Argentina Central Bank clarifies and adjusts certain aspects of the new foreign exchange regulations
On September 11, 2019 the Argentine Central Bank (“BCRA”) issued
Communiqué “A” 6780 that introduced, among others, the following clarifications
and adjustments to the exchange control regime in force since September 1, 2019
(see legal update about the reinstate of exchange restrictions):
1. Limitation on the formation of “foreign assets”
It is established as an additional requirement to access the foreign exchange market for the purchase of foreign currency by resident individuals within the limit of US$10,000 per month, the filing of an affidavit stating that the purchased funds shall not be used for the purchase of securities in secondary markets within 5 business days as from the date of settlement of said foreign exchange transaction.
2. Limitation on derivative transactions
It is clarified that prior approval of the BCRA to access the local exchange market includes all derivative transactions, including not only the incorporation of guarantees but also premium and cancellation payments. In addition, it is established that all derivative transaction settlements performed on regulated markets in Argentina and carried out by entities authorized to perform foreign exchange transaction shall be made in Pesos as from September 11, 2019.
3. Limitation on import payments
With respect to the prior approval of the BCRA for payment of imports to affiliates (either at sight or due) for an amount exceeding the equivalent of US$2 million per month, it is clarified that it will be deemed “at sight or due debts” those outstanding as of August 31, 2019, including those which due date have occurred before such date and those with no stipulated due date.
4. Access to the exchange market by trusts
It is clarified that collateral trusts (fideicomisos de garantía) constituted by residents issuers of debt securities have access to the local exchange market as long as the respective issuer would have had access for making the relevant payment.
5. Repatriation of non-financial, non-produced assets
Argentine residents will need to repatriate and to exchange into Pesos the collections in foreign currency, paid either in Argentina or abroad, for the disposition of “non-financial, non-produced assets” (activos no financieros no producidos) within 5 business days from collection thereof. Although the scope of such terms is not contemplated, in international accounts (including the methodology followed by the National Institute of Statistics and Censuses – Instituto Nacional de Estadísiticas y Censos) the concept includes the sale of land by embassies and the sale of concession property rights, trademarks, contracts, licenses, going concerns and the sale of sports passes between resident and non-resident clubs.
6. Limitation on payments of services to non-resident affiliates
It is clarified that prior approval by the BCRA for the payment of services rendered by non-Argentine resident affiliates shall not apply to the payments abroad of reinsurance premiums as long as the transfer is performed in favor of the foreign beneficiary authorized by the Insurance Superintendence (Superintendencia de Seguros de la Nación).
7. Foreign exchange agencies
The authorizations granted to exchange agencies before September 1, 2019 which do not initiate activities before September 30, 2019 will expire as of the latter date.
Should you need further information do not hesitate to contact Victoria Funes and/or Fermín Caride.