Recently, the DGA has implemented, through General Instruction No. 7 of 2022, an early warning system on exports without liquidation of foreign currency. The regulation in question implements a monitoring mechanism for grain exporting companies, in response to the lack of liquidation of foreign currency corresponding to their operations. The monitoring will allow Customs, in joint work with AFIP, to exchange information with the BCRA and the Ministry of Agriculture, Livestock and Fisheries in real time and detect maneuvers of non-liquidation of foreign currency. In this way, if the company wants to continue operating, it must guarantee the foreign currency with a surety bond or a bond, otherwise it will be preventively suspended from the exporter registry until it duly justifies the non-liquidation of foreign currency.
General Instruction Guidelines
1. During the first 10 days of each month, Customs Administrators will control the income and liquidation of foreign currency for export operations of goods corresponding to the operations registered in their jurisdiction and will inform the General Subdirectorate on which they depend, who will consolidate the information once a month for subsequent referral to the General Subdirectorate of Customs Control.
2. The General Subdirectorate of Customs Control will send a monthly communication to the Central Bank of the Argentine Republic and to the Secretariat of Agriculture, Livestock and Fisheries, dependent on the Ministry of Economy or to the area of the Federal Administration of Public Revenue that is competent, in order to request them to report whether the exporters whose non-compliances were reported, made the effective entry of the foreign currency corresponding to the referred operations.
3. If, based on the response provided by the aforementioned authorities, the actual non-compliance is verified, the Administrator of the Customs office of registration will notify the exporter to, within a period of 10 days, proceed to liquidate the corresponding foreign currency or guarantee its entry, if applicable.
4. Once the period specified in the previous point has expired without the entry of foreign currency having been made or guaranteed, the Customs Administrator - by means of a reasoned resolution and based on the particularities of each case - will proceed to apply the preventive suspension, in accordance with the terms of article 97 of the Customs Code, making the necessary communications through the respective hierarchical channel, all without prejudice to any other disciplinary sanctions that may apply. Likewise, if deemed appropriate and separately respecting tax secrecy, the Administrator may request the customs risk profile of the exporter in question from the Risk Management Directorate.
Power of control
We do not believe that the State should be absent from its powers in import and export controls, since the Customs Office has its existence based on the national organization and the constitutional order. But precisely in relation to this order, the State must act within the framework that the rule of law itself determines.
As we have pointed out, it is not a question of questioning the legitimate functions and powers of the State, but rather of ensuring that they are developed within the relevant constitutional framework.
First of all, it is necessary to determine what the functions and powers of the Customs are. To do so, we refer to what was already expressed opportunely in this same medium in a note entitled “Reflections on the power of Customs in relation to the control of the entry and exit of foreign currency"[I]. Seeking to summarize some of what has been pointed out then, we affirm that Customs exercises its control over the traffic of merchandise, but not over the entry and exit of foreign currency (art. 112 CA). Issues regarding the entry and exit of foreign currency are the responsibility of the Central Bank. Nor did Decree 618/97 invalidate the provisions of the Customs Code.
Therefore, the General Directorate of Customs has the authority to hear cases as an administrative judge, as determined by the Customs Code itself, which includes the traceability of a customs operation. In such a way that any other control is totally unrelated to its function.
As long as the Customs Service verifies the value of the merchandise in question, as part of its observation of a customs operation, it is legitimate. But what exceeds its function and power is to try to place the Customs Service as controller of the entry and exit of foreign currency, exceeding its own functions and powers. And as observed in the aforementioned note, there is a precedent in which the excess of functions of the Customs Service was pointed out, in a ruling of the National Tax Court (case ATANOR SCA v. DGA s/ appeal – File 34282-A – Sala F del TFN – 7/4/2015).
Concluding on this note, saying: “The line of legality cannot be drawn on objectives that are not proper to Customs, even when the verification of value is part of the authority of this agency. If its actions have an effect, in their end, other than the control of international traffic of goods and mutate, in some way, towards the control of entry or exit of foreign currency, it would be intervening in functions that the Law, clearly, did not impose in favor of Customs.
On the other hand, in an opinion note entitled “The customs legal regime and the National Constitution"[ii], it is highlighted that “When there are situations in which laws and resolutions contradict constitutional provisions and treaties, the latter rules must be chosen, leaving aside laws and regulations issued in clear contradiction with the provisions of the CN and International Treaties. Even more so in the case of those that have constitutional hierarchy having been incorporated into the constitutional text in 1994, such as those expressly indicated in paragraph 22 of art. 75.” For this reason, it is clear that no administrative resolution or instruction, even if based on reasons of State policy, can violate constitutional rights and guarantees. This happens when the functions and powers that the Constitution itself, Treaties and regulations that are issued as a result assign to Customs are distorted for other purposes corresponding to other organizations.
It has been said in the note referred to above that: ¨Just as customs legislation and the Customs Service itself have constitutional roots, in the same way and as a corresponding counterpart of powers, the legislation on the matter and the functions of the Customs Service must strictly conform to the rights and guarantees enshrined in the National Constitution. A situation that, on many occasions, does not seem to be properly observed. This is evidenced by provisions issued by agencies outside the customs sphere, but belonging to the Executive Branch, which establish tax treatment impositions and restrictions with prohibitive scope in practice, failing to comply with the constitutional guarantees and international agreements..
And since the relevant functions regarding the entry and exit of foreign currency are matters of Foreign Exchange Criminal Law that exceed the functions and powers of Customs, any preventive measure that this body takes in this regard also violates the principle of innocence of art. 18 of the CN, causing serious irreparable damage by applying a sanctioning measure prior to the operator's discharge.
Dr. Guillermo Vidal Albarracín (h) has pointed this out very well in a note entitled “Possible risks of reporting purely exchange-related issues as smuggling”[iii], stating that “…The analysis carried out must start from the difference between over or under valuations in imports or exports and what truly punishes the crime of smuggling in question. Thus, in order to avoid falling into a symbolic criminal law and to duly respect the constitutional guarantees at stake, it is essential that any action tending to question the possible maneuvers detected, respect the principle of legality.” an opinion that we fully share.
Collision between customs means and the intended purpose
In this sense, if an administrative regulation calls for the use of actions within its functions, but in order to subject them to controls outside its authority, it would be attempting to arrogate or extend powers over a matter that is not within its scope in terms of the Law. Let us remember that among the reasons for which a suspension of the registry of importers/exporters can be sustained is not the absence of a lack of liquidation of foreign currency. On the other hand, although the customs service may suspend due to a need that deems it necessary due to a seriousness in the investigated fault (Art. 97 inc. h of the CA),[iv]), certain conditions must be met, namely: a) the offence must be subject to an administrative investigation; b) it must be based on a resolution that supports the seriousness of the offence under investigation; c) such an offence must be related to the security of the customs service. This leads us to consider that all investigations must be in line with issues that deal with irregularities inherent to the exercise of international merchandise traffic, which is the exclusive matter of Customs and not with other causes that are not within its jurisdiction.
It should also be noted that Title III of Section V of the Customs Code, when dealing with the Guarantee Regime, does not establish the possibility of guaranteeing the lack of entry of foreign currency. This undoubtedly occurs because it is not an attribution of the exercise of control of the Customs, and therefore the possibility of carrying out or the power of the exporter, within the scope of customs, to guarantee such compliance does not reside in the norm, nor is it possible to be required by the customs service.
Consequently, an instruction that may establish sanctions and/or measures, even preventive ones, such as the suspension of registration, motivated by non-compliance beyond the control of the customs bodies and requiring guarantees of such compliance, is to move away from the premises established by the National Constitution and Laws dictated by the Congress of the Nation headed by the Customs..
Conclusion
Thus, we consider that by determining any type of measures that restrict in advance the operations of importers and exporters, based on issues outside of customs control, without the effect of a prior sentence that may be issued due to irregularities due to the lack of entry of foreign currency, not only would the principle of innocence and the possibility of effective judicial protection be violated, thereby overriding constitutional principles and guarantees and international treaties of constitutional rank, but, as previously indicated, protections would be added from an organization such as Customs that does not hold such a control function.
In short, these measures adopted, even with the healthy purpose of discovering evaders, do not form part of the functions and powers of the Customs Service, and in practice they are implemented in such a way that they are not protected by the principle of legality.
The need to focus on the exercise of control over situations such as the one in question and, if necessary, to punish irregularities committed by exporters, must always be framed within the terms mandated by the Law. Otherwise, the search for a proper exercise of control held by the State will be vitiated in its claim, frustrating such a task. Therefore, if the regulations provide for the power to carry out such controls, it should be done, but within the scope of the competence of each agency, without attempting to incur in the use of powers that are not its own in the hands of other administrative bodies, as is the case of Customs.
[I] Dr. Guillermo Felipe Coronel – Customs News – 1.08.2022 –
[ii] Dr. Guillermo Sueldo – Customs News – 14.09.2022 –
[iii] Dr. Guillermo Vidal Albarracín (h) – Customs News – 12.08.2022 –
[iv] ARTICLE 97. – 1. The Director General of Customs shall suspend from the REGISTRY OF IMPORTERS AND EXPORTERS without further proceedings: a) those who lose the capacity to engage in trade on their own, while this situation persists; b) those who are prosecuted for any customs, tax or social security offense until they are acquitted or acquitted by a final judgment or resolution. However, they may be exempted from suspension to the extent that they provide sufficient guarantees to safeguard the fiscal interest; (Infoleg Note: By art. 1 of Decree No. 587/2000 BO 24/7/2000, it is provided that in cases of prosecution of legal entities, the application of the suspension provided for in this section may be deferred, when said persons provide sufficient guarantee to safeguard the fiscal interest involved, to the satisfaction of the GENERAL DIRECTORATE OF CUSTOMS of the FEDERAL ADMINISTRATION OF PUBLIC REVENUE, an autonomous entity within the scope of the MINISTRY OF ECONOMY.)
(c) those who are judicially prohibited from managing or disposing of their assets while this situation persists; (d) those who lose the required solvency or allow the guarantee they have granted in favor of the General Directorate of Customs, dependent on the FEDERAL ADMINISTRATION OF PUBLIC REVENUE, an autonomous entity within the scope of the MINISTRY OF ECONOMY, to expire or decrease until this cause persists; (e) those who are subject to administrative summary, whenever it is deemed necessary by a resolution based on the seriousness of the investigated fault, in relation to the security of the customs service. This suspension will have a preventive character and may not exceed FORTY-FIVE (45) days, extendable once for another equal period, by a reasoned decision, provided that the circumstances that gave rise to such measure continue, but never beyond the date on which the final resolution issued in the summary in question becomes final; f) legal entities when one of their directors, administrators or partners with unlimited liability is judicially prosecuted or convicted of a customs, tax or social security offense. This suspension will only apply when the defendant or convicted person does not cease his or her duties within FORTY (40) days following the notification to this effect made by the customs service to the aforementioned legal entity and will continue until the defendant or convicted person ceases his or her duties or until he or she is acquitted or discharged.
In the case of the natural persons referred to in this section who have been prosecuted, an exception to the aforementioned suspension may be made when sufficient guarantees are provided to safeguard the fiscal interest.
2. Those who repeatedly commit misconduct or serious misconduct in the exercise of their activity shall be sanctioned with suspension from the REGISTRY OF IMPORTERS AND EXPORTERS, in accordance with the procedure provided for in Article 103. (Article replaced by art. 3 of Decree No. 971/2003 BO 28/4/2003.)
The author is a lawyer and member of the Institute of Customs Law and International Trade of the Argentine Association of Constitutional Justice.
The author is a lawyer and member of the Institute of Customs Law and International Trade of the Argentine Association of Constitutional Justice.
