The Foreign Exchange Access Regime for Incremental Oil and Gas Production Was Regulated

On October 28, 2022, through Communication "A" 7626, the Argentine Central Bank (BCRA) introduced a series of amendments to the regulations applicable to foreign exchange, mainly applicable to the beneficiaries of the Regime to Access Foreign Currency for the Incremental Production of Oil (RADPIP) and the Regime to Access Foreign Currency for the Incremental Production of Gas (RADPIP).

The Communication establishes that those with a certificate for the regimes may access the foreign exchange market up to the amount of the certification, according to the benefits of the RADPIP and the RADPIGN and as provided in the Decree No. 277/22 of May 27, 2022. This is possible as long as they comply with the remaining general and specific requirements applicable to payments in the following cases:
 

• capital payments of commercial debts for imported goods,
• capital payments of commercial debts for imported services,
• payment of profits and dividends,
• capital payments of financial indebtedness abroad, and
• repatriations of direct investments by non-residents in companies that are not controlling companies of local financial entities.
   

Moreover, if the client has obtained the benefit through an assignment of the original beneficiary within the framework of Decree No. 277/22, they must have a certification from the entity in charge of monitoring the benefits of the decree for the original beneficiary. The certificate must state that the monitoring entity has noticed the assignment (see our commentary on the regulation of the Decree here).

The beneficiaries of the regimes must designate a local financial institution which will be responsible for issuing the certification and forwarding it to the entities through which the client wishes to access the FX Market.

If the client is a direct beneficiary of the decree, the entity can issue the certification up to the cumulative amount of the total benefits the Secretariat of Energy recognized to the client, net of other benefits such as those obtained by the client under the decree, assigned to direct suppliers with the validation of the Secretariat of Energy.

Finally, the communication also establishes that there will be access to the FX Market to make principal payments on financial indebtedness abroad if –among other requirements– the foreign financial indebtedness arises from a refinancing executed after August 27, 2021, with the creditor for commercial indebtedness in connection with the import of goods and services, not exceeding the equivalent of USD 20 million per year. This includes debts with related counterparties meeting certain conditions.

The use of this alternative is available for companies of any type of industry and sector and is not limited to those who have been beneficiaries of the Regime of Access to Foreign Currency for the Incremental Production of Oil and Gas.