ANNOUNCED AS TEMPORARYNo
Controls on commercial transactions and investment instruments
The Argentine Central Bank via the issuance of Communication “A” 5850 on 17 December 2015, amended the current exchange control regime. It includes several amendments with relevance for foreign commerce.
1) Purchase and transfer of foreign currency
The requirement for an authorization by the Argentine Central Bank in order to purchase and transfer foreign currency has been removed. The denoted requirement removal is only relevant to the following financial transactions: Real estate investments made abroad; Loans granted to non-Argentine residents; Direct, portfolio and other investments abroad made by Argentine residents; Portfolio investments abroad made by Argentine legal entities; Purchase of foreign currency bills to be held in Argentina; Purchase of traveller checks. However, among other conditions, the aggregate maximal amount that can be purchased under these transactions is USD 2.000.000 on a monthly basis.
2) Program of Consultations for Foreign Exchange Transactions
The “Program of Consultations for Foreign Exchange Transactions” that was run by the Federal Tax Collection Agency has been eliminated. This program required for the purchase of foreign currency for savings and travelling and tourism be registered and authorised by the AFIP.
3) Inflow and Foreign Currency Settlement
The requirement of mandatory inflow and settlement of funds that are a result of transactions related to foreign indebtedness has been removed. Nevertheless, the settlement of these types of funds through the FX Market will be necessary in order to access the FX Market to pay principal and interest.
Another notable change is the reduction of the minimum stay period of foreign indebtedness from 365 to 120 calendar days.
In addition, the regulatory regime relevant to export advances and pre-financings is no longer in force. Therefore, eliminating all the requirements necessary for an advance payment or a pre-export financing be treated as a commercial debt.
The maximum limit to the general exchange position that financial entities are obliged to hold is re-established to 15% (the previous limit was 5%).
Moreover, as of the effective date of this Communication financial entities will be allowed to access the FX Market in order to cover their currency needs for the purpose of purchasing and selling securities under their ownership. The prior is applicable to the following transactions: external financing in the form of repos; primary bonds subscription, where the bonds need to be issued by the National Government and the National Bank as well as need to be denominated and subscribed in foreign currency; and transactions related to bonds - should they be registered in self-regulated Argentine stock exchanges and securities markets.
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