Through decree of necessity and urgency 609/2019, published in the Official Gazette this Sunday (01.09.2019), the Government established that until December 31, 2019, income from the export of goods and services must be entered into the country in foreign currency or negotiated in the exchange market under the conditions and terms established by the Central Bank.
Exporting companies must also request authorization from the BCRA to access the exchange market to purchase foreign currency. Transfers abroad will also require prior authorization.
On the other hand, holders of public debt securities whose original maturity date has passed may use them to cover social security obligations.
In this way, the Government of President Mauricio Macri establishes certain extraordinary and temporary rules related to the export of goods and services, transfers abroad and access to the exchange market. In addition, it authorizes the payment of taxes with debt securities subject to the rescheduling of maturities.
The full text of the decree
FOREIGN EXCHANGE MARKET – PUBLIC DEBT
Decree 609 / 2019
DNU-2019-609-APN-PTE
City of Buenos Aires, 01/09/2019
VISA File No. EX-2019-78944185- -APN-DGD#MHA, the Organic Charter of the BANCO CENTRAL DE LA REPÚBLICA ARGENTINA, Law No. 11.683, text ordered in 1998 and its amendments and Decree No. 596 of the
August 28, 2019, and
WHEREAS,
That, given the various factors that impacted the evolution of the Argentine economy and the uncertainty caused in the financial markets, the NATIONAL EXECUTIVE BRANCH found it necessary to adopt a series of extraordinary measures aimed at ensuring the normal functioning of the economy, maintaining the level of activity and employment and protecting consumers.
That, within this framework, by Decree No. 596 of August 28, 2019, a series of measures were established aimed at recomposing the financial program, with the aim of creating a sustainable framework for public debt.
That, in light of the recent economic and financial events that have been triggered and are of public knowledge, and the uncertainty generated within the framework of the ongoing electoral process, it is necessary to adopt urgent and temporary measures to regulate the exchange rate regime more closely and, in this way, strengthen the normal functioning of the economy, contribute to the prudent management of the exchange market, reduce the volatility of financial variables and contain the impact of fluctuations in financial flows on the real economy.
That, as it arises from section b of article 29 of its Organic Charter, the CENTRAL BANK OF THE ARGENTINE REPUBLIC must “[d]ict the regulatory norms of the exchange regime and exercise the supervision that its compliance requires.”
That, within this framework, it is necessary to establish certain extraordinary and transitory rules related to the export of goods and services, with transfers abroad and with access to the exchange market, providing that the CENTRAL BANK OF THE ARGENTINE REPUBLIC dictates the corresponding regulations, in which the situation of natural persons must be distinguished from that of legal persons.
That, given the nature of the measures adopted, it is considered appropriate to authorize the CENTRAL BANK OF THE ARGENTINE REPUBLIC to establish regulations that prevent practices and operations that seek to circumvent, through public securities or other instruments, the provisions of this measure.
Lastly, it is considered necessary to replace Article 2 of Decree No. 596/2019 to adequately consider the different modalities in which natural persons are holders, directly or indirectly, of public securities included in the scope of that decree.
That, without prejudice to the rescheduling of maturities provided for by the aforementioned Decree, and in order to sustain the financing of the Single Social Security System, it is advisable to allow the subjects obliged to pay contributions and contributions to said system, who are holders of the securities listed in the Annex of Decree No. 596/2019, to give them in payment for the cancellation of the aforementioned obligations.
For the purposes indicated in the preceding paragraph, it is deemed appropriate to allow the calculation of the securities in question at their technical value on the dates of their original maturities, simultaneously achieving the financing of the pension system and the early redemption of public debt.
That the exceptional nature of the situations raised makes it impossible to follow the ordinary procedures provided for in the NATIONAL CONSTITUTION for the sanction of laws.
That the competent technical areas have taken due intervention.
That the permanent legal service of the MINISTRY OF FINANCE has taken the intervention that is its responsibility.
That this measure is issued in exercise of the powers provided for in article 99, paragraphs 1 and 3, of the NATIONAL CONSTITUTION.
Therefore,
THE PRESIDENT OF THE ARGENTINE NATION IN GENERAL AGREEMENT OF MINISTERS
DECREE:
ARTICLE 1 .- It is established that, until December 31, 2019, the equivalent value of the export of goods and services must be entered into the country in foreign currency and/or negotiated in the exchange market under the conditions and terms established by the CENTRAL BANK OF THE ARGENTINE REPUBLIC.
ARTICLE 2.- The CENTRAL BANK OF THE ARGENTINE REPUBLIC, as provided in its Organic Charter, will establish the circumstances in which access to the exchange market for the purchase of foreign currency and coined precious metals and transfers abroad will require prior authorization, based on objective guidelines depending on the conditions in force in the exchange market and distinguishing the situation of natural persons from that of legal persons.
ARTICLE 3 .- The CENTRAL BANK OF THE ARGENTINE REPUBLIC is hereby authorized to establish regulations to prevent practices and operations that tend to evade, through public securities or other instruments, the provisions of this measure.
ARTICLE 4 .- Article 2 of Decree No. 596 of August 28, 2019 shall be replaced by the following:
“ARTICLE 2°.- The postponement provided for under Article 1° shall not apply to the securities representing short-term national public debt identified in the Annex referred to in Article 1°, in cases where the holdings:
a) are registered as of July 31, 2019 in registration systems through local entities whose registrations are verifiable by the competent control authorities of the Argentine Republic, and
b) correspond, directly or indirectly, to natural persons who hold them under their ownership on the date of payment and whose traceability can be verified by the aforementioned state control bodies.
The same treatment will apply to securities subscribed in the tender of August 13, 2019 by natural persons who retain their ownership on the respective payment date.
Also included in the treatment provided by this article are the securities representing debt covered by this decree, whose holder is a natural person who has delivered them as collateral for
market operations and recover them while maintaining their ownership on the date of payment, provided that the traceability of their ownership is assured at the discretion of the NATIONAL SECURITIES COMMISSION.”
ARTICLE 5 .- Holders of public debt securities detailed in the Annex (IF-2019- 77795012-APNSF#MHA) of Decree No. 596/2019, whose original maturity date has expired, may use them as payment for the cancellation of the following social security obligations, due and payable as of July 31, 2019: 1) Contributions and contributions to the ARGENTINE INTEGRATED PENSION SYSTEM (SIPA), established by Law No. 24.241, its amendments and supplements; 2) Contributions and contributions to the NATIONAL INSTITUTE OF SOCIAL SERVICES FOR RETIREES AND PENSIONERS (INSSJP), established by Law No. 19.032 and its amendments; 3) Contributions to the National Family Allowance System, established by Law No. 24.714 and its amendments; 4) Contributions to the NATIONAL EMPLOYMENT FUND, established by Law No. 24.013.
ARTICLE 6°.- Public debt securities used to settle the obligations indicated in the preceding article shall be computed at their technical value calculated on the date of their original maturity.
ARTICLE 7.– The obligations indicated in article 5 of this document, plus their compensatory and punitive interest and fines, will be calculated up to the cancellation date through the payment in kind of the securities indicated in the Annex (IF-2019-77795012-APN-SF#MHA) of Decree No. 596/2019.
ARTICLE 8.– The Chief of the Cabinet of Ministers is authorized, after intervention by the MINISTRY OF FINANCE, to make the necessary budgetary extensions, adjustments and compensations between the different Entities and Organizations of the non-financial National Public Sector whose resources are affected by the regime established in article
5°. ARTICLE 9º.- The SECRETARIAT OF FINANCE of the MINISTRY OF TREASURY and the FEDERAL PUBLIC REVENUE ADMINISTRATION, within the framework of their respective powers, shall dictate the necessary regulations to implement the regime established in article 5.
ARTICLE 10.- This measure will come into effect from the date of its publication in the Official Gazette.
ARTICLE 11.- Notify the PERMANENT BICAMERAL COMMISSION of the HONORABLE CONGRESS OF THE NATION.
ARTICLE 12.- Let it be communicated, published, given to the NATIONAL DIRECTORATE OF THE OFFICIAL REGISTRY and archived. MACRI – Marcos Peña – Rogelio Frigerio – Guillermo Javier Dietrich – Dante Sica – Jorge Marcelo Faurie – Oscar Raúl Aguad – Alejandro Finocchiaro – Carolina Stanley – Luis Miguel Etchevehere – German Carlos Garavano – Patricia Bullrich – Jorge Roberto Hernán Lacunza.
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