January 27 2006
On November 22 2005 the Argentine Central Bank issued Communication A/4443, which replaces the regulations on financing to exporters under Communication A/4415 of September 9 2005 (for further details please see "New Regulations on Financing to Exporters").
The amendments are designed to relax some of the requirements provided by the previous regulations in order for local exporters to receive export financings. The amendments include:
Communication A/4443 makes more flexible the two conditions that Communication A/4415 provided in order for a new debt to qualify as an advance or a pre-export financing, and adds two new requirements. If all these conditions are complied with and the new debt is actually paid out of export proceeds, the new debt proceeds can be transferred into Argentina and converted into pesos through the local exchange market without the need to make a mandatory, non-returnable 30% bank deposit, and its repayment will not be subject to a minimum waiting period.
These conditions are now as follows:
The priority for the repayment of advances and pre-export financings outstanding as of September 8 2005 has been maintained.
The repayment of advances and pre-export financings that were converted into pesos through the local exchange market from September 9 2005 must be made out of export proceeds from shipments made within the maximum term established by the Central Bank. The maximum term for such shipments is 90, 180, 365 or 540 days, depending on the goods exported. The local financial entity in charge of the follow-up of the pre-export financing may grant an additional 30-day term for shipments to be made in the case of delays due to facts beyond the exporter's control (eg, riots, problems with domestic transport, lack of ship spaces or climatic disasters). The term begins to run from the date of conversion into pesos of the proceeds of the debt through the local exchange market.
In addition, within 45 calendar days of the date of each shipment, the exporter must either apply the proceeds to cancel the financing partially or completely, or inform the local financial entity in charge of the follow-up of the advance or pre-export financing that the proceeds of the shipment will be applied to cancel the debt. If this information is not timely provided, the exporter shall be deemed not to have made the corresponding shipment until it complies with the information requirement.
Advances and pre-export financings may be repaid out of export proceeds from shipments made once the maximum applicable terms have elapsed. Nevertheless, non-compliance with the maximum terms for shipments has consequences regarding the possibility of the exporter to transfer into Argentina and convert new advances and pre-export financings into pesos.
The repayment of advances and pre-export financings not made out of export proceeds is subject to the regulations applicable to the repayment of financial loans (including minimum waiting period and mandatory 30% deposit), and also has consequences regarding the exporter's ability to transfer into Argentina and convert into pesos new advances and pre-export financings.
Communication A/4443 includes a specific provision for the pre-export financing credit lines granted by residents of foreign countries which comply with the following requirements:
If these requirements are met, then as long as the export proceeds credited in the collection account correspond to shipments made within the maximum terms provided in the regulations, the maximum shipment period will be considered to be complied with. Further, the transfer of the export proceeds credited in the collection account into Argentina and their conversion into pesos through the local exchange market will be deemed as a new disbursement under the credit-line financing and the maximum period to make shipments to be applied to the financing will start running again as from that date, enabling the rollover of the previously disbursed advances.
For further information on this topic please contact Gabriel G Matarasso or Cecilia Reynolds at Marval, O'Farrell & Mairal by telephone (+54 11 4310 0100) or by fax (+ 54 11 4310 0200) or by email (firstname.lastname@example.org or email@example.com). The Marval, O'Farrell & Mairal website can be accessed at www.marval.com.ar.
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Gabriel G Matarasso