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Foreign exchange controls

The Argentine Central Bank has relaxed the requirements for Argentine exporters to obtain an exemption from their obligation to repatriate the foreign currency proceeds of exports based on lack of payment by the importer.

Since the re-establishment of foreign exchange controls in December 2001, as a general rule, Argentine exporters have been required to transfer to Argentina and exchange for pesos the foreign currency proceeds of their exports before the applicable deadline. The new regulation, Central Bank Communication A 5,019, makes it easier to characterise a transaction as "subject to a collection claim" due to the default of the importer. So if the exporter is able to prove that the unpaid export transaction is "subject to a collection claim" before the deadline to repatriate its proceeds, the Central Bank should not charge it with a breach of the repatriation obligation.

Specifically, the new regulation adopts the following changes:

(i) Increases from $30,000 to $100,000, the annual aggregate maximum amount of export proceeds that can be characterised as subject to a collection claim due to the importer's payment default by merely filling documentary evidence of simple claims (for instance, e-mails) without bringing a court claim;

(ii) Eliminates the maximum limit of three annual export transactions that can be characterised as subject to a collection claim by filing evidence of that sort of simple claim;

(iii) Allows classification as subject to a collection claim for an unpaid export transaction due to a payment default caused by the foreign exchange controls applicable in the importer's country, even if the exporter and the importer are affiliates; and

(iv) Allows classification as subject to a collection claim for an unpaid export transaction when the foreign exchange controls applicable in the importer's country require a prior authorisation for payment and as long as the exporter files documentary evidence to prove that there has been an unavoidable delay in obtaining such authorisation that cannot be attributed to the parties or to the financial entities involved.

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