New amendments to foreign exchange regulations applicable to exports advance payments and pre-export financings

Under Communication “A” 4443 of November 22, 2005 as amended, the Argentine Central Bank regulates the requirements for the settlement by Argentine exporters in the local foreign exchange market (the “FX Market”) of foreign currency proceeds of exports advance payments and pre-export financings (the “Export Financings”). Among said requirements, section 1.a.i of Communication “A” 4443 demands the exporter file with the local bank which shall enter into the relevant foreign exchange transaction, documentation consisting of contracts or purchase orders or supply requests by foreign importers, in compliance with the usages and custom of the activity, whose compliance shall permit the exporter the timely service of the Export Financings under shipments to be made within the mandatory maximum terms set forth by Communication “A” 4443.

Alternatively to this  requirement for documentation and also to evidence the export activity, Section 1.a.ii of Communication “A” 4443 permits the exporter to settle the Export Financing proceeds in the FX Market, provided the aggregate amount of (a) the outstanding amount of existing Export Financings; and (b) the new Export Financing proceeds to be settled in the FX Market, does not exceed, as a general principle, 25% of the aggregate amount of exports shipped during the previous 12 calendar months (the “Export Financings to Exports Ratio”). Said maximum percentage is increased to 50% in the event all goods exported during the previous 12 calendar months fall within specific categories of goods provided by Communication “A” 4443.

Communication “A” 4824 issued on July 4, 2008 provides that as from July 7, 2008 the Export Financings to Exports Ratio shall be calculated by taking the higher of (i) the annual average of exports shipped during the last 36 calendar months, or (ii) the aggregate amount of exports shipped during the previous 12 calendar months.

Also on July 4, 2008 the Central Bank issued Communication “A” 4823, which amended with effects as from July 7, 2008 Section 2 of Communication “A” 4443 (as amended by Communication “A” 4749 of December 17, 2007).

Section 2 of Communication “A” 4443 provides that repayment by exporters of Export Financings must be made out of export proceeds from shipments made within certain maximum terms which vary from 90, 180, 365 or 540 days, depending on the goods exported, and are counted as from the date of settlement of the Export Financing proceeds in the FX Market.

Communication “A” 4749 provided in connection with those goods which according to the regulation must be shipped within 540 days (certain fixed assets, technological goods or exported under the turnkey export regime), that an exporter may request from the Central Bank an extension of said shipment term should such extension be required based on the timing of the production process. By virtue of Communication “A” 4823, now this request may be made by the exporter to the Central Bank in connection with all types of goods.

Additionally, Communication “A” 4443 still provides that the local bank appointed by the exporter to supervise the Export Financing, may grant upon a petition of the exporter an additional term of up to 60 days to make the shipment, based on reasons beyond the control of the exporter such as climate disasters, internal transport problems, or strikes affecting production. An additional extension of said 60 days term will require of the approval of the Central Bank.

Likewise, Communication “A” 4823 also provided that:

(a)   exporters shall have access to the FX Market to return to the foreign creditor advance payments of exports in an aggregate monthly amount not exceeding US$10,000, in addition to the maximum amount authorized to such effect by Section 1.b of Communication “A” 4561. This regulation permits the access to the FX Market to pay the outstanding balance of Export Financings not paid with export proceeds, up to the higher per each Export Financing of 5% of the amount thereof, or US$5,000. The provisions of Section 5.1 of Communication “A” 4177 (which provides that regulations applicable to financial loans shall apply to payments of Export Financing not made out of export proceeds but through the FX Market, including a mandatory 30% deposit of the repaid amount), shall not apply to payments by the exporter through the FX Market up to said maximum permitted amounts; and

(b)   exporters may register the payment of exports advanced payments with debit notes up to a maximum aggregate amount of US$10,000 per calendar month.