In the last days of October 2011, the Argentine Government has adopted certain regulatory measures intended to maintain the value of the Peso against the US Dollar and adversely affecting particularly the Hydrocarbons, Mining and Insurance Industry, and repatriation of direct investments.
Hydrocarbons and Mining Industry On past October 26, the Argentine Government reinstated the obligation of hydrocarbon companies (producers of crude oil and its derivatives, natural gas and liquid petroleum gas) and mining companies to sell in the local foreign exchange market the foreign currency proceeds of their exports.
In Argentina, simultaneously with the freeze of bank deposits and the establishment of restrictions on cross border transfers in the 2001 crisis, one of the main measures adopted by the Argentine Government was the reinstatement of the obligation to repatriate export proceeds (which has always been one of the first sources of foreign currency and a tool used to maintain the value of the Peso against the US Dollar).
However, the hydrocarbons and Mining industry were benefited by certain exemptions to such obligation.
Since December 22, 2002, producers of crude oil, natural gas and liquid petroleum gas were no longer required to repatriate 70% of the foreign currency proceeds of their exports of freely disposable crude oil and its derivatives.
Also, since February 27, 2003, any mining company which has qualified for the foreign exchange stability regime during the period March 27, 1991 – December 12, 2001, was exempted from the obligation to repatriate the foreign currency proceeds of exports of mining goods. Since June 17, 2004, mining companies that qualified for the stability regime after June 27, 2004 were also exempted from the obligation to repatriate to Argentina their export proceeds.
As from past October 26, such benefits were lifted by the Argentine Government and therefore, hydrocarbon and mining companies are now obliged to sell in the local foreign exchange market the foreign currency proceeds of their exports.
Insurance Industry Within a 50 day-period counted as from October 27, Argentine insurance companies must transfer to Argentina any investment or cash kept abroad. After such period, insurance companies may not make any investment or keep cash abroad. For that purpose, the insurance companies must submit in a 10-day period an...