Emergency Decree 27/1018: Regulations Applicable to Foreign Exchange Agencies

Communique “A” 6443 (the “Communique”), enacted by the Argentine Central Bank (the “BCRA” after its Spanish acronym) approved the new regulations regarding “Foreign Exchange Operators” (Operadores de cambio), which will replace the current regulations on “Foreign exchange agencies and offices” (Casas, agencias y oficinas de cambio) as of March 1, 2018.

The new regulations enacted by the Communique fall in line with the changes enacted by the Argentine Executive through Decree No. 27/2018 of “De-Bureaucratization and Simplification” (Desburocratización y Simplificación) (the “Decree”), which amended article 1 of Decree No. 260/2002. Such amendment allows any party duly authorized by the BCRA to perform “…permanently or regularly the purchase and sale of foreign coins and bills, coined or bullion gold, travelers’ checks, wires, transfers or analogous operations in foreign currency”.  Moreover, the Decree amended Law No. 18,924 of “Exchange Bureaus, Agencies and Offices”, amending the limitations applicable to individuals authorized to operate with foreign currency and abrogating certain restrictions, among others: (i) amending the prerequisite authorization required from the BCRA, introducing a regularity requirement, which was previously absent, for the application of the law, (ii) abrogating the provisions regarding BCRA regulation, regulatory overview and individuals forbidden to operate with foreign currency, and (iii) abrogating the exceptions applicable to financial institutions.

The Communique created the new “Registry of Foreign Exchange Operators” (Registro de Operadores de Cambio) (the “Registry”), which will operate online, be freely accessible, and available through the BCRA’s website. When the Communique enters into force, any and all institutions authorized to operate in foreign currency will be automatically entered into the Registry.

One of the amendments worth highlighting is the fact that companies of any sector which regularly operate in the Free Exchange Market (Mercado Libre de Cambios created by the Decree), as well as any individuals who previously incorporate a Single Shareholder Corporation (Sociedad Anónima Unipersonal) or a Simplified Shares Corporation, may act as foreign exchanges institutions upon registration in the Registry.

Furthermore, foreign exchange bureaus may now carry out foreign trade operations and international money transfers, which will allow them to compete with financial institutions which provide such services to companies.

Only upon exceptional circumstances may the guidelines established in the Regime for the application of sanctions be left aside, and in such cases the BCRA must provide grounds for its decision.

The Communique is part of a framework of measures adopted by the Central Bank which aim to increase competition and transparency in the foreign exchange market through the addition of new players, as well as simplify the corresponding paperwork.

In a press release issued on January 25, 2018, the BCRA informed that “In this way, a supermarket, an appliances chain store, a hotel or any other business may add foreign currency transactions to its core business, as may any individual. Access to foreign exchange is thus simplified, particularly for foreign tourists.”