Formation of Residents’ External Assets and Payment of Services

The Central Bank of Argentina (“BCRA”), through Communication “A” 5318 and Communication “A” 5330 (the “Communications”) introduced new amendments to the legal framework which regulates the access of Argentine residents to the Argentine Foreign Exchange Market (“AFEM”) for the acquisition of foreign assets and payment of services.

The Communications amended point 3 of the Annex of Communication “A” 5264 providing the following:

(i) Residents of Argentina and private legal entities established in Argentina will have access to the AFEM, prior permission of the Tax Authorities, to purchase foreign currency bills and traveller checks. Access to AFEM will be available under the concept of “travel and tourism” and for reasonable amounts in terms of location and duration of stay.

Interested subjects must file an affidavit about the trip with detail of the amount of days they will stay abroad. Also, in the case the trip is suspended, they must commit to return the funds within 5 working days.

Validation from the AFIP won’t be necessary if the foreign currency transaction involves:

• Transfers abroad that apply to payments of expenses performed using credit cards and ATM withdrawals made abroad with local debit accounts.

• Sales to travel and tourism operators registered as such before the Tax Authorities.

• Sales to non-Argentine residents which do not exceed the equivalent to one thousand dollars (US$ 1.000) per calendar year and customer.

(ii) Prior authorization of the BCRA will be required to access to AFEM in case of transactions such as: sales of foreign currency to non-residents under the concept of “tourism and travel” when they exceed one hundred thousand dollars (US$ 100.000), or payment of rent or lease of property located in Argentina which are owned by non-residents and generate payments or debts exceeding one hundred thousand dollars (US$ 100.000).

(iii) Residents will have access to the AFEM to transfer funds abroad in concept of family assistance and pensions, scholarships, payment of judgments or judicially approved settlements, and payments of fines applied to natural persons for events which took place abroad.

(iv) Finally, the Communications provides that individuals can access the AFEM until October 31st 2012 inclusive for the purchase of foreign currency for the amounts of mortgage credits. Such credits must not be of short-term and must be destined to the purchase of housing.

Communication “A” 5318 came into force on July 6, 2012, and Communication “A” 5330 on July 27, 2012.

We invite you to join our monthly newsletter