I. Communication "A" 5274
Communication "A" 5274 issued by the Central Bank of the Argentine Republic ("BCRA") became effective on January 31, 2012. As a consequence thereof, some changes were made in the system in force for the purchase of foreign currency by Argentine residents in the Single Free Foreign Exchange Market, (Mercado Único Libre de Cambios, "MULC") to cancel debts from imports. In particular, such amendments are supplementary to the provisions set forth in Resolution 3252/2012 issued by the Federal Administration of Public Revenue (Administración Federal de Ingresos Públicos, "AFIP"), whereby a sworn statement must be filed prior to the issue of a purchase order.
Accordingly, Argentine residents who intend to access the MULC for the purpose of purchasing foreign currency to honor obligations for imports of goods, shall file such sworn statement and obtain the relevant approval by AFIP.
II. Communication "A" 5295
Communication A 5295 issued by the BCRA became effective on April 3, 2012. It amended the system applicable to remittances abroad to pay services, income and current transfers.
Communication A 5295 sets forth more stringent formal requirements to access the foreign exchange market at the time of payment/maturity of the obligation that must be honored. Thus, for example, in case of services that have no direct relationship with the activity performed by the payor, an authenticated copy of the underlying agreement on which the relevant obligation is based shall be submitted and, additionally, some specific requirements must be satisfied regarding the information to be included in the external auditor's report about the existence of the obligation it is intended to satisfy.
In case of payment for information and computing services, professional and technical entrepreneurial services, royalties, patents and trademarks, premiums for loans of players, copyrights, personal, cultural and recreational services, payments of commercial guarantees for exports of goods and services, exploitation rights of foreign movies, video and audio, transfer of technology services under Law No. 22,426 (except for patents and trademarks) BCRA´s prior authorization shall be required for payment purposes when the beneficiary is a natural or corporate person: (i) either directly or indirectly related to the local debtor, or (ii) residing or organized or domiciled in such domains, jurisdictions, territories, or associated states of null or low taxation, or (iii) when payment is made to an account in such jurisdictions.
BCRA´s prior authorization shall not be required in case of agreements that do not generate, in the calendar year, payment obligations and/or debts in excess of the equivalent of One Hundred Thousand United States Dollars (U$S 100,000). Notwithstanding the foregoing, it is necessary to provide evidence of the registration of the relevant agreements in the relevant registries, as required by law, as of the date of the remittance or transfer.
The period of time for payment before the maturity date of interest on unpaid obligations or obligations that are paid simultaneously with interest amounts has been reduced. Pursuant to Communication 5295, as from April 3, 2012, the exchange transaction for the purchase of currency may be perfected 5 business days (such term was previously fixed at 15 calendar days) before the maturity date of each interest installment in arrears.
The requirements for payment of profits and dividends abroad to non-Argentine resident shareholders and holders of ADRs (American Depositary Receipts) and BDRs (Brazilian Depositary Receipts) were also modified. If applicable, a declaration of foreign indebtedness shall be submitted together with the validation of the reported data under such obligation and evidence of having complied with the survey on direct investments set forth in Communication A 4237. BCRA´s prior authorization shall also be requested in connection with payments by the local foreign exchange market for the purchase of non produced non financial assets (for example, sales and purchases of land, sales and purchases of patents, trademarks, copyrights, transfers of sportsmen, sales and purchases of going concerns), when the beneficiary is a natural or corporate person related to the local debtor, either directly or indirectly, or the beneficiary resides or is organized or domiciled in domains, jurisdictions, territories or associated states of low or null taxation , or when payment is made to an account in such jurisdictions.
Furthermore, Communication A 5295 has also amended the rules applicable to payment of reinsurance premiums, sale of foreign exchange to non Argentine-residents for tourism and traveling purposes as well as payment of rentals of real property located in Argentina owned by non-Argentine residents and other payments of income abroad.
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.