The Argentine Foreign Exchange Regime is becoming more flexible by measures adopted by the Central Bank

One of the amendments introduced by the Communication “A” 5937 (hereinafter, the “Communication”) is the elimination of the requirement pursuant to which a non-Argentine resident must provide evidence of the sale in the Argentine foreign exchange market of the funds from its investment and comply with the minimum mandatory waiting period of 120 days, in the following cases:

1. Investments performed by individuals during their residence in Argentina, who then have left the country to live abroad when the investment was made with funds out of the scope of the Decree No. 616/05 (which regulates the inflow of foreign currency in the Argentine foreign exchange market in order to control flows of speculative capital); and

2. When the investment has its cause in the collection of funds in Argentina resulting from a transaction for which the non-Argentine resident would have had access to the Argentine foreign exchange market for the funds’ repatriation at the time of the collection.

Additionally, pursuant to the Communication, financial institutions are no longer required to request evidence that, as from the date of the collection of funds in Argentina until the date of access to the local exchange market, the funds received in the country by a non-Argentine resident as a result of the sale or liquidation of its portfolio investment have not been applied to other investments in Argentina.

Furthermore, the Communication admits access to the Argentine foreign exchange market of Argentine residents for the purchase of external assets in order to apply them to a specific purpose without the prior approval from the Central Bank, in the following cases:

1. Purchases of foreign currency, without any limits, made by public companies, private companies under the control of the national and/or local governments and trusts set up with funds from the public sector, provided that the acquired funds be deposited in foreign currency local bank accounts, in order to guarantee payment of Argentine imports of goods; and

2. Purchases of foreign currency without any limits, provided that the funds are deposited in local or foreign bank accounts, in order to guarantee the payment of imports of goods carried out after the date of access to the Argentine foreign exchange market, subject to the following requirements: (a) at the date of access to the Argentine foreign exchange market, the importer does not register delays in the accreditation of the nationalization of the import customs clearance; (b) funds are used for the payment of imports within 365 calendar days from the date of access to the Argentine foreign exchange market; (c) the appointment of a local financial institution, in charge of the supervision of the purchases of foreign currencies and their application and of reporting any eventual breaches to the applicable rules to the Central Bank, among others. If the foreign currency is not applied to a specific purpose within the due term, funds must be sold in the Argentine foreign exchange market within 5 business days after the closing date of said term.

Lastly, with regard to advanced payments and pre-financing of exports, the Communication established that the financial entity in charge of their settlement will be appointed as the monitoring entity (“entidad de seguimiento”). Notwithstanding, the monitoring entity may transfer its responsibility to another financial entity, at the request of the exporter.