New Provisions Apply to Entities with Foreign Commercial Indebtedness

Under certain conditions, registered clients no longer need prior approval from the Argentine Central Bank (the “BCRA,” after its acronym in Spanish) to pay new foreign financial indebtedness. The measure was handed down through Communique “A” 7348 dated August 26, 2021.

The BCRA granted access to the foreign exchange market to cancel, as from maturity, the principal of commercial debts for the import of goods and services. To that end, fulfilment of the following requirements must be demonstrated by submitting the pertaining certification:

•    the new financial indebtedness abroad must have an average life of no less than two years and must not mature until at least three months after its settlement in the foreign exchange market;

•    the amount of the certifications issued by the entity must not exceed the amount entered and settled in the foreign exchange market as of August 27, 2021 by virtue of the foreign financial indebtedness under consideration;

•    the entity has an affidavit from the client stating that they have not used this mechanism for an amount greater than the equivalent of five million US dollars, including the requested certification.

•    the certification may be used within five business days from the settlement of the funds of the new foreign financial indebtedness and the issuing entity must send it to the entity/entities through which the client wants to access the foreign exchange market.

Likewise, access to the foreign exchange market is permitted for: (i) payments of services to related counterparties from the maturity of the principal of debts in force as of June 30, 2021 when the client has the mentioned certification; and (ii) payments of imports of goods or cancellation of principal of debts originated in the import of goods when it is the payment of principal of commercial debts in force as of June 30, 2021 for the import of goods and the client has the aforementioned certification.

In all cases, compliance with the remaining general and specific requirements applicable to the transaction by virtue of the exchange regulations in force must be duly demonstrated.