New Restrictions to Purchase Foreign Currency

On December 12, 2001, the Argentine Central Bank (the “Central Bank”) requested, via an e-mail sent to the banking associations and financial institutions to inform them as from December 15, 2011 of any foreign exchange transaction to be entered into through the Foreign Exchange Market (Mercado Único y Libre de Cambios or “MULC”) in the next 10 business days (instead of in the next 5 business days as required until December 14, 2011 inclusive).

It is noteworthy that such duty of information applies to all foreign exchange transactions, without distinction, exceeding US$500,000 per item (concepto), client and day. Hence, if a client must pay services for an amount of US$300,000 and imports for an amount of US$300,000, such foreign exchange transactions should not be informed as such amounts do not exceed the minimum of US$500,000 for each item. If a client must pay sight imports for an amount of US$400,000 and make a deferred payment of imports for an amount of US$150,000, such foreign exchange transactions should be informed as these transactions fall within the same “imports” item and therefore, together they exceed the minimum of US$500,000.

Through this requirement, the Central Bank has anticipated that “in the future, the listings of foreign currency sales to clients may only be exceptionally amended, in specific cases and with due justification.” Hence, those transactions not included in the listings can not be performed.

Local financial institutions have not yet reached a uniform position as to whether the impossibility of modifying such listings and carrying out foreign exchange transactions not included in such listings is already in force or will only be in force “in the future,” when an instruction or rule in this regard is passed by the Central Bank. However, several financial institutions are requesting prior Central Bank approval to carry out transactions not included in such listings.

For all these reasons, it is expected that this information requirement of the Central Bank from financial institutions may generate new delays in foreign exchange transactions, in addition to those already existing related to the fulfillment of the computerized system “Consult of Exchange Transactions”, established by the Argentine Tax Authority (Administración Federal de Ingresos Públicos or “AFIP”) through General Resolution No. 3210 (please refer to Marval News No. 111, November 30, 2011).