New regulations by the Central Bank on exports of goods

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Legal Update

NEW REGULATIONS BY THE CENTRAL BANK ON EXPORTS OF GOODS

On September 19, 2019, the Argentine Central Bank (the “Central Bank”) issued Communiqué “A” 6788, which set new regulations on exports of goods, replacing the regulations set forth in paragraphs 1 to 3 of Communiqué “A” 6770 (see our legal update) and its amendments and supplements.

1. Repatriation of export receivables

Receivables from exports of goods corresponding to export shipments approved as from September 2, 2019, shall be repatriated and exchanged into Pesos through the Argentine foreign exchange market within a certain maximum term counting as from the date the exports shipment is approved by Customs: 15/30/60/180 days depending on the type of good exported and whether the counterparty qualifies as affiliate. A 365-day term is set for the exports performed under the “simple export regime”, irrespective of the type of good exported.

Notwithstanding the mentioned maximum terms, exporters will need to convert into Pesos the exports proceeds within five (5) business days from collection thereof.

Export proceeds corresponding to unpaid exports made before September 2, 2019 will need to be repatriated and converted into Pesos within five (5) business days from collection thereof.

2. Application of receivables from exports of goods

Exporters will be entitled to apply receivables from exports of goods to repay principal, interest or expenses resulting from: (i) advance payment of exports which have been converted into Pesos before the approval of the export shipment by the Customs; (ii) pre-export facilities granted to the exporter by a local financial entity or by a non-resident different from the importer which have been converted into Pesos before the approval of the export shipment by the Customs; (iii) post-export facilities granted to the exporter by a local or foreign financial entity or by international credit facilities agencies for delivered goods; (iv) funds in Pesos granted by local financial entities under financings to foreign importers for the acquisition of certain goods produced in Argentina; (v) financial loans in place as of August 31, 2019 that contemplate the repayment through the application of exports proceeds; (vi) pre-export facilities and export financings granted or guaranteed by local financial entities outstanding as of August 31, 2019, that were converted into Pesos through the Argentine foreign exchange market; and (vii) advance payment of exports and pre-exports facilities outstanding as of August 31, 2019, that were not converted into Pesos through the Argentine foreign exchange market as long as certain conditions are met.

The application of proceeds from advance exports of goods to the repayment of local and/or external pre-exports facilities is also allowed. In case of external pre-exports facilities outstanding as of August 31, 2019 and pending of conversion into Pesos, the Central Bank’s prior approval is required.

3. Follow-up of the obligation to convert into Pesos receivables from exports of goods (SECOEXPO system)

The follow-up includes all the exports of goods carried out as from September 2, 2019, and which have obtained the approval of the exports shipment by Customs.

For each export, the exporter shall appoint an entity (financial entities or exchange houses which perform foreign trade) (the “FX Trader”) for the follow-up of the export shipment at the time the approval of the export shipment is obtained before the Argentine Tax Authority (“AFIP”).

The SECOEXPO system set by the Central Bank shall allow the FX Trader to access the information available in AFIP in order to make the follow-up. The FX Trader shall calculate the amount and term for the corresponding repatriation and settlement.

3.1. Settlements eligible to obtain “complied-exports”

It is authorized that the following settlements apply to obtain “complied-exports”: (i) any collection of exports of goods converted into Pesos after the approval of the exports shipment by the Customs; (ii) inflows from own off-shore accounts; (iii) settlements carried out by payment processing companies through the foreign exchange market and credited in local accounts in Pesos in the name of the exporter; (iv) inflows through the System of Local Currencies (Sistema de Monedas Locales).

3.2. Other settlements permitted to obtain complied-exports

The FX Traders may grant total or partial “complied-exports”, among others, in the following cases: (i) exports carried out under the customs benefit EXPONOTITONEROSO o EXPOSINVALORCOM, (ii) reshipment of goods from the Argentine free-customs zone, re-export of goods entered under the in-factory customs scheme; (iii) goods totally or partially rejected at destination and re-imported; (iv) missing goods, reductions or failures registered in the shipping documentation; (v) goods damaged before their delivery; (vi) discounts and expenses of services payable abroad which are registered in the shipping documentation; (vii) expenses related to the placement of goods abroad which are not included in the shipping documentation; (viii) tax withholdings in the country of destination; and (ix) inflows settled through payment processing companies.

Additionally, certain transactions are excluded from the follow-up regime, among others: store for consumption regime (régimen de rancho), personal effects (pacotilla), diplomatic exemption, sample, advertising material, luggage, assistance and salvage, human blood and organ donation, and exports on consignment.

Notwithstanding that an export may be excluded from the follow-up regime if the exporter receives collections from such export, the exporters shall comply with the obligation of repatriate and convert into Pesos the corresponding collections.

3.3. Non-complied-exports under payment process

Exports shipments may qualify as “non-complied exports under payment process” (incumplido en gestión de cobro) until the importer makes the relevant payment, in the following cases: (i) exchange control restriction in the country of the importer; (ii) insolvency of the importer after the shipment of the goods; and (iii) debtor’s default, in which case the exporter shall file legal actions in the country of the importer unless, among other cases, the amount that is pending of settlement does not exceed US$100,000 in the calendar year, in which case it will only be necessary to file evidence of the extrajudicial claim against the importer and a certification of the external auditor if the amount exceeds US$25,000.

4. External advance payments of exports, pre-export and post-export facilities

The new external advance payments of exports, pre-export and post-export facilities shall be repatriated and exchange into Pesos within five (5) business days from collection or disbursement in Argentina.

The new external advance payments of exports, pre-export and post-export facilities granted to foreign importers by local financial entities shall be repatriated and exchange into Pesos at the time of disbursement.

The following operations are subject to the follow-up regime: (i) settlements through the foreign exchange market as from September 2, 2019 corresponding to advance payments of exports, pre-export facilities and other financings for which repayment through exports collections is permitted; (ii) pre-export facilities and export financing outstanding as of August 31, 2019, that have been granted or guaranteed by local financial entities; (iii) external advance payment of exports and pre-export facilities outstanding as of August 31, 2019, that were settled through the local foreign exchange market and for which the exporter requests to apply export shipments approved by Customs as from September 2, 2019; (iv) external advance payment of exports and pre-export facilities outstanding as of August 31, 2019, that were not settled through the local foreign exchange market and for which the exporter requests to apply export shipments approved by Customs as from September 2, 2019; (v) financial loans in place as of August 31, 2019 that contemplate the repayment abroad through the application of exports proceeds and for which the exporter requests to apply export shipments approved by Customs as from September 2, 2019.

The FX Trader shall be responsible for the issuance of the application certificates, which allow the export collections to be applied to the corresponding export shipment.

The access to the foreign exchange market to repay external advance payments of exports and export financings without the application of exports proceeds shall be governed by foreign exchange regulations applicable to the repayment of financial loans.

Should you need further information do not hesitate to contact Fermín Caride and/or Victoria Funes