Argentina: New Court Precedent Regarding Failure To Transfer To Argentina And Sell For Pesos The Foreign Currency Proceeds Derived From The Exports Of Goods

A decision rendered by Room B of the Court of Appeals for Economic Criminal Matters in a case involving the omission to transfer to Argentina and sell for pesos the foreign currency proceeds of certain exports of goods, confirmed the decision of the lower court that found a company not guilty of infringement of the Foreign Exchange Criminal Regime.

On November 30, 2011, Room B of the Court of Appeals for Economic Criminal Matters confirmed the decision of the lower court in the "Guayal S.A.C.I.I.F. y otro s/ Infracción Ley 24.144" case, finding Guayal S.A.C.I.I.F. (the "Company") and an officer of the Company not guilty of infringement of the Foreign Exchange Criminal Regime.

The Court concluded that though the omission to transfer to Argentina and sell for pesos the foreign currency proceeds of export of goods entails a rebuttable presumption of illegal trading of the amounts received as consideration, in the case under analysis the Company proved that it had not collected the proceeds of certain exports of goods given that that obligation had already been cancelled by off-setting with the amount owed by the importer to the exporter in past business transactions, so that "the enforcement of the transfer and sale for pesos of foreign currency proceeds of exports to Argentina, lacks any logic"

Consequently, maintaining the opinion sustained in other court precedents by Room A¹ of the same Court, Room B held that off-setting is a lawful way of extinguishing obligations under the Argentine Civil Code, and as a result, a meritorious reason for omitting to transfer and sell for pesos the foreign currency proceeds of exports of goods.

Furthermore, it is important to highlight that even though both Rooms of the Court of Appeals for Economic Criminal Matters, with jurisdiction in the City of Buenos Aires, have maintained the same criteria regarding off-setting of foreign currency proceeds of exports of goods, the doctrine upheld by these court precedents is general, and could be also reasonably applied to cases of exports of services.

Notwithstanding the above mentioned, it should be noted that not all lower courts follow the criteria applied in the case under analysis, so this new court precedent does not prevent lower courts from holding a different criteria and the Central Bank of Argentina from initiating administrative proceedings for the failure to transfer to Argentina and sell for pesos the foreign currency proceeds of exports, even in cases when the off-setting is invoked as a defense.

Footnote

1. Court precedents "Círculo Latino Austral S.A. s/ Infracción Ley 24.144", "Hijo de Pedro Vincenti S.A. s/ Infracción Ley 24.144", among others.

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