The Argentine Central Bank Modified its Disciplinary Regime

Communique “A” 6421 (the “Communique”), enacted by the Argentine Central Bank (the “BCRA” after its acronym in Spanish) modifies its applicable disciplinary regime (the “Regime”), amending the following: (i) a 5-day term will apply for submitting and producing evidence, as well as for the subsequent allegation, for all lesser infractions; (ii) upon the imposition of sanctions, suspending fiscal enforcement for a 35-business-day term; (iii) the enabling of new appeals upon the imposition of sanctions, varying depending on the severity of the sanctions; (iv) the creation of a unit of value, the “Unidad Sancionatoria”; and (v) the inclusion of new infractions to the Regime.

With the end of facilitating procedures before the BCRA for minor infractions, the Communique establishes the application of expedited summary proceedings for lesser infractions, reducing the term for producing of evidence to 5 calendar days. The same term will apply, once the applicable term has expired or the evidence has been produced, for submitting allegations.

Moreover, to facilitate the compliance with any monetary sanctions imposed by the BCRA, sanctioned parties may request the suspension of procedural terms for 35 business days, with the immediate consequence of suspending fiscal enforcement. Procedural diligence shall be imposed on the sanctioned party, which must strive to achieve an agreement within 45 business days. After the expiration of this last term, the Central Bank is free to initiate or proceed with the fiscal enforcement of any fines.

Under the new Regime, lesser sanctions (such as warnings or attention calls) may only be appealed before the Central Bank, while more severe sanctions (such as fines, temporary or permanent disqualification or the revocation of the authorization to operate) may be appealed before the Argentine National Appeals Court of Federal Administrative-Contentious matters. In the event that an institution’s authorization to operate is revoked, such institution will be intervened until the appeal has been resolved. All appeals must be filed with the BCRA within 15-business days of the service of notice.

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 has to provide the grounds for its decision.

The Communique establishes the creation of unit of value called the “Unidad Sancionatoria” which must be used as a base for the establishment of fines and will be expressed in Argentine pesos. For the year 2018, the value of the “Unidad Sancionatoria” has been set at ARS 57,500 (approximately USD 2900 at the present exchange rate).

Lastly, the new Regime has included a series of new infractions to the infraction catalogue, amongst which the additions to the categories “Regulations for internal control, internal audit and risk management”, “Regulations for the expansion of financial institutions and foreign exchange agencies”, “Share transfers, management and/or other officers’ designations”, and “Transport of physical assets”, as well as the addition of the category “Others” are worth mentioning.