The new national administration that took office in December 2023 brought many expectations regarding the closure of the Central Bank of the Argentine Republic and the prompt release of the exchange restrictions imposed since September 2019, commonly known as the foreign exchange restrictions.
But far from those measures to close the governing body of Reconquista 266 and end the exchange restrictions, after more than 4 months the conditions have not changed much: the BCRA remains unscathed with its president Santiago Bausili at the helm, and with the Minister of Economy Luis Caputo they are central pillars of the economic policy of this new government.
As for exchange restrictions, they remain almost unchanged compared to the strict exchange controls imposed during the 4 years of BCRA President Miguel Pesce.
Importers situation
Beyond having eliminated the requirement to present the SIRA and SIRASE For importers of goods and services and registration in the Single Foreign Trade Current Account (CCUCE) on the AFIP website, the conditions for access to the Free Exchange Market remain practically unchanged.
For payment for goods imported in general with import dispatches officialized since 13/12/23, access to foreign currency is granted in four monthly installments at 30, 60, 90 and 120 days at a rate of 25% in each payment.
There are some exceptions for the payment of compassionate use remedies and certain fuels - bituminous coal - and recently, uranium and zirconium. These goods can be paid once the release to the market has been made official.
Fertilizers, medicines, and food supplies can also be paid for 30 days after delivery to the market.
Basic basket goods may also be paid for 30 days after delivery to the market, with officialization starting on 15/03/2024. Previous deliveries must be paid in 4 monthly installments.
Companies with a MSME certificate with deliveries to the market starting on 15/04/2024 will also be able to pay for their imported goods within 30 days, but deliveries to the market prior to that date will have the scheme of four monthly installments.
Also, as of 15/04/2024, MSMEs can make advance payments for goods up to 20% of the FOB invoice for capital goods.
On the other hand, there is also the possibility that importers of goods and services that qualify as MSMEs can access the exchange market as long as they have registered debts prior to 13/12/2023 not exceeding USD 500.000 in the AFIP Registry until January 24, 2024.
Shipments of automobiles and luxury goods to the market must be paid for through the exchange market no earlier than 180 days after shipment to the market, starting on December 13, 2023.
As to Services pay, those actually provided or accrued may be paid from December 13, 2023, once 30 days have passed since the provision or accrual of said services.
Cultural and recreational services may be paid 90 days after the service is provided or accrued; these include services by non-resident artists who give concerts in the country.
Regarding services to affiliated companies abroad, they may be paid 180 days after the service has been provided or accrued after 13/12/2023.
Certain services such as medical expenses, travel assistance and audiovisual services, among others, may be paid for without a minimum period having elapsed since the provision of the service and whether they have been provided before or after 13/12/2023.
On the other hand, we remind you that deliveries to the market prior to 13/12/2023 and services in general (except those expressly exempted) that were provided or accrued before said date do not have access to the free exchange market and the only payment option has been the subscription of BOPREAL Series 1, 2 and 3.
Primary subscribers of BOPREAL in its various series that have subscribed more than 50% of its debt for goods and services may circulate through the exchange market up to 5% of the subscribed value of said bonds issued by the BCRA.
In addition, primary BOPREAL subscribers who transfer the securities abroad or sell them against settlement in dollars are not left out of the exchange market and as of April 01, 2024 - if they sold the BOPREAL to pay their suppliers abroad - they have the possibility of making cash settlement to transfer the dollars abroad for the difference between the face value of the BOPREAL and the market value at which they were sold without being left out of the exchange market.
This brief review aims to indicate the number of exchange regulations in place for paying for goods and services, which has motivated many importers to choose to settle their foreign debts through the securities market, having respected the corresponding parking days of 90 or 180 days as appropriate, since the last access to the exchange market.
The rest of the conditions of the exchange rate restriction remain unchanged, such as the transfers for profits and dividends for which the BCRA is analyzing the issuance of a new series of BOPREALs starting in June of this payment, to cancel this type of debt.
Foreign exchange restrictions for access to the free exchange market that are still in force today in addition to those stated above:
- Profits and dividends.
- Repatriation of direct investments.
- Loans between related companies entered into before 2/10/2020.
- Transfers to the foreign accounts of legal entities for dollar bills held in current accounts in local banks.
- Inability to access the foreign exchange market when you have more than USD 100.000 of liquid external assets and also when all foreign currency holdings are deposited in local current accounts.
- Obligation to settle in the foreign exchange market external assets acquired abroad or loans abroad or investments abroad that have occurred after 28/05/2020.
- Another restriction to access the exchange market is that any of the following situations have been verified:
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- Arranging sales in the country of securities with settlement in foreign currency;
- carrying out exchanges of securities issued by residents for external assets;
- carrying out transfers of securities to foreign depository entities;
- Acquisition in the country of securities issued by non-residents with settlement in pesos;
- Acquisition of Argentine depositary certificates representing foreign shares;
- acquisition of securities representing private debt issued in a foreign jurisdiction;
- Delivery of funds in local currency or other local assets (except funds in foreign currency deposited in local financial institutions) to any natural or legal person, resident or non-resident, related or not, to receive as prior or subsequent consideration, directly or indirectly, by itself or through a related, controlled or controlling entity, external assets, cryptoassets or securities deposited abroad
Situation of natural persons
Moreover, the Individuals can access the exchange market to buy dollars for savings up to 200 per month as long as, in addition to the above, they are not beneficiaries of a financial service, credit card refinancing in 2020, have not received a salary payment through ATP during the pandemic emergency, are not a beneficiary of a Zero Rate Loan or subsidized rate, do not have subsidies on public services, do not have an ANSES Credit, among others.
That is to say, there are still multiple obstacles to accessing the exchange market to buy a small amount of dollar bills for individuals, which has motivated them to buy them through the MEP dollar, which is much less complex and also cheaper, since neither the Country Tax nor the advance on profits or personal property are taxed.
It is also worth remembering that this new administration has inherited a dramatic exchange rate legacy with negative reserves of USD 11.500 billion and a debt for imports of goods and services of more than USD 50.000 billion.
Positive terrain
The BCRA, on the other hand, has accumulated reserves from foreign currency earnings from exports of goods and services and in 4 months they are almost in positive territory, which is very commendable in such a short time.
But it will be necessary to gradually eliminate all this chaos of controls, requirements and prohibitions that was inherited, maintaining the exchange rate balance and making access to the exchange market more transparent for individuals and legal entities.
He is a certified public accountant from the University of Buenos Aires (UBA). He has a postgraduate degree in Finance from the Universidad Argentina de Empresas (UADE). Currently, he is Head of the Comex Technical Area at Banco Santander Argentina, since 1987. He also serves as Secretary of the Comex Commission at the Association of Argentine Banks (ABA), since 2011. He has been married for 34 years to Adriana Barsanti, and has three children aged 33, 31 and 26, all professionals.
