Argentina is implementing a new Foreign Exchange (FX) Control Regime. Through this regime, the Argentine Central Bank (BCRA) regulates operations that are carried out through the FX market, providing different requirements for each transaction.
The Argentine control organizations have imposed various regulations and restrictions, especially regarding operations that may result in an outflow of foreign currency from the country.
Imports of goods and services are heavily affected by the new regulations. Importers in Argentina currently face difficulties in regard to the implementation of a specific quota system due to complications when dealing with financial entities regarding transferring payments abroad. Moreover, payments for services are more complicated due to formal legal requirements and those set forth by financial institutions.
Issuance of the latest FX regulations has generated additional issues. Communication BCRA “A” 7327, published on July 12, 2021, stipulates that companies that make certain local payments to their parent entities and desire to access the FX market first must sign a series of affidavits stating the day for which access is requested, and a confirmation that in the previous 90 calendar days the company has not arranged operations involving sales of securities with settlement in foreign currency, whether locally or abroad. These affidavits must include certain details regarding the persons who exercise a relationship of direct control over the company.
Other types of transactions, such as payments for services to related companies, generally require prior approval of the BCRA in order to access the FX market to make payment. However, insofar as there are no known instances of companies receiving such BCRA approval, companies needing to make such payment must use alternative methods not involving access to the FX market (e.g., compensation, transactions with bonds, and local payment).
Observation: In short, honoring a foreign debt is neither an obligation nor a right, but a privilege only certain companies can access. Therefore, it is essential to perform an analysis of the company’s situation before making a payment abroad, especially when it is related to imports of goods and services, in order to carry out operations in full compliance with current regulations.
Michaela Merz 