The Central Bank of the Argentine Republic (8B.CRA) has consistently made the necessary decisions when it comes to taking care of its foreign currency reserves.
In this regard, on October 01, 2020, the Central Bank announced the update of its monetary policy guidelines. This document sets out the economic situation that Argentina is going through, referencing a context where there is a severe crisis due to indebtedness, a macroeconomy with strong imbalances and a pressing social situation. This has motivated the country to design its response strategy to COVID-19 through the instruments available in an economy in emergency and without access to the international credit market.
In this way, the BCRA reaffirms the need to increase reserves in this time of scarcity, highlighting that “regulations on the foreign exchange market seek to avoid temporary imbalances that could affect the position of international reserves. They are a necessary instrument for the coordination of individual decisions while progress is made in improving the fiscal, external and monetary situation. Seeking in the medium term macroprudential regulations compatible with the dynamization of capital flows oriented to the real economy.” (According to the Monetary Policy Guidelines Update – Thursday 01/10/2020 – Published at http://www.bcra.gov.ar/Noticias/actualizacion-lineamientos-politica-monetaria.asp).
Communications from the BCRA
It is well known that prior to this, the announcement had been made Communication A 7030, which provided:
Establish that until 30.06.2020/05/06, in order to access the exchange market to make payments for imports of goods (concept codes B07, B10, B12, BXNUMX and BXNUMX) or to cancel the principal of debts arising from the import of goods, prior approval of the BCRA must be obtained, unless the entity has:
2.1. a sworn statement from the client certifying that the total amount of payments associated with their imports of goods processed through the foreign exchange market during 2020, including the payment whose course is being requested, does not exceed the amount for which the importer would have access to the foreign exchange market when computing the imports of goods that appear in their name in the import payment tracking system for goods (SEPAIMPO) and that were made official between 01.01.2020/XNUMX/XNUMX and the day prior to accessing the foreign exchange market. The total amount of payments for imports of goods associated with the client's imports must also include payments for cancellations of lines of credit and/or commercial guarantees that were made by the entities by virtue of the client's imports.
2.2. documentation that allows you to verify compliance with the remaining requirements established for the operation by the exchange regulations.
Likewise, on July 8, 2020, the aforementioned regulations were reformulated, through a new Communication A 7068 which established that until July 31, 2020, to access the exchange market for making payments for imports of goods (concept codes for their B05, B06, B07, B10, B12 and B13) or the cancellation of principal of debts originating in the import of goods (concept code P13), prior approval of the BCRA must be obtained, unless one of the specified exceptions is verified.
Measures that by Communication A 7151 of October 29, 2020, it was decided to remain in force until December 31, 2020 inclusive.
All these provisions have added uncertainty to the universe of subjects, whether individuals or legal entities, who see their international commercial relations restricted, preventing them from making projections over time with the certainty of faithful compliance with the obligations that arise naturally from any commercial contract.
Legitimacy of measures
Now, how far do the powers of an entity like the BCRA go to limit the primary guarantees of citizens?
The divergences and the lack of proper administration by the State cannot be the object of measures that harm the legitimate functioning of citizens who act in lawful international trade. Not even the effect of the pandemic and quarantine imposed by the National Government itself can ignore that it has led to placing the economy in a clear and publicly evident reduction of its normal commercial operational functioning and the effort that each of the subjects is making to try to move forward, they cannot curtail the due fulfillment of the obligations that arise from an international commercial transaction. Especially, when there is no regulatory framework that prevents the free trade of goods that are within the universe of those not covered by any prohibition for their entry into the customs territory - nationalize -
It is worth noting then, that in the face of such arguments from the BCRA, it is once again evident, as has happened in the past recalling what happened with the "corralito" and "corralón", that in the face of the complexity of its foreign exchange reserves, the legitimate option of an individual to access the exchange market would be hierarchically inferior to the explicit and implicit rights and guarantees of our National Constitution, which is clearly in violation of the right to work, to carry out a lawful commercial activity and the right to property.
Consequently, this is nothing more than a specific validation, but rather a clear violation of rights and guarantees enshrined in the National Constitution. This in no way questions the State's power to control the currency market, but the way in which it is implemented goes against such rights and guarantees, violating basic principles of legality, reasonableness and legal certainty.
Although the Central Bank has regulatory powers, when constitutional rights and guarantees are violated in the exercise of such powers, such measures have a legitimacy defect because they are arbitrary and unreasonable. Even more so when these measures show that, as Lazzarani argues in El Juicio Amparo, page 243 et seq.; we are faced with a real, effective, tangible, concrete and unavoidable harm, which causes certain damage to this plaintiff.
What has Justice said?
These aspects have already been the subject of opinion by the Justice system through the issuance of sentences that have warned of the state of coercion of fundamental guarantees of citizens through measures that are dictated contrary to constitutional precepts such as those discussed here.
“It should be noted that said Communication was modified by its similar one identified as “A” 7068, dated 8/7/20, which established - as far as it is of interest here - that until 31/7/20, to access the foreign exchange market for making payments for imports of goods (concept codes for their B05, B06, B07, B10, B12 and B13) or the cancellation of principal of debts originating in the import of goods (concept code P13), the prior consent of the BCRA must be obtained unless any of the exceptions provided for therein are verified. In this context, and as a corollary to the decision adopted in the preceding recitals, it is not necessary to conclude that it is appropriate to accede to what is intended and suspend - as appropriate - the provisions of the aforementioned rule, otherwise the petitioner would be prevented from carrying out the operations that are authorized ... Therefore, based on all the above, I Resolve: II. Suspend –as appropriate- the provisions of Communication A 7030, of the BCRA, modified by its similar A 7068, insofar as it requires the consent of the Central Bank of the Argentine Republic for access to the exchange market for the realization of payments for imports of goods (concept codes B05, B06, B07, B10, B12 and B13) or the principal cancellation of debts originated in the import of goods (concept code P13)” (pursuant to the Judgment of July 2020, Case 9678/2020 – Berserker Shipping SRL vs. EN-secretary of domestic trade and others s/ precautionary measure (autonomous) – Federal Administrative Litigation Court No. 7 – Secretary No. 14).
Conclusion
Finally, the effects of any failure to comply with the obligations arising from the duty to honour debts cannot be ignored. Perhaps the National State is not aligned with this conduct on many occasions, however, for a company not complying with the cancellation of a payment commitment due to a commercial transaction, leads to the impossibility of developing and projecting into the future. Because if such compliance does not exist, it causes a break in the commercial process, starting from the impossibility of continuing in the face of the loss of the most precious support in international trade relations, which is trust.
Guillermo Felipe Coronel is a lawyer specializing in Customs Law
The author is a lawyer and member of the Institute of Customs Law and International Trade of the Argentine Association of Constitutional Justice.
