Access of natural persons to the local foreign exchange market for the formation of external assets

"2014 - YEAR OF TRIBUTE TO ADMIRAL GUILLERMO BROWN, ON THE BICENTENNIAL OF THE NAVAL BATTLE OF MONTEVIDEO" COMMUNICATION "A" 5526 27/01/2014 TO FINANCIAL INSTITUTIONS, TO EXCHANGE HOUSES: AGENCIES: OFFICES AND BROKERS:
Ref.: Circular
CAMEX 1 - 722
Access of natural persons to the local foreign exchange market for the formation of external assets.

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We address you in order to inform you that the following has been ordered, effective from 27.1.2014 inclusive:

1. Repeal point II of Communication "A" 5318 of 5.7.2012.
2. Replace point 4 of Communication "A" 5236 of 27.10.2011 with the following:
   "4. Rules for access to the local foreign exchange market for the formation of external assets of residents, freely available.
   Resident natural persons in the country may access the local foreign exchange market for purchases of banknotes made under the concept "purchase for holding foreign banknotes in the country" based on the income from their activity declared to the Administración Federal de Ingresos Públicos and the other quantitative parameters that may be established, within the framework of exchange policy, for their validation for the purposes of this regime. The amount that natural persons may access under this concept will be reflected in the "Programa de Consulta de Operaciones Cambiarias" available on the institutional website of the Administración Federal de Ingresos Públicos."
3. Repeal point 1 of Communication "A" 5487 of 17.10.2013, point 2.1 of the Annex to Communication "A" 5236 of 27.10.2011, and subparagraphs b and c of point 2 of Communication "A" 4308 of 4.3.2005 as replaced by Communication "A" 5314 of 14.06.2012, with the operations mentioned remaining subject to prior conformity as a requirement for access to the local foreign exchange market.
4. Replace point 5 of Communication "A" 5236 with the following:

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5. Other requirements and rules of application for access to the exchange market for the formation of external assets of residents.
5.1. For purchases of foreign currency under the concepts included in this Communication, the operation may only be carried out with debit to a demand account opened in financial institutions in the name of the client, or with transfer via MEP in favor of the intervening entity of the funds from demand accounts of the client opened in a financial institution, or with payment by cheque from the client's own account.
5.2. For the purposes of computing the limits mentioned at the date of carrying out a new operation, for purchases in foreign currencies other than the US dollar, the pesos settled for each operation shall be computed at the reference exchange rate of the banking business day immediately preceding the one on which each operation was carried out.
5.3. The intervening entities must have the client's sworn declaration stating that with the exchange operation to be arranged with the entity, the limits established in the regulations for their operations across all entities authorized to operate in foreign exchange are met, in the cases where applicable.
5.4. Sales of external assets carried out in compliance with the obligation to re-enter funds acquired for a specific destination are exempt from the limit established in article 2 of Resolution No. 365/05 of the Ministry of Economy and Production for the constitution of the deposit established in Decree No. 616/05.
5.5. These rules are independent of those applicable in matters of prevention of money laundering and other illicit activities and the financing of terrorism."
5. Replace the Annex to Communication "A" 5236 with the Annex attached to this communication.
We greet you attentively.
CENTRAL BANK OF THE ARGENTINE REPUBLIC
JORGE LUIS RODRIGUEZ JUAN IGNACIO BASCO

ANNEX

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Index
Foreign Trade and Exchange Rules

1. Exchange rules for access to the local foreign exchange market of residents for the formation of external assets...... 2
2. Purchase of foreign currency for its application to specific destinations in local assets...... 2
3. Purchase of foreign currency for its application to specific destinations...... 4
4. Rules for access to the local foreign exchange market for the formation of external assets of residents, freely available...... 5
5. Other requirements and rules of application for access to the exchange market for the formation of external assets of residents...... 5
   B.C.R.A.
   Annex to
   Com. "A"
   5526

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Foreign Trade and Exchange Rules

1. Exchange rules for access to the local foreign exchange market of residents for the formation of external assets
   Resident natural and legal persons, patrimonies and other universalities constituted in the country and local governments may access the local foreign exchange market to form external assets when the conditions established for each case in this rule are met.
   Cases that do not fall within the established conditions must have the prior conformity of the Central Bank before the entity grants the client access to the local foreign exchange market.
2. Purchase of foreign currency for its application to specific destinations in local assets
   Residents shall have access to the local foreign exchange market for the purchase of external assets for their application to a specific destination in local assets, when it involves the following operations:
   2.1. Purchases of foreign currency banknotes made by local governments without amount limit for their deposit in local accounts of financial institutions within the framework of the conditions established for disbursements of loans granted by International Organizations. The funds so constituted, plus their interest net of account expenses, must be settled in the local foreign exchange market at the time of use.
   2.2. Purchases of foreign currency banknotes to deposit in local bank accounts under the concept "Purchases of foreign currency for allocation to investment projects" made simultaneously with the entry of funds for the financings provided in points 7.1 and 7.3 of Communication "A" 5265, when the conditions established therein are met.
   2.3. Purchases of foreign currency banknotes made without amount limit by public companies, companies that even being constituted as subjects of private law are under the control of the National State, and trusts constituted with funds contributed by the national public sector, to the extent that:
   2.3.1. The funds used for the purchase of foreign currency correspond to funds contributed by the National Treasury.
   2.3.2. The funds acquired are deposited on the date of access to the local foreign exchange market, in local accounts in foreign currency opened in the entity handling the operation.

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2.3.3. The local accounts constituted with these funds are destined to guarantee letters of credit or other types of guarantees issued by the aforementioned entities, to guarantee the payment of Argentine imports of goods and services.
2.3.4. The funds released from these accounts must be settled by the local foreign exchange market on the date of their withdrawal.
2.3.5. The entity through which the exchange operation is handled shall be responsible for monitoring and eventual reporting to the Central Bank in case of non-compliance with the provisions of this rule.
2.4. Purchases of foreign currency banknotes to deposit in local bank accounts made by non-financial private sector companies to the extent that the following conditions are met:
2.4.1. The company records overdue and unpaid debt abroad in respect of securities issued abroad, syndicated financial loans abroad, financial loans granted by foreign banks, and other debts direct or guaranteed by official foreign credit agencies.
2.4.2. At the date of access to the local foreign exchange market, the company has made an offer to refinance its debt to foreign creditors.
2.4.3. The amounts acquired do not exceed the amount of principal and interest services of overdue debt according to the original schedule, without computing accelerations of maturities due to default clauses, nor 75% of the cash payments offered in the refinancing offer.
2.4.4. The funds deposited in local accounts plus their interest, net of expenses and commissions affecting the account, must be re-entered through the local foreign exchange market on the date of cash payment of the offer in the case of acceptance thereof, or within the following 10 business days in case of rejection.
2.4.5. The purchases shall be channeled by the banking entity receiving the deposit, which shall be responsible for monitoring these operations and eventual reporting to the Central Bank in case of non-compliance with the provisions of this rule.
2.5. Purchases of foreign currency banknotes made by mutual investment funds to pay in the country redemptions of units of clients not covered by the provisions of point 1.b. of Communication "A" 4377 and to the extent that they have entered foreign currency for such purpose for the same amount.
2.6. Purchases of foreign currency banknotes made by stock exchange agents resident in the country and to the extent that the funds are deposited in their name in local accounts in the same entity, up to the amount of foreign currency income arranged on the same date in respect of repatriations of portfolio investments, when the funds resulting from these operations are applied within the following 24 business hours from the exchange settlement date, to cancel purchases of securities issued by non-residents with quotation in the country and abroad, made to clients not covered by the provisions of point 1.b. of Communication "A" 4377 in operations arranged with a prior period no greater than 72 business hours and payable in foreign currency in the country.

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This exception shall apply to the extent that the funds resulting from the operation remain deposited in local accounts in foreign currency in the name of the seller of the traded securities.
The period for application of the funds to the settlement of securities shall be extended in cases of delays due to causes beyond the buyer of the securities and to the extent that the funds are not used for other destinations, until the causes preventing their application are remedied.
3. Purchase of foreign currency for its application to specific destinations
Companies resident in the country authorized to provide international road freight transport services may access the local foreign exchange market for the purchase of banknotes in foreign currencies of the signatory countries of the "International Land Transport Agreement", to meet expenses that must be paid in cash abroad such as fuel, tolls, fees, services, driver stays, and other minor expenses, to the extent that all of the following conditions are met:
a. The resident company must designate a local financial institution that will be responsible for monitoring these operations.
The local entity designated by the company shall grant access to the local foreign exchange market with the authorization certificate issued by the competent authority that enables the company to provide these services, and the company's sworn declaration with details of the trips and mileage to be traveled abroad per trip and country. The designated entity shall also be responsible for issuing the certifications that may be necessary for the company to access the exchange market through other entities authorized to operate in foreign exchange, for verifying the presentation of documentation on the application of purchases of foreign currency banknotes for the established purposes, for complying with the information regime established for monitoring these operations, and for informing the Central Bank in cases of non-compliance with the provisions of this rule. The designation must be communicated by the company to the Subgerencia de Seguimiento de Regulaciones Cambiarias of the Gerencia Principal de Exterior y Cambios, by note sent through the designated financial entity. The note must be submitted through the Mesa de Entradas of this Central Bank, prior to carrying out the operations. b. The amounts acquired may not exceed the equivalent of US$ 0.60 for each kilometer traveled outside Argentine territory in the currency of each signatory country of the Agreement.
c. Within the ten business days following the close of each calendar month, the transport company must demonstrate to the entity responsible for monitoring, the application of the funds to the payment of the mentioned expenses.
Together with the company's sworn declaration with details of the expenses paid, the entity must have a copy of the customs documentation of re-entry into the country of the freight transport with the trips made (International Road Freight Manifest) and with the external auditor certification expressly stating that the vouchers of the expenses paid abroad for the trips declared for access to the local foreign exchange market have been reviewed, and that they prove that the funds acquired were applied to the authorized specific destination. Funds not applied in the calendar month may be used in the demonstration of the calendar month immediately following the one of access to the local foreign exchange market, to the extent that they do not exceed 20% of the total acquired in the month. Unapplied amounts exceeding this percentage must be re-entered through the local foreign exchange market within the first ten business days of each month. d. Exchange purchases made under the provisions herein must be processed under the concept code "Purchases of foreign banknotes to be applied to the payment of expenses abroad of land transport means." e. With the demonstration of the application of funds to expenses abroad, two technical tickets must be made, one for income under "Application to land transport expenses of banknote purchases made" and another for expenses under "Expenses abroad of ships, aircraft and land transport means" (code 616).
4. Rules for access to the local foreign exchange market for the formation of external assets of residents, freely available.
Resident natural persons in the country may access the local foreign exchange market for purchases of banknotes made under the concept "purchase for holding foreign banknotes in the country" based on the income from their activity declared to the Administración Federal de Ingresos Públicos and the other quantitative parameters that may be established, within the framework of exchange policy, for their validation for the purposes of this regime. The amount that natural persons may access under this concept will be reflected in the "Programa de Consulta de Operaciones Cambiarias" available on the institutional website of the Administración Federal de Ingresos Públicos."
5. Other requirements and rules of application for access to the exchange market for the formation of external assets of residents.
5.1. For purchases of foreign currency banknotes and foreign exchange under the concepts included in this Communication, the operation may only be carried out with debit to a demand account opened in financial institutions in the name of the client, or with transfer via MEP in favor of the intervening entity of the funds from demand accounts of the client opened in a financial institution, or with payment by cheque from the client's own account.
5.2. For the purposes of computing the limits mentioned at the date of carrying out a new operation, for purchases in foreign currencies other than the US dollar, the pesos settled for each operation shall be computed at the reference exchange rate of the banking business day immediately preceding the one on which each operation was carried out.

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5.3. The intervening entities must have the client's sworn declaration stating that with the exchange operation to be arranged with the entity, the limits established in the regulations for their operations across all entities authorized to operate in foreign exchange are met, in the cases where applicable.
5.4. Sales of external assets carried out in compliance with the obligation to re-enter funds acquired for a specific destination are exempt from the limit established in article 2 of Resolution No. 365/05 of the Ministry of Economy and Production for the constitution of the deposit established in Decree No. 616/05.
5.5. These rules are independent of those applicable in matters of prevention of money laundering and other illicit activities and the financing of terrorism.