New foreign exchange regulations on import financings

According to the wording of the communication, except for those financing transactions listed below, access to the foreign exchange market for the payment of import financing for goods is governed by the same regulations that apply to the cancellation of principal under financial loans.Although not clarified by the communication, these general rules would also apply to the disbursement and inflow of funds into the country, including the mandatory repatriation and liquidation of the proceeds of the financing in the foreign exchange market and 30% mandatory reserve deposit, as applicable.

Import financing transactions not subject to the above rule (which, consequently, are deemed original imports for purposes of Central Bank regulations) are the following:

(i) financing granted by the supplier or by a foreign credit export agency to finance the purchase of imports of Argentine goods, provided that the term of financing is explicitly agreed to before the date of shipment or in the remittance of the operation in those cases when the payment itself is made under the form of banking collection (should there be no term, the term will be deemed to be 270 days from the date of shipment);

(ii) financing granted by a local or foreign financial entity, where the foreign currency disbursements are applied, net of expenses, directly and integrally to the anticipated payment and/or payment on demand to the foreign supplier;

(iii) financing granted by a local financial entity as complement of a foreign financing contemplated in any of the preceding points, provided that it is granted through a letter of credit or guaranteed drafts, or with a credit approved in firm by the entity before the date of shipment;in these cases, the financial entity will require the importer to provide:

a) shipment documents within 50 business days following the date of shipment; and

b) reliable documentation evidencing that the date the credit was granted is prior to the date of shipment;

(iv) financing granted by a local financial entity as complement of the foreign financing with terms not exceeding 180 days from the date of shipment;

(v) lease agreement payments that include option of replacement, purchase or refund;

(vi) foreign financings granted under the conditions of the preceding points that register changes of the external creditor, provided that the financial conditions and the remaining contractual clauses of the original financing are not modified, as well;

(vii) remaining commercial import financings outstanding as of January 26, 2006, that qualify as commercial import financing granted by local financial entities according to the definitions set forth in Communication “A” 3806.