The Central Bank Announces New Rules to Regulate Access to the Foreign Exchange Market

Communiqué “A” 6244 (“Communiqué 6244”), enacted by the Central Bank of the Argentine Republic (the “Central Bank”) established new regulations regarding access to the Foreign Exchange Market (Mercado Único y Libre de Cambios, hereinafter the “FX Market”), abrogating in the act all prior regulations on the matter. The Communiqué will come into force on July 1, 2017.

Under the Communiqué, the Argentine Central Bank continues to lift restrictions and deregulate access to the FX Market, eliminating all requirements for the transfer of funds to and from Argentina.

Communiqué 6244 abrogates all foreign exchange regulations predating it which restricted access to the FX, leaving in place only the obligation to comply with certain reporting regimes such as the “Survey on issuance of notes and other liabilities of the private financial and non-financial sectors” enacted by Communiqué “A” 3602 and the “Survey on direct investments” enacted by Communiqué “A” 4237, and the obligation to register and settle all payments for goods for export (which continues to be within the term of 10 years as of the shipment date).

In turn, the Communiqué eliminates the requirement to instrument foreign exchange transactions through foreign exchange tickets.

Moreover, the simplification of foreign exchange transactions reduced the amount of information customers must provide to financial and foreign exchange institutions when carrying out such transactions.

Furthermore, all time restrictions for foreign exchange transactions were eliminated. Transfers made from abroad in foreign currency must be credited directly into the beneficiaries’ local accounts; in the event that the local account is denominated in a currency other than that in which the transfer was made, the amount credited must be calculated taking into account the exchange applicable on the date on which the operation was made.

In this same line, Communiqué 6244, continuing the precedent set by Communiqué “A” 6237, allows financial and foreign exchange institutions to freely determine the level and use of their general exchange position.

In regards to the export of goods, the Communiqué allows for the allocation of export proceeds directly to certain financing operations, such as: (i) advanced payments for the export of goods; (ii) pre-export financings; (iii) post-export financings; (iv) settlements related to financings of exports to non-Argentine residents provided by local financial institutions; and (v) financial indebtedness such as (a) the issuance of notes abroad; (b) financial loans from international organizations, official credit agencies, multilateral banks and other foreign financial institutions, or (c) loans in foreign currency granted by local financial institutions in which the contract states that the exporter must apply all receivables to certain accounts to guarantee the payment of debt services and/or maintain such financings.

Foreign currency held abroad may also be allocated to payments to non-Argentine residents for: (i) premiums, guarantees and/or cancelations of coverage contracts over the financings interest rate; and (ii) charges for the granting of payment guarantees in the event of debtors default granted by foreign financial institutions.