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Business Process Outsourcing 

(Central Bank of the Argentine Republic)

Release "A" Number 7042 (dated June 11, 2020) - Foreign Exchange – Adaptations  

The BCRA, by the present release, establishes certain flexibilities to the requirements originally established in Release A 7001 and A 7030, related to the access to the exchange market to proceed with foreign payments. 

Main definitions are as follows: 

1. Provisions for SME´s: 

The requirement for MyPimes set forth in point 1. of Release A 7001 is rendered null and now establishes the following:  

To cancel capital and interest for indebtedness abroad, which are pending as of March 19, 2020, an affidavit will be required from the company stating that there are no pending financing in AR Pesos provided in the Release “A” 6937 and supplements, nor will it request them in the following 30 calendar days. Otherwise, prior compliance must be requested from the BCRA to proceed with the payment.  

The financing established by Release A 6937 is mainly aimed at the possibility of covering working capital and a maximum interest rate of 24% per year was established. 

Consequently, the restriction on access to the exchange market for these companies is eliminated, for debt cancellations that were pending as of March 19, 2020. 
Effective date: June 12, 2020. 

2. General provisions:  

The provisions established in Release A 7030 regarding available liquid external assets, allowing a minimum of US$ 100,000. - to be maintained without being used in payments to be made. 

The new updated operating mechanism is detailed below: 

To give access to the exchange market for the operations included in points 3.1. to 3.11. and 4.4.2. of the rules of "Foreign & Exchange markets" the Bank must have prior agreement of the BCRA or receive a sworn statement from the customer stating that at the time of access to the exchange market: 

a) all of its foreign currency holdings in the country are deposited in accounts with financial entities and does not have available liquid external assets for an amount greater or equivalent of US$ 100,000. - 

The regulation considers as “liquid external assets”, among others: holdings of banknotes in foreign currency, gold coins or ingots, demand deposits in foreign financial entities and other investments that allow immediate availability of foreign currency (for example, investments in foreign public securities, funds in investment accounts with investment managers based abroad, crypto assets, funds in accounts of payment service providers, etc.). 

Not to be considered are all liquid external assets available to those funds deposited abroad that could not be used by the client as they are reserve or guarantee funds established by virtue of the requirements established in loan contracts abroad or funds established as guarantee of derivative operations arranged abroad.  

In the event that the client has liquid external assets available for an amount greater than US$ 100,000. -, an affidavit may be accepted recording that such amount is not being exceeded partially or totally, when such assets: 

i. were used during that day to make payments that would have had access to the local exchange market, 

ii. were transferred in favor of the client to a correspondent account of a local entity authorized to operate in foreign exchange, 

iii. They are funds deposited in foreign Bank accounts that originate from collections of exports of goods and / or services or advances, pre-financing or post-financing of exports of goods granted by non-residents, or in the disposal of non-productive non-financial assets for which the period of 5 business days has not elapsed since its reception (see point 2-b of this memorandum), 

iv. They are funds deposited in foreign Bank accounts originated in financial foreign loans and their amount does not exceed the equivalent to pay for capital and interest in the next 120 calendar days. 

The client's sworn statement must expressly state the value of its liquid external assets available at the beginning of the day and the amounts it assigns to each of the applicable situations described in paragraphs i to iv. 

b) commits to settle in the exchange market, within five business days of its availability, those funds received from abroad originated from the collection of loans granted to third parties, the collection of a time deposit or the sale of any type of asset, when the asset had been acquired, the deposit made or the loan granted after May 28, 2020.  

Detail of points 3.1. to 3.11. and 4.4.2. of the "Foreign Exchange" standards reached by these regulations: 

- 3.1. Import payments and other purchases of goods abroad. 

- 3.2. Payments for services provided by non-residents.  

- 3.3. Interest payments on debts for imports of goods and services. 

- 3.4. Profits and dividend payments. 

- 3.5. Capital payments and interest on foreign financial indebtedness.  

- 3.6. Payments of registered debt securities in the country denominated in foreign currency and obligations in foreign currency among residents. 

- 3.7. Payments of indebtedness in foreign currency of residents by trusts established in the country to guarantee service provision. 

- 3.8. Family assistance. 

- 3.9. Purchase of foreign currency by residents to be applied simultaneously to the purchase of real estate with mortgage loans. 

- 3.10. Purchase of foreign currency by other residents - excluding entities - for the creation of foreign assets and derivative operations. 

- 3.11. Other purchases of foreign currency by residents with specific application. 

- 4.4.2. Payment of premiums, warranty constitution and cancellations belonging to interest of hedge contracts of foreign residents’ obligations. 

3. Requirements for imported goods payment: 

Flexibility has been added on the limit set forth by Release A 7030 regarding the permitted amounts of payment access for imported goods, in force until June 30, 2020.  

Advance payments of imports are now allowed to the extent that the amount pending regularization for similar payments made as of September 1, 2019 does not exceed the equivalent of US$ 1,000,000. - (the previous limit allowed was US$ 250,000. -), including the amount for which access to the exchange market is requested.  

Likewise, access to the exchange market is allowed for the payment of imports for inputs for the local production of medicines, insofar as they are deferred payments or of operations that have been shipped as of June 12, 2020 or that, having been shipped on a previous date, would not have arrived in the country before that date.  

4. Transactions with securities: 

The regulation extends the term originally provided by Release A 7001 and A 7030.  

As of June 12, 2020, in the exchange market selling transactions, in addition to the requirements that are applicable in each case, the submission of an affidavit of the client will be required stating that: 

a) on the day access to the exchange market is requested and during the previous 90 calendar days, no sales of securities have been made with settlement in foreign currency or transfers thereof to depository entities abroad. Until July 30, 2020, the affidavit included in this point will be considered to include only the period elapsed, and included, since May 1, 2020. 

b) the commitment of not selling securities with settlement in foreign currency or transfers thereof to depository entities abroad from the moment in which it requires access and for the subsequent 90 calendar days. 

Business Process Outsourcing Department