On May 29, 2020, through communication “A” 7030 (the “Communication”), the Central Bank of the Argentine Republic (“BCRA”) has intensified the restriction on the exchange market.
1. The Communication established that in order to grant access to the exchange market for the following operations:
(i) Import payments and other purchases of goods abroad
(ii) Payments for services provided by non-residents
(iii) Interest payments on debts for imports of goods and services
(iv) Payments of profits and dividends
(v) Capital payments and interest on financial indebtedness abroad.
(vi) Payments of debt securities with public registration in the country denominated in foreign currency and obligations in foreign currency between residents.
(vii) Payments of indebtedness in foreign currency of residents by trusts established in the country to guarantee the attention of the services.
(viii) Purchase of foreign currency by resident individuals to be applied simultaneously to the purchase of real estate in the country with mortgage loans
(ix) Purchase of foreign currency by other residents -excluding entities- for the formation of external assets and for operations with derivatives.
(x) Other purchases of foreign currency by residents with specific application.
(xi) Access to the exchange market for the payment of premiums, constitution of guarantees and cancellations that correspond to operations of interest rate coverage contracts for the obligations of residents abroad declared and validated, if applicable, in the “Survey of external assets and liabilities”, as long as these do not cover risks higher than the external liabilities that the debtor registers at the interest rate which risk is being covered by the celebration of the same are not covered.
The entity must obtain the prior approval from the BCRA unless it has a sworn statement from the client in which it is recorded that at the time of access to the exchange market:
(i) all of its foreign currency holdings in the country are deposited in accounts with financial entities and that it does not have available liquid external assets (holdings of notes and coins in foreign currency, availabilities in gold coins or in good delivery bars, demand deposits in financial institutions abroad and other investments that allow immediate availability of foreign currency)
In these cases, the entity may also accept this affidavit if it has evidence that during the day the client enters the exchange market such Assets were fully used to make payments that would have had access to the local exchange market.
(ii) undertakes to settle on the exchange market, within five business days of its availability, those funds received abroad originated from the collection of loans granted to third parties, the collection of a term deposit or of the sale of any type of asset, when the asset has been acquired, the deposit made or the loan granted after 05.28.2020.
This requirement does not apply in the following cases:
- the entity’s own operations as a customer,
- cancellations of financing in foreign currency granted by local financial institutions for consumption in foreign currency made by credit card or purchase
- payments abroad of non-financial card issuing companies for the use of credit, purchase, debit or prepaid cards issued in the country.
- individuals that correspond to the formation of external assets (purchase of $ 200 usd monthly)
2. Restrictions until 06.30.2020
The Communication established that in order to access the exchange market to make payments for the imports of goods or the cancellation of debts originated in the import of goods, prior approval from the BCRA is required except that:
- The entity records by means of an affidavit that the total amount of payments associated with its imports of goods carried out through the exchange market during the year 2020, including the payment which course is being requested, does not exceed the amount by which the importer would have access to the exchange market when computing the imports of goods that appear in its name in SEPAIMPO and that were officialized between 01.01.2020 and the day before access to the exchange market.
- the documentation that allows the entity to verify compliance with the remaining requirements established for the operation by the exchange regulations.
It will not apply to:
- the public sector,
- the companies that even being constituted as subjects of private law are under the control of the National State,
- trusts established with contributions from the national public sector,
- legal entities that are responsible for the provision of critical drugs to patients when making advance payments for this type of goods to be entered by Private Request by the beneficiary of said medical coverage,
- the payment of imports with pending customs registration for the purchase of kits for the detection of the coronavirus COVID-19 or other goods which tariff positions are included in the list included in Decree No. 333/2020 and its complementary rules , which includes various medical supplies.
- the payment of imports with customs registration pending to the extent that the amount pending of regularization by the customer for similar payments made as of 09.01. 19 does not exceed the equivalent of US $ 250,000, including the amount for which the access to the exchange market is required.
The BCRA will carry out a continuous verification of compliance with the provisions of this clause based on the use of the information available regarding payments for imports of goods carried out by the exchange market and the detail of the import authorizations included in the SEPAIMPO.
Also, the Communication established that the prior consent of the BCRA will be required to access the exchange market for the cancellation of capital services for financial indebtedness abroad when the creditor is a counterparty linked to the debtor.
3. Clarifications of Communication A 7001
Finally, through this new Communication A 7030, clarifications were made regarding Communication A 7001, thereby replacing the provisions included in its point 3, which initially established:
“That in the operations of clients that correspond to expenses for the exchange market –including those that are made through exchanges or arbitrations-, in addition to the requirements that are applicable in each case, the entities must require the submission of a sworn statement from the client in which it is stated that: a) on the day in which he requests access to the market and in the previous 30 calendar days he has not made sales of securities with settlement in foreign currency or transfers of them to depository entities abroad . b) undertakes not to make sales of securities with settlement in foreign currency or transfers thereof to depository entities abroad from the moment that it requires access and for the subsequent 30 consecutive days. This requirement will not apply to expenditure operations that correspond to the entity’s own operations as a client ” Communication A 7001 BCRA
The Communication establishes that in the operations of clients that correspond to expenses from the exchange market, in addition to the requirements that are applicable in each case, the entity must have the prior authorization from the BCRA unless it has a sworn statement from the client which states:
- On the day in which it requests access to the market and in the previous 90 calendar days, it has not arranged sales of securities with settlement in foreign currency in the country or transfers thereof to depository entities abroad. Until 06.30.2020, the declaration included in this point will be considered to only include the period elapsed since 01.04.2020 inclusive.
- undertakes not to arrange sales of securities with settlement in foreign currency in the country or transfers thereof to depository entities abroad from the moment it requires access and for the subsequent 90 calendar days.
This requirement will not be applicable to expenses that correspond to:
- the entity’s own operations as a customer,
- cancellations of financing in foreign currency granted by local financial entities, including payments for consumption in foreign currency made by credit card or purchase and
- operations included in point 3.12.4. insofar as they are automatically processed by the entity in its capacity as agent of the non-resident beneficiary