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Application of proceeds to projects under the Investment Promotion Regime for Exports

On April 8, 2021, the Central Bank of the Republic of Argentina (the “Central Bank”), through Communiqué “A” 7259 (the “Communiqué 7259“), provides  that proceeds of exports of goods originated from projects under the “Investment Promotion Regime for Exports” created by the Decree of Need and Urgency No. 234/2021 (the “Regime”), may be applied, in the terms set by its enforcement authorities (Ministerio de Economía) and the Ministry of Productive Development (Ministerio de Desarrollo Productivo), to the following transactions:

(i) payment of principal and interests of debts arising from import of goods and services as from the maturity date;

(ii) payment of principal and interests of to foreign financial indebtedness as from the maturity date;

(iii) payment of profits and dividends corresponding to closed and audited financial statements; and

(iv) repatriation of direct investments by non-residents in companies that are not controlling shareholders of local financial entities.

At the same time, Communiqué 7259 sets forth that in case of exports proceeds that being eligible to be applied to the admitted transactions detailed in (i) to (iv) above, which are not simultaneously applied to such transactions, may remain deposited until their application in foreign correspondent accounts of local financial entities and/or in local accounts in foreign currency of local financial entities. In the event that the application had not taken place at the time of expiration of the deadline for the settlement of exports proceeds, the exporter may request to the monitoring financial entity the extension of the term until the date on which it estimates the application will take place.

According to Communiqué 7259, such applications shall be admitted to the extent that all the following conditions are met:

(i) the amount applied does not exceed 20% of the amount in foreign currency corresponding to the permit of export whose receivables are applied;

(ii) the amount does not exceed 25% of the gross amount of foreign currency settled through the foreign exchange market (the “FX market”) for financing the project that generated the applied exports. This gross amount will be calculated based on the foreign currency settled through the FX market as of April 7, 2021 as (a) foreign financial debts; and (b) foreign direct investments. The settlements through the FX market can only be computed after a year has elapsed since such settlement was carried out; and

(iii) exporters that choose this mechanism must appoint a local financial entity to monitoring the project included in the Regime.

The Communiqué 7259 also establishes that, in the case of operations included in the Regime that meet the provisions set forth in point 1 of Communiqué “A” 7123, as amended from time to time, exporters may use the mechanisms set forth in such communiqué in addition to those set forth in Communiqué 7259.

Access the full text of the Communiqué 7259 (in Spanish) here.

This publication does not constitute a legal opinion on specific matters. If necessary, specialized legal advice should be sought.

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