Mandatory Deposit obligation; suspension and other specific exemptions

1.    Suspension of the Mandatory Deposit obligation

As part of the implementation of the strategy of the Argentine government to promote the reporting of undeclared funds for tax purposes, through Resolution N° 82/2009 (issued March 6, 2009), the Argentine Ministry of Economy (“Ministry of Economy”) suspended until September 6, 2009 the application of the 30% mandatory deposit provided in Decree No 616/2005 (“Mandatory Deposit”), with respect to those funds exteriorized under the terms of Law N0 26,476 that are repatriated for one of the following purposes:

a)    Assets located in Argentina and holdings of Argentine or foreign currency in Argentina; 

b)    Holdings of foreign currency outside Argentina and of Argentine and/or foreign currency in Argentina used for the purchase of securities issued by the Federal government;

c)    Holdings of foreign currency outside Argentina and of Argentine and/or foreign currency in Argentina used for the purchase of new homes, already finished or with a final construction certificate;

d)    Holdings of foreign currency outside Argentina and of Argentine and/or foreign currency in Argentina, used for the construction of new properties, to finish properties under construction, and investments in infrastructure, real estate, agriculture, industry, tourism or services in Argentina.

2.    Other specific exemptions to the Mandatory Deposit obligation

The Ministry of Economy has begun to grant exemptions to the Mandatory Deposit obligation in response to certain specific requests from Argentine companies.

Making reference to the current global financial and the local foreign exchange market situations, and in order to further monetary and foreign exchange policies, recently the Ministry of Economy has begun to issue resolutions approving the specific requests of certain companies to exempt from the Mandatory Deposit financial loans that do not meet all the requirements imposed under general exemptions already available under foreign exchange regulations. Resolutions 117/2009 and 118/2009 are examples of that policy.