609/2019, which was regulated in the same day (Sunday) by the Central Bank of the Argentine Republic ("BCRA") by Communication "A" 6770. With these regulations, with a temporary effect (only from September 1 until December 31, 2019, an exchange control has been re installed, which was almost completely flexible at the end of 2015.

Please find below the main aspects of the new regulation:

  • Restoration of the mandatory entry and settlement of the currencies from export transactions:
    • Shipment Permissions formalized as from 02/09/2019
      • Transactions with related companies and exports included in the first table of the annex of the resolution 57/2016 (which includes as well commodities) with a maximum period of 15 days.
      • Other transactions: 180 days.
  • Notwithstanding the above expiration dates, the exporters will have to settle the currency in a maximum period of 5 business days after collection. (This means that the operations formally completed before 01/09/2019 are reached by this obligation [it reaches not only the collection of exports but also the advances and pre-funding]).
    • The collection of exports of services must also be entered and settled in the same period, which is counted since its date of collection (locally or abroad).
  • The collection of exports could be used to pay advances and borrowings of pre funding of exports in specific cases, and for the rest of the cases the authorization of BCRA is required.
  • Individuals may purchase foreign currency by having access to the exchange market with a limit of USD 10,000 per month. 
  • It also determines the limit of USD 10.000 monthly for transfers of funds to foreign accounts per human person –without previous authorization- (For legal persons a previous authorization of the BCRA is required, without regard to the amount to be transferred).
  • There are no limitations to extract dollars from the accounts, or restrictions on travelling outside the country (for legal entities or individuals).
  • Previous authorization of BCRA to get access to the exchange market –mainly for the formation of external assets 1- of legal persons, i n div id u al s (regulating differently between residents: for whom the familiar support, constitution of warranties related to  derivative transactions when they exceed the amount of USD 10.000 and non-residents, when they go over USD 1.000 monthly, it also establishes exceptions).
  • BCRA must authorize the purchase of currencies and foreign transfers by companies.
  • Restoration of the control of new financial debts taken with foreign lenders, establishing the obligation of entry and settlement.
    • Previous authorization of BCRA is required for: (a) the prepayments with more than 3 business days before the expiration of services of capital and interests and (b) the prepayment of debts for imports of goods and services.
      • The conformity by BCRA it is also required for:
        • 1. The payment of expired debts or on demand debts for import of goods with related foreign companies when it exceeds the equivalent of USD 2.000.000 monthly per local resident entity.
        • 2. The payment of services with related foreign industries (except for the card issuers for turns for tourism and travels).
  • It is not required previous authorization from BCRA in transactions of exchange and arbitration with clients, provided that if they were instrumented as individual operations passing to pesos they could be made without that conformity.
  • It denies the access to the market to pay debts and other obligations in foreign currency between residents, concerted from September 1st, 2019 (except those formalized with registers or public deed at before August 30, 2019.
  • Legal entities are not entitled to purchase foreign currency for saving purposes.
  • The transfer of earnings and dividends will require previous authorization of BCRA.
  • BCRA is entitled to issue regulations to prevent the formation of a parallel exchange market.
  • The authorized entities to operate in exchange will not be able to perform purchases with settlements in foreign currency securities in the secondary market or use holdings for paying to local providers.
  • It will be required a buy/sell ticket of exchange for each operation with the character of sworn statement.
  • To pay foreign commercial or financial debts it must be demonstrated that the operation was reported (Communication 6401).
  • Also, to pay imports in advance, it is required:  Supporting documents 
  • To evidence customs clearance between the following 180 days of the access to the exchange market.
  • The consignee of the funds must be the foreign provider.
  • The social security debts could be paid with the re structured public bonds.
  • The Banks with branches in the capital city are allowed to extend the time of attention to the public up to the hour 17.00 for a month.

Remaining at your disposal to extend the present report,

Footnotes

1 The Concept codes of extern actives covered by the regulation are the following:

A01: Debt instruments between affiliated companies

A02: Investments in real state goods of residents

A03: Other direct investments of residents

A04: Debt instruments

A06: Loans given to non-residents

A07: Deposits of residents in a foreign country

A08: Other investments in a foreign country made by residents

A09: Cash and checks of travelers in power of residents

A14: Incomes of pay processing companies for trading of goods and services

A16: Cash associated to operations between residents

A17: Transfers from/to foreign countries associated to operations between residents.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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