The Communications have modified the applicable timeframes relating to the requirement to transfer to Argentina and convert into AR$ the proceeds from exports of goods formalized after September 2, 2019 and have indicated that such timeframes shall be computed from the date of the Customs formalized shipping permit.
The new applicable timeframes are 15, 30 and 180 calendar days, depending on the type of exported goods.
The timeframe applicable to proceeds from exports that constitute related-party transactions is 30 calendar days (unless the underlying goods are subject to a 15 calendar-day period, in which case the latter shall apply).
Notwithstanding the maximum periods mentioned above, the proceeds from exports of goods shall be transferred to Argentina and converted into AR$ within 5 business days from the purchase price collection date.
2.
Investments and Savings in Foreign Currency by Residents
a)
Transactions with Securities
:
Access to the foreign exchange market for the purchase of foreign currency by resident individuals within the monthly limit of US$10,000 for investment and savings purposes is subject to the filing of an affidavit stating that such foreign currency shall not be used to acquire securities in the secondary market within 5 business days from settlement of the foreign exchange transaction.
As a result of this condition, the Argentine Securities and Exchange Commission issued Resolution 808/2019, pursuant to which Settlement and Clearance Agents ("Agentes de Liquidación y Compensación", or "ALYC" for its acronym in Spanish) shall obtain an affidavit relating to compliance with the 5 business day-period mentioned above in order to process USD-denominated securities transactions.
Such USD-denominated securities transactions may only be settled within a 48 hour-timeframe. In addition, subsequent transfers of such securities may only be settled in AR$ upon expiration of a 5 business day-period following the initial purchase settlement date.
b)
Derivatives Transactions
:
The Communications state that Central Bank's prior authorization requirement applicable to access to the foreign exchange market regarding derivatives transactions (which, in the case of individuals, does not apply when the amount involved does not exceed US$10,000 per calendar month) comprises all operations relating to derivatives (including premium payments, granting of collateral and other futures, forwards, options and derivatives payments).
3.
Transfers by Individuals
Transfers of foreign currency from local accounts in foreign currency held by individuals to their respective offshore accounts are not subject to any restrictions. This provision applies to both resident and non-resident individuals, which entails that the aforementioned transfers are not subject to the maximum limits applicable to the purchase of foreign currency (US$10,000 in the case of residents, and US$1,000 in the case of non-residents) set forth in Central Bank's Communication "A" 6770.
4.
Imports of Goods and Services
The Communications state that restrictions regarding payment of amounts due or payable at sight under related-party import transactions in excess of the US$2,000,000 monthly limit, apply to debts pending as of August 31, 2019, which are those that have matured prior to such date or that bear no maturity.
The following payments under related-party imports of services are exempted from prior Central Bank's approval: (i) payments carried out by local agents in charge of collecting amounts due for services rendered to local residents by non-residents, (ii) payment of expenses due by local entities to foreign entities pursuant to their regular operations, and (iii) transfers outside Argentine regarding the payment of reinsurance premiums.
5.
Non-Produced Non-Financial Assets
Foreign currency-denominated proceeds from the "sale of non-produced non-financial assets" by local residents must be transferred to Argentina and settled in the foreign Exchange market within 5 business days from the collection date.
Although the Communications do not provide the meaning applicable to "non-produced non-financial assets", the latest regulations in effect during the former exchange control regime (Communication "A" 6037, which has been abrogated) provided that "the purchase or sale of non-produced non-financial assets comprise those transactions providing for the transfer of the economic property of, among others, fishing rights, minerals' rights and electromagnetic and air space, sports passes, patents, copyrights, concessions, leases, logotypes, registered trademarks and internet domains."
6.
Obligations Among Residents
Restrictions regarding access to the local exchange market for the payment of indebtedness and other foreign-currency denominated obligations among residents do not apply to financings in foreign currency granted by local financial entities (including foreign currency credit card purchases). This provision applies to indebtedness and other obligations incurred both prior to, and after, September 1, 2019.
7.
Related-Party Transactions
The Communications provide that the parameters for identifying "related party" transactions in connection with applicable timeframes for repatriation of exports proceeds and restrictions to the payment of imports of goods and services, are those set forth in section 1.2.2. of the regulations of "Major exposures to credit risk".
The aforementioned parameters include (i) those based on controlling conditions (applicable to control exercised by both individuals and legal entities, which are determined on the basis of corporate, contractual and factual circumstances evidencing dominant position or control over the local entity), and (ii) those based on personal conditions (applicable only to control exercised by individuals, which are determined on the basis of corporate positions or offices held in the local entity).
The existence of a "related party" transaction based on controlling conditions includes not only individuals or legal entities controlling, or controlled by, the local entity, but also those entities under common control with the local entity.
The minimum percentage of voting rights,
of which
t
he
direct or indirect
ownership
determines the existence of controlling conditions, is 25% of the total voting rights in the local entity.
8.
Settlement of Financings and Derivatives Transactions
Foreign currency-denominated financings granted by local financial entities to private non-financial sector clients must be settled through the local exchange market upon disbursement thereof.
Futures transactions in regulated markets, as well as forwards, options and any other type of local derivatives transactions entered into by licensed foreign exchange entities must be settled in local currency.
9.
Trusts Formed by Residents
Trusts formed by local residents in their capacity as issuers of debt securities to secure principal and interest payments thereunder shall have access to the foreign exchange market to make such payments, so long as the relevant issuer would have been deemed to comply with the relevant conditions required for the making of such payments directly by itself.
