As of June 3rd, 2003, Law 25,738 has been published in the Official Gazette. This new law sets forth certain obligations for local or foreign financial entities authorized by the Argentine Central Bank ("BCRA") to operate in Argentina.
In this sense, Law 25,738 establishes that local financial entities of foreign capital, as well as local branches of foreign financial entities authorized to operate in Argentina by the BCRA, shall inform the public in general, such cases in which their headquarters or controlling foreign shareholders shall be liable for the operations of the local entities in Argentina, as well as the scope of such guaranties.
In case such guarantees do not proceed, the local entities shall clearly state that their banking operations are not backed-up by their headquarters nor by their controlling foreign shareholders.
The local entities shall comply with their information duty through ads placed in each of their premises, at such places easy to read. In addition, such information shall be included in their web pages as well as in all publicity made by any means of communication or delivered in their premises with the purpose of promoting their services.
The new law shall also be applicable to any financial entity operating in Argentina or which has requested authorization to operate as of the effective date of the law (i.e., the day after its publication in the Official Gazette).
Finally, the requirements of the new law shall be complied with at all times during the life of the local entity. Failure to comply with the law shall be punished by the BCRA (the enforcement authority through its Superintendence of Financial and Foreign Exchange Entities), pursuant to the corresponding regulations.
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.