A report by the Argentine Chamber of Commerce and Services on the Import System of the Argentine Republic (SIRA) has recently been published. The data is alarming and shows that there are serious problems with the supply of inputs, intermediate goods and finished products. This situation affects all industries without distinction.
One only needs to look at some of the data provided by the report to realize that the problem is alarming and there do not seem to be any solutions at hand that would allow us to have a hopeful outlook for the immediate future.
According to the report, 76% of companies have received less than 25% of the authorizations they have requested to import; delays in obtaining approvals are up to 90 days; and 83% of the companies surveyed already have levels of inputs, stock and sales below the usual standards, so they feel that these delays are already affecting the normal development of their production and sales.
It is clear that this issue is closely linked to our country's balance of payments and the extreme drought that the central region is going through has certainly not helped much. The Rosario Stock Exchange has indicated that the impact of the drought will probably result in a reduction in the contribution of foreign currency of around 13%, so that the year begins with discouraging statistics.
Of course, this is nothing new, it has only deepened a scheme that has been in place for more than 20 years. In the last 20-25 years we have seen the imposition of prior interventions on imports, and a prior authorization has begun to be requested to proceed with the purchase and import of merchandise from abroad.
Initially, progress was made by industry, with the so-called import certificates (CI), then things became massive and Import Licences (LI) arrived, in turn, Advance Import Declarations (DJAI) were imposed and finally the Comprehensive Import Monitoring System (SIMI) was established, which later gave rise to the Import System of the Argentine Republic (SIRA).
The reasons for these administrative measures have been varied, but there is a common pattern that has to do with the supposed increase in the flow of income from merchandise whose behavior should be evaluated. Express reference is always made to the Regulatory Framework to ensure and facilitate World Trade and to the need for the AFIP, in its control tasks, to have tools to facilitate the articulation of control actions.
In all fairness, after so many years, it seems clear that these are instruments that have been controlling the flow of incoming goods with the aim of controlling the balance of payments.
The implementation of the SIRA, 20 years after the start of the prior analysis of information to face the challenges brought by the turn of the millennium, shows that these actions are here to stay. It is also clear that if they were seeking to improve our balance of payments, the actions have not been very efficient.
We do not see competitive improvements in the local industry, which has serious financing and supply problems, and what can we say about a contracted consumer market. And we do not see a solid national balance of payments with a surplus either. I would say quite the opposite.
Thus, judging by the results obtained, we could expect the implementation of state policies that show clear support for our exports, not only of primary products but especially of products manufactured with national added value.
The truth is that it is clear that the proper administration of foreign trade and the advance provision of information that these measures such as SIRA encourage do not represent an evil in themselves, since there is nothing to be said about the advance provision of information or the advance administration of foreign trade, since this probably allows for improved efficiency when carrying out customs control procedures, which ultimately allows for cost savings.
However, the problem arises when, through this, restrictions or even import prohibitions are generated that violate individual rights. It is clear that the delay in granting import authorizations, generated in fact by the simple silence of the administration, violates individual rights.
This, of course, undermines free trade and various constitutional guarantees, in addition to violating international agreements, which places our country at the mercy of international reprimands, in addition to the loss of credibility.
At this point, it is important to highlight that the international commitments signed by our country and the vast majority of nations prevent us from establishing quantitative import prohibitions. Thus, the establishment of a generalized import prohibition (it is clear that prior authorization without response is a de facto import prohibition) is prohibited, even though its purpose (protecting the balance of payments) is laudable.
A bit of history. In the middle of the last century, a conference was held in Bretton Woods (New Hampshire, United States) that devised an international system of agreements and institutions that could support this idea of global commercial expansion.
The system devised at the Bretton Woods meetings was based on three fundamental pillars: a) the International Monetary Fund (IMF), which was created with the mission of governing the global monetary system, b) the World Bank for Reconstruction and Development (World Bank), designed to facilitate the flow of capital in the long term, and c) the General Agreement on Tariffs and Trade (GATT), as a sort of global code of international trade guidelines.
The General Agreement on Tariffs and Trade (GATT) was refined through the implementation of meetings known as "Rounds". The "Uruguay Round" began with the Ministerial Declaration of Punta del Este, Uruguay, and then also took place in Geneva from September 1986 to December 1993. This "Uruguay Round" concluded with the Final Act signed in Marrakech in April 1994.
With the approval of the Final Act, the results of the Uruguay Round of Multilateral Trade Negotiations, the Ministerial Decisions, Declarations and Understandings and the Marrakech Agreement establishing the World Trade Organization (WTO) and its four annexes, signed in 1994, were incorporated.
The WTO has subordinated the exercise of certain prerogatives of its members to prior compliance with multilateral rules and disciplines instituted to ensure and strengthen freedom of trade, a prevailing value in the emerging philosophy of the GATT of 1947.
The General Agreement established general rules for international trade in goods, with the aim of adapting the regulations of the States Parties to certain guidelines and limitations that would ensure their development in conditions of loyalty, transparency and predictability, condemning discriminatory treatment and seeking the progressive reduction of customs tariffs, as well as the elimination of direct economic restrictions on imports.
These WTO Agreements, like all international treaties, as long as they refer to customs matters, constitute a formal source of Customs Law. These rules and principles of application to the matter, contained in various international agreements, have begun to coexist with internal customs regulations since the middle of the last century.
Consequently, we are in a complex stage of international trade due to the permanent coexistence of internal regulations and international standards of application, which envisions a kind of transfer of the sources of the same to external bodies or at least, far from the decision-making power of the states.
The principles that inspire the World Trade Organization are, among others: a) non-discrimination in trade between Members; b) transparency; c) the customs tariff as the only instrument accepted to regulate foreign trade; d) appraisal of imported goods according to the real value of the merchandise to which the customs duties are applied; e) general and progressive reduction of customs duties through multilateral negotiations; f) consolidation of negotiated customs tariffs; g) condemnation of direct economic restrictions on imports; h) freedom of transit of goods and means of transport through the territories of the members; and i) obligatory consultation between Members to resolve controversies arising from international trade.
In this context and with special interest to these lines, we can especially highlight as a central objective of the WTO the progressive liberalisation of tariffs and the determination of these tariffs as the only regulatory instrument, within a framework of genuine exchange without discrimination.
This clearly shows the impossibility of nations establishing import prohibitions on nations that are part of the Agreement, as an instrument of protection for their local industries or the balance of payments.
The prohibition established in the Agreement covers both economic restrictions on imports and exports and includes both measures that expressly or directly establish the restriction and those that indirectly or in fact impose it, such as a prior import authorization for which the request has not been answered.
In short, it is clear that the regulation of international trade in goods should only be carried out through customs tariffs and, consequently, direct restrictions of an economic nature, such as quotas, contingents, licenses or prior authorizations, cannot be used.
This principle is based on the idea that the customs tariff is the basic and natural instrument of foreign trade policy. Customs tariff or tariff is understood to be the set of import and export duties levied on the import or export of goods in relation to a given customs territory.
Therefore, only tariff restrictions can be established that are easily identifiable and measurable. Therefore, non-tariff restrictions such as quotas, contingents, and licenses are not authorized to protect economic activities. The community of WTO member nations condemns direct restrictions on imports and exports.
This principle is enshrined in Article XI, entitled General elimination of quantitative restrictions, which in its paragraph 1 provides: «"No Contracting Party shall impose or maintain - other than duties, taxes or other charges - any prohibitions or restrictions on the importation of any product into the territory of another Contracting Party or on the exportation or sale for export of any product destined for the territory of another Contracting Party, whether enforced by quotas, import or export licensing or other measures."
In short, the protection of the balance of payments is a laudable goal that must be pursued by all administrations, regardless of their political affiliation. Of course, this must be done on the basis of respect for and application of the letter and principles contained in the National Constitution and in International Treaties, especially in the WTO Agreements.
The implementation of measures that are contrary to constitutional norms and principles, that violate international agreements or even domestic laws, undermine the rule of law and legal certainty. Success cannot be achieved without respect for the law.
Furthermore, after so much time has passed since the implementation of this international trade administration, we do not see that these measures, surely implemented temporarily and to alleviate a specific balance of payments situation, have achieved any fundamental solutions. Therefore, it would be opportune to begin working on the implementation of state policies that promote exports as well as the increase of added value on exportable goods.
Attorney (UCA), Partner at Petersen & Cotter Moine Law Firm.
Full Member of the Argentine Institute of Customs Studies (President 2010/2011). Active Member of the International Academy of Customs Law (Member of the Board of Directors 2015/2023). Active Member of the Argentine Association of Tax Studies. Member of the Customs Law Commission of the Council of the Center for Studies of Financial Law and Tax Law, of the Department of Business Economic Law of the Faculty of Law of the University of Buenos Aires. Member of the Scientific Committee of the Journal of the Colombian Institute of Tax Law.
Professor of customs law in the postgraduate courses in customs law at the University of Buenos Aires, where he is also the Vice President of the Customs Law Update; of the Catholic University of Argentina, of the Austral University and of the Di Tella University.
Author of the books “Customs Law and International Trade”, published in 2018 by Guía Práctica; “Customs Law”, published in 2014 in 3 volumes by Abeledo Perrot, winner of the 2014 Argentine Association of Tax Studies Award for the book of the year; “Customs Offenses”, published in 2011 and second edition in 2013 by Abeledo Perrot; and Coordinator and co-author of the books “Customs Law Studies”, published in 2007 by Lexis Nexis and “Customs Law Studies. 30 Years of the Customs Code”, published in 2012 by Abeledo Perrot. He was one of the updaters of the Annotated Customs Code, published in 3 volumes by Abeledo Perrot in 2012.
He has also participated in collective books published abroad and has published more than fifty articles related to customs law, published in various media (La Ley, El Derecho, Jurisprudencia, Revista de Derecho Fiscal, Revista de Estudios Aduaneros, Revista Tribunas, and La Nación newspaper).
