BCRA: New Regulations on Foreign Exchange Controls

The Argentine Central Bank ( the “BCRA” after its Spanish acronym) provided the following regulations, which will be in force between September 1, 2019 and December 31, 2019:

 

Export of goods

 

• Formalized as of 09.02.19: the corresponding collections must be transferred and sold for pesos in the foreign exchange market, within a maximum term ranging from 15 to 180 calendar days, depending on the goods exported and the relation with the importer, and cannot be sold later than 5 business days as of the date of collection.

 

• Formalized before 09.02.19: to the extent that any collections are pending as of that date, or in the case of new advance payments and export pre-financings, all amounts must be transferred and sold for pesos in the foreign exchange market within 5 business days as of the date of collection or disbursement locally or abroad.

 

• In certain cases, the use of proceeds from exports will be allowed to be used for the cancellation of advance payments and pre-export financings. Cases not provided for by existing regulations will require prior approval by the BCRA.

 

 

Export of services

 

• Proceeds must be transferred and sold for pesos in the foreign exchange market within a term no longer than 5 business days as of the date of collection locally or abroad, or their clearance in foreign accounts.

 

Access to foreign exchange markets for Argentine residents

 

• Companies and others

 

• • Prior approval by the BCRA will be required for the creation of external assets and the granting of any kind of guarantees related to the instrumentation of derivative transactions.

 

• Natural persons

 

Prior approval by the BCRA will be required for the creation of external assets, family aid, and the granting of any kind of guarantees related to the instrumentation of derivatives transactions when exceeding the equivalent of USD 10,000 on a monthly basis in the aggregate of institutions authorized to operate in foreign exchange for all concepts provided by in the regulations.

 

Access to foreign exchange markets for non-Argentine residents

 

• Prior approval by BCRA will be required for any amount above the equivalent of USD 1,000 on a monthly basis in the aggregate of institutions authorized to operate in foreign exchange.

 

Transactions made by, for example, international organizations and institutions which fulfill the role of official export credit agencies, among others, are excluded from this limit.

 

Financial indebtedness with non-Argentine residents

 

• New financial indebtedness as of 09.01.19 must be transferred and sold for pesos in the foreign exchange market as a requirement to service capital and interest payments.

 

Obligations of Argentine residents in foreign currency

 

• Access to the foreign exchange market is restricted to such obligations agreed to as of 01.09.19.

 

• Access to the foreign exchange market will be permitted for the obligations instrumented by means of public registries or deeds as of 08.30.19.

 

Profits and dividends

 

• Prior approval by BCRA will be required before payment.

 

Prepayment of foreign financial indebtedness capital and interest services

 

• Prior approval y BCRA for prepayment will be required with more than 3 business days prior to maturity.

 

Imports of goods and services

 

• Prior approval by BCRA will be required for prepayment of debts.

 

Prior approval by BCRA will be required for the payment of overdue or on demand debts with foreign related companies when in excess of USD 2 million per month per resident client.

• In the case of prepayment, requirements include providing supporting documentation, proving registration of the entry of good through customs within 180 business days of access to foreign exchange market and the recipient of the funds must be the foreign supplier.

 

Services with foreign counterparties

 

• Prior approval by BCRA will be required for the payment of services to related parties abroad, except for credit card issuers for transfers made for tourism and trips.

 

Foreign currency swap and arbitration

 

• These operations are allowed without prior approval by BCRA to the extent that, if instrumented as individual operations settled through pesos they are allowed without prior approval.

 

Blue chip swap operations

 

• Institutions authorized to operate in foreign currency are not allowed to purchase securities with settlement in foreign currency nor use holdings from their General Foreign Currency Position for payment to local suppliers. In spite of the fact that Decree No. 609/2019 enables BCRA to establish regulations regarding operations through securities, the Communique does not refer to other persons other than entities regulated by BCRA.

 

Foreign exchange agencies and offices

 

• Foreign exchange agencies and offices will require prior approval from BCRA to increase their foreign currency position in respect the highest of their average holdings as of August 2019, or their holdings at close of business of the last day before the entry into force of the Communique.

 

Foreign exchange tickets

• All foreign exchange operations must be instrumented through foreign exchange tickets, which will be considered affidavits.

 

Foreign assets and obligations survey

• Financial or commercial indebtedness must have been reported in the latest expired presentation for the payment thereof.

 

Criminal Exchange Regime

All transactions in breach with the provisions included in foreign exchange regulations will be subject to the Criminal Exchange Regime.