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The Argentine Central Bank amended regulations on the
requirements for the purchase of external assets and the payment of
services.
Through Communication "A" 5318, effective as of July
6, 2012, and Communication "A" 5330, effective as of July
27, 2012, the Argentine Central Bank (the "Central Bank")
set new changes on the legal framework that regulates the access of
Argentine residents to the Argentine foreign exchange market
(Mercado Único y Libre de Cambio or MULC)
for the purchase of external assets (commonly referred to as
"atesoramiento" or "investment") and
the payment of services.
The following are some of the most important changes:
1. Outflow of foreign currency
Communications "A" 5318 and "A" 5330 amended
Section 3 of Communication "A" 5264:
a. Argentine residents, legal entities, local governments and
universities can access the MULC to purchase foreign currency under
the item "tourism and travel" with the prior
authorization of the Federal Tax Authority ("AFIP") and
with the fulfillment of certain requirements, such as a sworn
statement of the client and the commitment to return the funds if
the trip is suspended. Moreover, the AFIP's validation is
not needed when the foreign currency transaction involves: (i)
transfers abroad regarding the payment of credit card consumptions
and ATM withdrawals made abroad; (ii) transfers abroad from tourism
and travel agents that are registered as such with AFIP; and (iii)
sales to non- Argentine residents that do not exceed US$ 1,000 per
calendar month and client.
b. Regarding the payment of services, Communication
"A" 5318 included merchant fees among the items that
require the Central Bank's prior authorization to access
the MULC established by Communication "A" 5264. In
addition, it clarifies that, regarding services contracts and
renting or leasing of local estate owned by non-Argentine
residents' contracts that generate payments or debts higher
than US$ 100,000 during a calendar year, the prior authorization is
needed when the accrued charges exceed US$ 100,000, regardless of
the year of the accrual. That is, if the transaction does not
exceed the amount above at the moment of access in the MULC, the
transaction does not need the Central Bank's prior
authorization.
c. Communication "A" 5318 established that the Central
Bank's prior authorization is not needed when the purchase
of foreign currency is for donations and to the extent that the
following requirements are met: (i) when the receiver of the funds
is a governmental entity, an international organization or an
international entity recognized for its activities of charitable
contributions; and (ii) the allocation of the funds is to cope with
natural disasters or healthcare emergencies.
d. Communication "A" 5330 increased the restrictions
set for transferring foreign currency abroad for family assistance.
The Central Bank's prior authorization is needed when the
transfer of funds abroad is higher than an amount equal to US$
1,500 per client per month. Moreover, the transfers that are higher
than an amount equal to US$ 300 per client and per month must be
must be executed by a client's check or charged to the
client's at sight account in a local financial entity.
e. Transfers under the item of scholarships and education
expenses must be made by residents to educational institutions.
2. Investment
Communication "A" 5318 suspended indefinitely the
access of Argentine residents to the MULC for the purchase of
external assets without Central Bank prior authorization. That is,
regulations that authorized the purchase of foreign currency,
subject to the limit of US$ 2,000,000 per month, for real estate
investments abroad, loans granted to non-residents, residents'
contributions for direct investments abroad, other investments of
residents abroad, legal entities' portfolio investments
abroad, purchase for saving of foreign bills in the country,
purchase of travelers' checks and donations were
suspended.
3. Mortgage credit
Individuals may access the MULC to purchase foreign currency in
relation to long term mortgage credits that have been prearranged
at the date of the effectiveness of Communication "A"
5318 until October 31, 2012. Additionally, the funds must be
destined simultaneously to the payment of the purchase of the
housing. These transactions shall be made under the item
"Purchase of foreign currency with mortgage credit
funds".
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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