The Argentine Tax Authority Declares that Customs Lacks Jurisdiction over Penalties Applied to Differences in Repatriation of Proceeds of Exports

On August 1, 2016, the Argentine Tax and Customs authority (AFIP) issued Instruction No. 5/2016, by which every customs delegation should declare its lack of jurisdiction to initiate proceedings and apply fines for  inaccurate statements (declaraciones inexactas) in cases where the exporter had failed to meet the mandatory repatriation of proceeds in an export.

In order to enforce this new criterion, the AFIP has had to repeal an Instruction issued by Customs in 2012 (Instruction No. 2/2012), which demonstrated a considerable deviation from the law.

The new Instruction aligns Customs’ criterion with repeated case law regarding several appellate decisions from the Federal Court of Appeals that are final and have the force of res judicata, due to the fact that the Argentine Supreme Court has dismissed the extraordinary petitions filed by Customs.

The Federal Court of Appeals ruled that the entity with jurisdiction over the repatriation matter is the Central Bank. Therefore, it states that Customs should restrain from starting these proceedings or imposing fines.

These decisions note that the truthfulness and accuracy of the Customs statements declared by the importers/exporters had not been questioned by Customs and that the situations regarding foreign currency repatriation have no relation to those statements, so there could not be any fine imposed on them based on an inaccurate statements’ allegation.

According to Instruction No. 5/2016, this kind of case should be redirected to the Central Bank for them to analyze the different courses of action possible in relation to the foreign exchange regulations and currency repatriation and expense.

The issuance of Instruction No. 5/2016 puts an end to a scenario in which Argentine importers and exporters were frequently indicted without legal grounds.