Amendment to the Rules to Access the Local Exchange Market by Argentine Residents for the Purchase of Freely Available Foreign Exchange

Communication “A” 5526 issued by the Central Bank of Argentina (the “Central Bank”) on January 27, 2014, among other changes revoked Section II of Central Bank Communication “A” 5318, dated July 5, 2012, which had suspended the effectiveness of the rules contained in Paragraph 4.2 of the Annex to Central Bank Communication “A” 5236 dated October 27, 2011.
In this way, the new regulation provides that individuals (not legal persons, unlike the previous regime) who are residents in the country may once again access the local exchange market for purchases of foreign currency under the concept of “purchase of foreign currency to be held in the country” (so-called “atesoramiento”) according to the income they have reported to the Federal Tax Authorities (“AFIP”) and other quantitative parameters to be established, for validation, in the exchange rate policy. Also, unlike the previous regime, purchases are limited to foreign currency delivered within Argentina, not including transfers abroad.
In addition, abovementioned Communication “A” 5526 established, among other requirements, that purchases of foreign currency may only be made by (i) debit from an account open in a financial institutions on behalf of the client, or (ii) local transfer to the relevant institution of funds from accounts of the client held in a financial institution or (ii) payment by check from the client's own account. Thus, the BCRA seeks to ensure that purchases of foreign currency for hoarding are made with money existing within the financial system. Previously, these requirements were not applicable to purchases of foreign currency which did not exceed an aggregate amount in any calendar month of USD 20,000 or its equivalent.
Quantitative parameters for validating the purchase of foreign currency have been established and published in the website of AFIP. Among them, it has been established that foreign currency can be acquired by employees, freelancers and “simplified tax payers” (i.e. they pay a minimal overall tax amount) with a minimum monthly income of AR$ 7,200 (equivalent to two minimum wages) on average in the last 12 months, who may spend up to 20% of their net earnings or net income with a maximum of USD 2,000 per month. The amount that will be authorized to individuals in each specific transaction will be reflected in the “Exchange Operations Consultation Program” available on the institutional website of AFIP.
The AFIP issued General Resolution No. 3583, dated January 2, 2014, which set forth a 20% withholding to be made by the financial institution involved in the foreign exchange transaction.  The withholding can be applied towards payment of Personal Property Tax and Income Tax. Such withholding shall not apply when the foreign currency is deposited, for a period not less than 365 days, in a special account at a financial institution. In the event that the deposited foreign currency is withdrawn before 365 days have elapsed, the perception will be applied at the time of such withdrawal from the respective bank account.
As per the above, the BCRA issued Communication “A” 5531, by which it states inter alia, that savings and fixed deposits related to the deposit of the acquired foreign currency may not be subject to the payment of any fees (opening, maintenance, movement of funds, balance inquiries, etc..) and should be opened in the bank selling the foreign currency.
Lastly, Communication “A” 5526 repeals the possibility of resident (individuals or legal persons) to acquire foreign currency to be used in the settlement date for the payment of primary subscription of foreign currency denominated government securities issued by the Argentine Government. It also eliminates the possibility of financial institutions to access the foreign exchange market to cover their foreign exchange requirements for the purchase and sale of securities of their own in the case of primary subscription of bonds issued by the Government or companies of the non-financial private sector, denominated and acquired in foreign currency (Communication “A” 4308, as amended by Communication “A” 5314).