Regulation of “Payment Service Providers”
On January 9, 2020, the Central Bank of the Argentine Republic issued Communication “A” 6859 (the “Communication”). The Communication establishes a partial regulation of the activities of Payment Service Providers (“PSP”), this is, of those legal persons that, without being financial entities, fulfill at least one function within a retail payment scheme, such as offering freely disposable accounts to their clients to make or receive payments, within the framework of a global payments system.
The Communication establishes the following obligations to be fulfilled by the PSP´s, which must be carried out, at most, by January 31, 2020:
- Provide for client funds to be, at all times, immediately available for an amount equivalent to, at least, the amount credited in the payment account, with the PSP systems having to identify and individualize the funds of each client;
- Deposit 100% of the funds of its clients, at all times, in peso denominated accounts located in financial institutions within Argentina;
- Upon the request of its clients, transfer the balance in the payment account to the realization of operations with “common money funds” in the country; and
- Carry out all PSP transactions (payment of suppliers, salaries, etc.) through separate accounts to those where the funds of their clients are deposited.
Likewise, the communication establishes that in the event of non-compliance with any of the aforementioned obligations, the sanctions established in articles 41 and 42 of the Financial Entities Law, and concordant provisions, will be applicable to the PSPs and the members of their administrative/control bodies.
For more information, do not hesitate to contact Juan Pablo Bove, Federico Otero, Julián Razumny, Agustín Griffi, Pablo Tarantino, or to corporate@trsym.com.
Modifications introduced to the Personal Assets Tax
Decree No. 99/2019, published in the Official Gazette last Saturday, December 28, 2019, introduced implementing regulations to Law No. 27,541 (please refer to the following link for comments on the referred law). Therefore, the principal modifications introduced to the Personal Assets Tax (PAT) are the following:
1.- Applicable Rates
Law No. 27,541 has modified the rates to determine the PAT corresponding to the 2019 (and following) tax periods, which now range within a progressive scale between 0.50% and 1.25%, applicable over the total value of the levied assets located in Argentina.
Through Decree No. 99/2019, the Executive Power has exercised the powers delegated by Law No. 27,541 so as to establish, until December 31, 2020, differential rates to levy assets located abroad, which may exceed in up to 100% those that apply over assets located in Argentina. In such sense, the Executive Power established a progressive scale ranging between 0.70% and 2.25% over the total value of the assets located abroad. A sole tax rate applies over the total value of such assets, therefore dismissing the system -that currently applies only to assets located in Argentina- under which different portions of the taxpayer’s levied estate is taxed under increased rates as its value arises.
It is worth noting that the non-taxable minimum threshold continues in the figure of two million Argentine pesos (AR$ 2,000,000), and that such amount should be first deducted against the value of the assets located in Argentina. Under Decree No. 99/2019, the non-taxable minimum threshold amount would be irrelevant for purposes of establishing the applicable rate within those included in the differential rate scale corresponding to assets located abroad. Indeed, the non-taxable minimum threshold would only be relevant for purposes of establishing the taxable base of the differential rate.
Furthermore, the rate applicable to the following assets has been risen from 0.25% to 0.50%:
- Shares or participations in the equity of Argentine companies, held by individuals or undivided estates domiciled in Argentina or abroad, and/or by foreign companies or by any other foreign entity (the applicable tax should be assessed and paid by the Argentine company whose equity is levied).
- Levied assets belonging to foreign aliens that are held, custodied, guarded, administrated, possessed, used, enjoyed, disposed of, or co-owned by Argentine individuals, entities or undivided estates.
2.- Benefits on Fund Repatriation
Law No. 27,541 also empowered the Executive Branch, until December 31, 2020, to reduce the differential rates in cases of repatriation of funds arising from the sale of financial assets located abroad.
In such context, the Decree has established that those who, as of March 31 of every year, repatriate financial assets representing at least 5% of the total value of their assets located abroad, will be exempted from the application of the differential rate.
For the purposes foreseen in the preceding paragraph, the following assets will be deemed as financial assets located abroad: The holding of foreign currency deposited in banking and/or financial and/or similar entities located abroad; company participations and/or equivalents (private securities, shares, quotas and other participations) in any type of entities, corporations or companies, with or without legal status, incorporated, domiciled, based or located abroad, including sole proprietorships (“empresas unipersonales”); rights inherent to the status of beneficiary, fideicommissary (or similar) of any kind of trusts (or similar structures) established abroad, or in foreign private interest foundations or in any other type of similar affected-estate (“patrimonio de afectación”) located, based, domiciled or established abroad; any kind of financial instrument or security, such as bonds, private securities, representative securities (“valores representativos”) and share depositary receipts, quotas in common investment funds and other similar structures, independently from their denomination; credits and any type of foreign right with economic value and any other type of asset that may be foreseen in the implementing regulations.
The benefit will be maintained to the extent the repatriated funds stay deposited under the owner’s name in entities comprised within Law No. 21,526, until December 31 (inclusive), of the calendar year in which the repatriation took place.
The Decree establishes that where reimbursement applies, it will be made up to an amount equivalent to the one that exceeds the increase in the obligation that would have to be paid in case the foreign assets were levied under the progressive scale applicable to the assets located in Argentina.
3.- Residence Criteria
Law No. 27,541 has established, with effects as of 2019 tax period, that the levied subject will be ruled by the residence criteria under the terms and conditions foreseen in sections 119 (and following) of the income tax law (text 2019), hence disregarding the previously applicable domicile criteria. In such context, Decree No. 99/2019 establishes that any reference made by legal, implementing or complementary regulations to the “domicile” connecting nexus should be understood as referred to “residence”. However, it is worth pointing out that unlike Law No. 27,541, and in what could imply a regulatory excess, Decree No. 99/2019 does not refer to sections 119 (and following) of the income tax law (text 2019) but to sections 116 (and following) of the income tax law (text 2019).
4.- Matters of Uncertain Interpretation
Due to the defective wording of the regulations commented herein, or to the omission of their treatment, there is uncertainty as to the actual scope of the following matters, which we expect be clarified by the implementing regulations to be issued by the National Tax Authority:
Validity of the benefit on funds repatriation: There is no certainty as to whether the funds repatriation benefit applies to the 2019 tax period, considering that the repatriation period elapses on March 31 and there is an obligation to maintain the repatriated funds deposited in an Argentine financial entity up to December 31.
Under a reasonable interpretation that considers the spirit of the tax reform, the differential rates will not apply to the 2019 tax period to the extent the funds are repatriated before March 31, 2020 -i.e., before the filing date of the 2019 affidavit- and held in Argentine financial entities up to December 31, 2020. The benefit would fall upon breach of this last requirement, and the related consequences would hence apply (liability on tax differences, interests and fines).
Scope of the reimbursement benefit: Neither Law No. 27,541 nor Decree No. 99/2019 clarify what is reimbursed. In principle, and under the current regulatory status of the matter, we understand that this benefit would apply if a taxpayer files the affidavit and pays the differential rate before its due date, and further repatriates the relevant funds before March 31. In such case, the amounts paid under the differential rate would be reimbursed, as well as the difference of the advanced payments corresponding to the following tax period.
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For additional information on the matters commented herein, please contact Gastón A. Miani, Ana Do Nizza, or Juan Pablo Baumann Aubone.
Impact on Tax Matters of the Social Solidarity and Productive Reactivation Act
Below please find a brief summary of the principal tax aspects of the law No. 27,541, enacted by the Senate last Saturday, December 21, 2019, known as “Social Solidarity and Productive Reactivation Act”, as it arises from the promulgation made through Decree No. 58/2019 (with a partial veto related to aspects not addressed herein) and its publication in the supplement of the Official Gazette dated December 23, 2019:
1.- Tax regularization regime: The law establishes a tax regularization regime for debts resulting from tax, customs and social security matters accrued as of November 30, 2019 (inclusive), or from infringements committed as of the same date, and only applicable to Micro, Small and Medium Companies. The law foresees the extinction of criminal actions, the waiver of penalties arising from formal or substantial infringements, and the waiver of compensatory or punitive interests in different proportions depending on the circumstances of the case, among other benefits. The concepts incorporated into the tax regularization regime may be cancelled through offset against certain credits existing against the tax authority, cash payment (in which case a 15% reduction over the consolidated debt would be awarded) or payment plans of up to 120 installments depending on the circumstances of the case. The term to perform the incorporation into the tax regularization regime elapses on April 30, 2020 (inclusive).
2.- Employer social security contributions: The rate of the employer social security contributions corresponding to the subsystems arising from Laws No. 19,032 (Social Security National Institute for the Retired), No. 24,013 (National Employment Fund), No. 24,241 (Argentine Integrated Social Security System) and No. 24,714 (Family Allowances) is established on 20.40% for the employers of the private sector whose principal activity qualifies under the “services” or “commerce” categories and to the extent their total annual sales exceed the limits for qualifying as a “Medium Company – Second Category”, and on 18% for the rest of the employers of the private sector. The law awards the possibility to compute a given percentage of the referred employer social security contributions as a tax credit against VAT, and further establishes a monthly non-taxable minimum threshold over each workers’ salary of AR$ 7,003.68 (with particularities on certain cases) and an additional monthly discount of AR$ 10,000 over the total taxable base for those employers with a payroll including no more than 25 employees.
3.- Personal Assets Tax: The progressive rate scale ranging between 0.25% and 0.75% applicable to Argentine individuals and undivided estates is replaced by a new one ranging between 0.50% and 1.25% and with effects as of the 2019 tax period. In addition, the Executive Power is authorized to establish higher differential rates of up to 2.50% to levy assets located abroad, as well as to reduce them in case of repatriation of the product of the sale of financial assets located abroad. The rates applicable to substitute taxpayers for the holding of shares or participations in the equity of companies ruled under Law No. 19,550 and for the administration or disposition of assets belonging to foreign aliens are increased from 0.25% to 0.50% with effects as of the 2019 tax period. Furthermore, the law establishes that with effects as of the same tax period the subject of the personal assets tax will be ruled by the residence criteria on the terms foreseen in the income tax law, hence disregarding the previously applicable domicile criteria.
4.- Income tax: The reduction to 25% of the corporate income tax rate applicable to the subjects comprised within subsections a) and b) of section 73 of the income tax law (text 2019) as well as the increase to 13% of the rate applicable to dividend distributions foreseen in the second paragraph of subsection b) of section 73 of the income tax law (text 2019) and in section 97 of the same act, is suspended up to the financial years starting as from January 1, 2021. The so called “cedular tax” applicable on the Argentine sourced net income obtained by Argentine individuals and undivided estates over interests arising from term deposits (“depósitos a plazo”) made in institutions subject to the financial entities regime, public securities (“títulos públicos”), tradable securities (“obligaciones negociables”), stakes in common investment funds (“cuotapartes en fondos comunes de inversión”) and debt securities (“títulos de deuda”) of financial trusts, is abrogated as of the 2020 tax period. Furthermore, an exemption is established over interests arising from deposits in saving accounts (“cajas de ahorro”), special saving accounts (“cuentas especiales de ahorro”), term deposits (“depósitos a plazo fijo”) in Argentine pesos, and third party deposits or other forms of gathering funds from the public as determined by the Argentine Central Bank, in all cases to the extent they are made in institutions subject to the financial entities regime, whilst interests arising from deposits subject to clauses of adjustment are excluded from the exemption. The law further re-establishes the exemptions foreseen in section 36 bis of Law No. 23,576, in subsection b) of section 25 of Law No. 24,083 and in subsection b) of section 83 of Law No. 24,441. Finally, exemptions are also established as from tax period 2020 over (i) income obtained by Argentine individuals and undivided estates from the disposition of the assets foreseen in section 98 of the income tax law (text 2019) but not comprised within the first paragraph of subsection u) of section 26 of the referred norm (text 2019), and to the extent they are listed in exchange markets authorized by the CNV, and (ii) income obtained by foreign beneficiaries on the assets not comprised in the fourth paragraph of subsection u) of section 26 of the income tax law (text 2019), to the extent they do not reside in non-cooperative jurisdictions or the invested amounts do not come from non cooperative jurisdictions. Argentine individuals and undivided estates will not be subject to the so-called “cedular tax” over interests corresponding to the 2019 tax period arising from public securities (“títulos publicos”) and tradable securities (“obligaciones negociables”) to the extent they choose to affect such interests to the computable cost of the security from which they arise.
5.- The new PAIS Tax: A new levy denominated as the PAIS tax (Spanish acronym for the phrase “For an Inclusive and Supportive Argentina”) is created for a term of 5 tax periods computed as from the moment in which the law comes into force. The PAIS tax levies (a) the purchase of foreign currency made by Argentine residents for saving purposes or without other specific purpose, (b) foreign currency exchanges made by financial entities on account of the purchaser aimed at paying the acquisition of assets or services made abroad (or of services rendered in Argentina by non-resident parties) that are cancelled through the use of credit, debit or purchase cards, (c) the purchase of services rendered abroad made through Argentine travel or tourism agencies, and (d) the purchase of land, air or aquatic passenger transport services with foreign destination, to the extent that access to the MULC (Spanish acronym for the “Sole and Free Foreign Exchange Market”) is needed for cancelling the transaction. The rate of the PAIS tax is established on 30%, that will apply on the total value of the transaction in the cases foreseen in points (a) to (c) above, and over the value of the transaction net of taxes and government fees in the cases foreseen in point (d) above. The tax applies over Argentine residents that make any of the transactions foreseen in points (a) to (d) above, whilst those entities specifically indicated as such shall act as perception and liquidation agents.
6.- Tax on debits and credits: The tax rate applicable over debits arising from any form of cash extraction is duplicated. The referred increment does not apply on accounts belonging to individuals or entities qualifying as Micro or Small Companies.
7.- Internal taxes: The internal taxes regime applicable over the assets comprised in section 38 of Law No. 24,674 (including different type of vehicles, motorcycles, etc.) is modified through the establishment of new limits for exemptions and new taxable basis, as well as through the incorporation of new value categories and incremented tax rates depending on the case.
For more information, do not hesitate to contact Gastón A. Miani, Ana Do Nizza or Juan Pablo Baumann Aubone.
Update in Annual Sales Limits in Order to Be Considered as Small and Medium Size Company
On December 10th, 2019, the Secretaría de Emprendedores y de la Pequeña y Mediana Empresa issued Resolution No. 563/2019 (the “Resolution”) in order to update the annual sales amounts applicable in order to qualify as small and medium size company.
Please find bellow the updated annual sales limits (expressed in Argentine Pesos), listed for each activity/sector:
| Category | Activities/Sector | ||||
| Construction | Services | Commerce | Industry and Mining | Agricultural | |
| Micro | 15,230,000 | 8,500,000 | 29,740,000 | 26,540,000 | 12,890,000 |
| Small | 90,310,000 | 50,950,000 | 178,860,000 | 190,410,000 | 48,480,000 |
| Medium size tier 1 | 503,880,000 | 425,170,000 | 1,502,750,000 | 1,190,330,000 | 345,430,000 |
| Medium size tier 2 | 755,740,000 | 607,210,000 | 2,146,810,000 | 1,739,590,000 | 547,890,000 |
Finally, please note that the Resolution has become effective today.
For more information, do not hesitate to contact Juan Pablo Bove, Federico Otero, Julián Razumny, Agustín Griffi, Pablo Tarantino, or to corporate@trsym.com.
News in the Midstream Sector: Rules for Natural Gas Storage
On November 7th, 2019, Resolution No. 722/2019 issued by the National Gas Regulation Entity (in Spanish, Ente Nacional Regulador del Gas and hereinafter, the “Resolution” and “ENARGAS”, as applicable), has been published in the Official Gazette, which approved the rules for natural gas storage (the “Rules”).
The Resolution has been issued within the framework of: (i) Law No. 24,076 (which contains the main rules for natural gas midstream and downstream), and (ii) its regulatory Decree No. 1,738/1998 (the “Regulatory Decree”), which foresee natural gas storage companies as agents of the natural gas industry.
The key takeaways of the Rules are singled out below:
- Scope
The Rules establish the conditions, procedures and requirements that must be complied with by companies willing to own and operate natural gas storage facilities, as well as the requirements that must be met in order to register such facilities under the natural gas storage registry.
Natural gas storage is defined by the Rules in the following terms: “the activity intended to store natural gas in underground or ground level facilities, during a certain period of time, including delivery, storage and further withdrawn, and when applicable, its liquefaction and regasification” and further states that all ancillary activities are comprised therein.
Storage facilities comprised by the Rules are: (i) LNG storage tanks, (ii) CNG and/or in bulk CNG loading and unloading facilities, (iii) LNG regasification and/or liquefaction terminals, (iv) LNG storage “peak shaving” facilities, (v) regasification or liquefaction mobile equipment, (vi) LNG transportation tanks, (vii) underground natural gas storage facilities, and (viii) CNG tanks.
Further, facilities outlined above are also subject to safety regulations and controls that ENARGAS may issue from time to time and must also be operated pursuant to NAG Codes (i.e. applicable local technical codes) and regulations passed by the ENARGAS regarding natural gas storage.
The following facilities are expressly left out from the Rules: (a) facilities aiming to use gas as a fuel for automobile transportation; (b) fuel stations with CNG and/or LNG storage; (c) methane tankers focused on water transportation used to import and export LNG from and towards a storage, regasification or liquefaction facility; (d) hydrocarbon production equipment which run with LNG as fuel, as well as other upstream activities.
The Rules indicate that such facilities must be operated pursuant to the rules, codes and best industry practices, until the ENARGAS issues specific regulation addressing those facilities.
- Authorized entities
Companies may carry out natural gas activities insofar a prior authorization issued by the ENARGAS is in place. Such authorization must be issued by the ENARGAS no later than forty-five (45) business days as of the date on which the application is submitted, thereof.
Companies that currently operate natural gas storage facilities are granted with a sixty (60) business day-term in order to begin the registration procedure.
The Rules allow gas transportation and distribution companies to act as natural gas storage agents, whether by their own or throughout a third party or by an affiliate. A separate balance sheet and accounting procedure is required for that end.
Finally, the Rules allow applicants to comply with the requirements set forth therein by way of a Technical Operator (legal entity with experience on administration, management operation and maintenance of natural gas storage facilities, of no less than 5 years).
A Technical Operation Agreement must be entered by and between the applicant and the Technical Operation.
- Types of facilities under the Rules
In order to determine the relevant technical requirements for each specific registration, the following categories are established in the Rules:
(i) Large LNG storage: facilities equaling or exceeding 15.000 m3.
(ii) Micro/small LNG storage: facilities of less than 15.000 m3.
(iii) CNG in bulk: facilities which load or unload CNG in bulk or mobile equipment.
(iv) Underground reservoirs: (a) depleted gas reservoirs; (b) salt caverns; (c) water aquifers, and (c) coal bed methane.
- Penalty regime
The Regime foresees a penalty regime raging penalties to revocation of the authorization, prior notice and defense by the natural gas storage agent.
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At TRSyM we are available to provide clarifications or further information of any matter addressed above. For further information, please do not hesitate to contact either Nicolás Eliaschev or Javier Constanzó.
Argentina's Anti-Corruption Office Published a Guide for the Implementation of Compliance Programs in Small and Medium Enterprises
On November 12, 2019, through Resolution 36/2019, the Anti-Corruption Office (OA) published the Supplementary Guide for the implementation of Compliance Programs in Small and Medium Enterprises ("PyMEs" for its Spanish translation).
The aforementioned resolution adds to the guidelines published by the OA in 2018 for the design, implementation and evaluation of Compliance Programs within the framework established by the Corporate Criminal Liability Law No. 27,401.
This Complementary Guide for the implementation of Compliance Programs aims to provide practical tools and instruments that can be applied by PyMEs, considering the specific characteristics of their activities. This is a joint work with the Secretariat of Entrepreneurs and PyMEs of the Production and Labor Ministry.
It is especially important since, from the effective date of Law 27,401, legal persons, including small and medium-sized companies, are responsible for certain crimes related to corruption in which they may have intervened, or that are committed in the name, interest or benefit of the company. That same law promotes that legal entities implement Compliance Programs, as a condition to participate in certain contracts with the National Government, or as a parameter of graduation of an eventual penalty. The existence of a Compliance Program is also an element that, under certain conditions, can lead to the exemption of the criminal sanction.
The OA received and incorporated contributions from compliance experts, stakeholders and the general public, through the public consultation platform of the Ministry of Modernization Government.
The Complementary Guide for PyMEs can be checked on the OA's website.
For further information, do not hesitate to contact Eugenia Pracchia and/or María Emilia Cargnel.
Argentine Securities Commission Issues Resolution on Digitalization of Corporate and Accounting Books
On October 25th, the Argentine Securities Commission (“CNV”) issued General Resolution No. 813/2019 (“GR CNV 813/19”), which authorizes certain companies subject to CNV´s regulatory compliance (issuers of debt and shares publicly offered) to keep all of their corporate and accounting books digitally; a possibility that already existed but only for the Registry of Attendance to Shareholders’ Meetings book.
GR CNV 813/19 was issued following the guidelines of Law No. 27,444 (Simplification and De-Bureaucratization for the Productive Development of the Nation) and establishes the requirements to request such authorization, including the need to digitally sign corporate and accounting books, for which company signatories need to obtain a digital certificate issued by a licensed certifier.
In order to avoid problems with the digital signature verification software, companies must choose between the following alternatives:
- hire an online verification and signature verification service with a licensed certifying authority; or
- develop the signature verification and time stamp software and have an external auditor's opinion regarding its correct operation.
Furthermore, companies must keep support documentation of their accounting operations and their management. In case of entrusting the deposit of such documentation to third parties, they must state in a note to their financial statements the place where it is stored, and identify the subject in charge of the deposit and its address.
RG CNV 813/19 entered into force last Monday, October 28th.
For further information, do not hesitate to contact Juan Pablo Bove, Federico Otero, Julián Razumny, Pablo Tarantino, and/or Agustín Griffi.
Capital Controls in Argentina: Relevant Updates on Payments of Imports of Goods
Pursuant to Communication "A" 6818 dated October 28, 2019, the Argentine Central Bank updated the foreign exchange regulations applicable to payments of imports and other purchases of goods. The new regulatory framework introduces relevant improvements, such us the regulation of import financings, which until now were not specifically contemplated in the regulation, and the reimplementation of the SEPAIMPO, a monitoring regime of payments of imports.
Below are the key takeaways of the new regime:
- General Provisions
The general rule is that Argentine importers may access to the local foreign exchange market to make payments of imports of goods and other purchases of goods, subject to certain conditions provided in the regulation (for further detail, see points 3 and 4 below). The payment includes any concept that is part of the purchase condition registered in the invoice issued by the foreign supplier.
Payments of imports of goods are divided in two types: (i) payments of imports that have customs clearance and (ii) payments of imports with customs clearance pending. In both cases, the access to the foreign exchange market includes the payment of commercial debt incurred to finance such imports of goods, including, among others: (a) financing provided by the foreign supplier, (b) financing provided by a foreign export credit agency, and (c) financing provided by a local or foreign financial entity where disbursements are used, net of costs and expenses, to pay to the foreign supplier directly.
The regulation of import financing is a positive aspect of the new regime. Until now, the foreign exchange regulations did not distinguish between financial indebtedness and commercial indebtedness, and the direct application of the disbursement to pay the exporter was not allowed. From now on, disbursements of import financings may be used to pay to the foreign supplier directly, and the requirement to repatriate and convert the loan to Pesos will not be applicable, as it occurs with financial indebtedness.
- Tracking System of Payments of Imports (“SEPAIMPO”)
The SEPAIMPO is a system implemented by the Argentine Central Bank to track the payments of imports, as well as to monitor the nationalization of the goods associated with advance payments of imports. For each import, the importer shall appoint a financial institution as monitoring entity. The monitoring entity shall verify the conditions to make payments and track the nationalization of the goods associated with an advance payment.
- Payments of Imports with Customs Clearance
The importers may purchase foreign currency in the local exchange market for the payment of imports with customs clearance registered in the SEPAIMPO, as long as the monitoring entity verifies the following requirements, among others:
- Proof of customs clearance, copy of the invoice, copy of the shipping document, and verifies that the beneficiary of the payment is the foreign supplier or the financial institution or export credit agency that financed the purchase.
- The sale of foreign currency is made against debit to a local account of the importer.
- The payment is not made before the due date of the obligation. Prepayments require prior approval by the Argentine Central Bank.
- Payment of Imports with Customs Clearance Pending
4.1. Advance Payments
The monitoring entity may grant access to the foreign exchange market for advance payments, provided that the following requirements are met, among others:
- Receives documentation to determine the existence of the purchase and the requirement of advance payment prior to the date of delivery of the goods.
- The beneficiary of the payment is the foreign supplier.
- The sale of foreign currency is made against debit to a local account of the importer.
- Receives an affidavit from the client in which it undertakes to obtain customs clearance of the goods within 90 calendar days from the date of payment, or to repatriate and convert the payment to Pesos within such period. Prior Argentine Central Bank approval shall be obtained for advance payments to affiliates or if longer periods are required.
- The amount to be paid is reasonable.
- The client has not defaulted previous advance payments.
4.2. Payment at Sight against Shipping Documents
The monitoring entity may grant access to the foreign exchange market for payments at sight, provided that the following requirements are met, among others:
- Receives copy of the invoice.
- Receives copy of the shipping documents.
- Receives documentation setting forth the obligation to pay at sight against the presentation of shipping documentation.
- The beneficiary of the payment is the foreign supplier, the foreign financial entity or the official credit agency that financed the advance payment to the exporter.
- The sale of foreign currency is made against debit to a local account of the importer.
- Receives an affidavit from the client in which it undertakes to obtain customs clearance of the goods within 90 calendar days from the date of payment, or to repatriate and convert the funds to Pesos within such period.
For more information, do not hesitate to contact Marcelo R. Tavarone, Federico Salim, Julieta De Ruggiero or Francisco Molina Portela.
Argentine Central Bank Tightens Capital Controls
In order to preserve the international reserves, the Argentine Central Bank implemented new restrictions on the purchase of foreign currency. It did so through Communication "A" 6815 dated October 28, 2019.
Below are the key takeaways of the new restrictions:
- Creation of External Assets: The limit for the creation of external assets by individuals is reduced from US$ 10,000 to US$ 200 per calendar month. The transaction must be carried out with debit to an account in a local financial institution of the client, admitting the use of cash up to US$ 100 per month. These limits are not cumulative and include all transactions already performed in October. According to point 1.4 of Communication "A" 6776 and the press release issued by the Argentine Central Bank on October 28, 2018, we understand that credit cards are not subject to this limit.
- Debit Card Cash Withdrawals: Withdrawals of foreign currency outside Argentina using local debit cards may only be made against deposits in foreign currency in local financial institutions.
- Import Advances: Importers may access the foreign exchange market for the payment of import advances to non-affiliates. Customs clearance shall be obtained within the following 90 days. Prior Argentine Central Bank approval shall be obtained if the supplier is an affiliate of the importer. Note that, prior to this new regulation, advance payments were allowed, provided that customs clearance was obtained within the following 180 days, without any distinction between affiliates and non-affiliates.
- New Information Regime for Transactions Over US$ 2,000,000: Financial institutions and exchange agencies shall report to the Argentine Central Bank on a daily basis of the foreign exchange transactions to be carried out in the following three (3) business days for amounts higher than US$ 2,000,000. In this regard, clients requesting such transactions shall inform their financial institution or exchange agency the proposed transactions with reasonable anticipation. On the day of the transaction, the client may use a different entity.
- Non-residents: The limit to purchase foreign currency by non-residents, originally set at US$ 1,000, is reduced to US$ 100 per calendar month. Payments by ANSES (National Social Security Agency) to beneficiaries of old age pensions are exempt from that limit.
For more information, do not hesitate to contact Marcelo R. Tavarone, Federico Salim, Julieta De Ruggiero or Francisco Molina Portela.
Pablo Tarantino and Agustín Griffi join Tavarone, Rovelli, Salim & Miani as partners of the Mergers and Acquisitions and General Corporate Department
Pablo Tarantino and Agustín Griffi have joined Tavarone, Rovelli, Salim & Miani as partners. In this way, the Firm continues with the expansion and growth of its Mergers and Acquisitions and General Corporate Practice with a team of more than 20 lawyers working full-time in this practice group. The Firm reaffirms its commitment to expansion and once again invests in what has been its main distinctive feature: a young and talented team of lawyers led by partners highly committed to both clients and their team.
Pablo Tarantino is a lawyer specialized in corporate law, area in which he has 15 years of experience. He graduated from the School of Law of the University of Buenos Aires (2004). He began his career at Remaggi, Pico, Jessen & Associates in 2004. He has assisted clients in general corporate law, mergers and acquisitions, as well as in the design of corporate structures for the consummation of domestic and international business. In 2007 he joined Grupo Werthein as Senior Legal Counsel.
Agustín Griffi is a lawyer specialized in corporate law, area in which he has almost 15 years of experience. He graduated from Torcuato Di Tella University School of Law (2005) and obtained an LL.M. degree in corporate and financial law from Fordham University in New York (magna cum laude, 2012). During his career, Agustín distinguished himself in well-known law firms, having worked for 10 years at Bruchou, Fernández Madero & Lombardi. In 2008, he worked as a foreign lawyer at Barbosa, Müssnich & Aragão (Rio de Janeiro) and in 2012 as an international visiting attorney at Dechert LLP (New York). He has assisted clients in general corporate law, mergers and acquisitions, as well as in the design of corporate structures for the conduct of business in Argentina and abroad. In the last 6 years he served as Senior Legal Counsel of Grupo Werthein.
Both lawyers join the Firm after leading the in-house legal team of Grupo Werthein, the Argentine private family holding that totally or partially owns, among others, the following Companies: Experta Seguros (P&C, workers’ compensation and retirement insurance), La Estrella Seguros de Retiro, Gregorio, Numo y Noel Werthein (agribusiness company), Cachamai (food, mass consumption), Transportadora de Gas del Sur S.A., Bodega Riglos-Huarpe (vineyards) and Fideicomiso Buenos Aires Landmark (the successful bidder of the "Tiro Federal" auction designed for its real estate development). Pablo and Agustín will continue advising Grupo Werthein and its subsidiaries in all aspects of corporate law.
In joining Tavarone, Rovelli, Salim & Miani, together with partners Juan Pablo Bove, Federico Otero and Julian Razumny, Pablo and Agustin will contribute to the development and expansion of the M&A and Corporate Practice, an area in which the Firm has experienced remarkable growth, increasing its share in mergers and acquisitions deals, as well as further expanding the client base to which the Firm renders corporate legal advice.
Tavarone, Rovelli, Salim & Miani is proud to have Pablo and Agustin among its members, as they will strengthen the Firm and contribute to keep it as one of the most active in our legal market.