During January 2012, the Argentine Central Bank issued several Communications that had an impact on the foreign exchange market in connection with services, income, financial indebtedness and payment of imports.
Through different Communications, the Argentine Central Bank (the "ACB") set amended texts of law concerning services, income, financial indebtedness and payment of imports. The following are the most important novelties introduced into these matters.
Services, Income and Current Transfers (Communication "A" 5264)
A definition of "services" is provided on the basis of the definitions used by the international accounts and international trade. A clarification is made in connection with income in foreign currency received by Argentine residents due to insurance collections from covers hired to non-Argentine residents (in accordance with the current regulation) that are not considered to be international trade of goods. Pursuant to the communication, that income shall be transferred and liquidated in the local foreign exchange market (Mercado Único y Libre de Cambio or MULC) within a 15 (fifteen) business day term from the date of receipt of the payment either abroad or in Argentina. In the event of services granted to non-Argentine residents and charged in foreign exchange, certain concepts may be deducted from the amount to be transferred into the MULC. The deductible concepts are those amounts that are withheld or deducted abroad by international systems of compensation of transactions made in different countries, by which only the net amount compensated during the period is liquidated and offered to the resident company. These international systems shall be of ordinary use worldwide for the liquidation of the compensated concepts. Some requirements are established for donations granted to Argentine residents to be transferred to the MULC. To that end, the receiver of the funds shall be involved in not-for-profit activities (i.e. a religious or educational entity, or a local government). Additionally, the funds shall serve to support the entity's purpose, or the donor shall be an internationally prestigious entity recognized for its activities as donor of charitable, educational and religious high reputation contributions. Furthermore, some other cases are admitted when, in addition to the customer's own awareness, certain formal requirements are also fulfilled. It is stated that the general authorization to access the MULC...