New Regime for Advances and Pre-Financing of Exports

On October 30, 2014 the Central Bank of Argentina (the “Central Bank”) issued Communication “A” 5655 (the “Communication”), effective as from October 31, 2014, establishing a new regime for the transfer of the external proceeds from advances and pre-export financings carried out by the agricultural export sector until  December 31, 2014.
 
It should be noted that, while the new regime is aimed at the agricultural export sector, exporters from other sectors willing to adhere to this regime in connection with any additional proceeds may do so by submitting a prior request to the Central Bank.
 
The Communication establishes that the exporters must submit an estimated monthly income plan detailing, per calendar month, the regular proceeds and the expected additional proceeds.
 
Regarding advances and pre-export financings from abroad disbursed after the submission of the aforementioned plan, which are identified as additional proceeds, exporters may:
 
(i)  maintain such external proceeds which were transferred to correspondent accounts of a local financial institution and are pending liquidation through the local foreign exchange market (the “FX Market”) for a period of up to180 days starting as from the day such funds were credited in such account. It should be noted that funds which are maintained as a transfer pending liquidation, will be exempted from the term established in Central Bank Communication “A” 5300for its settlement through the FX Market, i.e. the 15-business-day term starting as from the disbursement of the funds for the transfer and liquidation of the foreign currency proceeds through the FX Market; and / or
 
(ii) allocate the Argentine Pesos resulting from the liquidation of the funds to the subscription of Internal Central Bank Bills (Letras Internas del Banco Central or “LEBACs” for its Spanish acronym) in Argentine Pesos calculated in accordance with the reference exchange rate of the day of their subscription. The LEBACs may be subscribed by the exporters of the grain and oil sector that are registered simultaneously in the Register of Traders of the Agro Food Chain (“Registro Único de Operadores de la Cadena Agroalimentaria”) and in the Register of Exporters and Importers (“Registro de Exportadores e Importadores”).
 
In addition, the balance remaining as a transfer pending liquidation, the transfer of such funds through the FX Market, may be used as follows: a) up to 33% of the balance until December 31, 2014, for the application to the transfer of the proceeds from exports with shipment date after January 15, 2015; and b) up to an additional 33%, to exports with shipment date after January 31, 2015.
 
For the purposes of the Communication, the funds shall be transferred through the FX Market via the application of two new items (códigos de concepto): “Advance Collection of Imports” (Item 120) and “Pre-financing of Exports from Abroad” (Item 121).  
 
Lastly, any funds which remain as a transfer pending liquidation must be transferred by the financial institutions to their foreign currency accounts with the Central Bank. Such transfer must be made on the day in which the funds were credited in the correspondent account or, if there were any operational inconveniences, on the next business day. These funds must be transferred through the FX Market via the application of the aforementioned items and comply with the minimum term for its application to the corresponding bill of lading.