Communication A 1397: Foreign Exchange Market Operations and External Payments and Collections

CENTRAL BANK OF THE ARGENTINE REPUBLIC

COMMUNICATION "A" 1397
13/04/89

TO THE ENTITIES AUTHORIZED TO OPERATE IN FOREIGN EXCHANGE AND FOREIGN EXCHANGE BROKERS:

Ref.: Circulars Foreign Exchange Operations and Move- ments of Funds with Abroad CAMEX - 1 -
194. Active operations OPRAC - 1 - 225.
External Collections and Payments COPEX - 1 - 158.
External Operations of the Public Sector SE-
PEX - 1 - 24.

We address you. And through your intermediary to all interested parties, to bring to your knowledge that this Institution adopted, in accordance with the guidelines established by the economic authorities, the following provisions in foreign exchange matters:

I. Scope of the provisions:

1. As of the opening of the foreign exchange market corresponding to 17.4.89, all payments and collections in foreign currency, to and from abroad, for any concept, shall be processed through the Free Exchange Market.

2. In the Free Exchange Market the exchange rate shall be the result of the free play of supply and demand.

II. Other provisions:

1. For merchandise export operations, the provisions on entry and negotiation of foreign currency, endorsement of shipping permits and reporting of failure to enter foreign currency (Form No. 1519) remain in force.

2. Foreign currency from the export of products covered by Law No. 21.453, whose sales were declared to the National Grain Board up to and including today's date, shall be negotiated at the exchange rate that this Bank will daily announce, through the Department of Exchange Operators, in the usual manner. The corresponding foreign currency must be sold to this Bank at the same exchange rate and may be repurchased at that exchange rate to be applied to cancellations of loans in foreign currency (point 1.5. of Circular COPEX - 1 and complementary), entered in due course through the former Official Exchange Market, which are pending cancellation as of the date of this Communication, up to the maximum amount of the loan being amortized. This provided that such cancellations are made within the terms in force at the time of the entry of the loans and with the foreign currency from the export.

3. the operations of public or private sector entities that have

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guarantee of the National, Provincial or Municipal states, shall remain subject to the prior conformity of this Bank, in accordance with the provisions of Circular SEPEX - 1 - 1, communication "A" 320, of 26.5.83 and complementary.

4. Communication "A" 825 of 30.12.85 referring to the compensated exchange regime remains in force.

5. Foreign currency from exports whose maturities occurred prior to the date of this Communication, must be negotiated, the portion corresponding to the former Official Exchange Market, at the exchange rates in force at the time of said maturity, and shall be sold to this Bank at the same exchange rates.

6. Remittances of profits and dividends to foreign investors registered in accordance with Law No. 21.382 and its amendments, may be made through the subscription of External Bonds of the Argentine Republic, at the price of 100% of their nominal value, plus accrued interest in accordance with the provisions of Decree of the National Executive Power No. 1.506 of 18.5.84.

6.1. The intervening entity must have, in order to process the request, an opinion from the company's external auditor, certifying that the obligation with abroad has not been previously cancelled.

6.2. The settlement shall be effected by applying the seller exchange rate of the Free Exchange Market, quoted by the Banco de la Nación Argentina at the close of operations of the business day prior to the presentation by the intervening entity in the Department of Exchange Operations, of Form No. 3688 duly completed.

6.3. The debit to the account shall be made on the business day following the presentation.

6.4. The securities shall be withdrawn at this Bank, Treasury Department, after 15 business days from the debit of the counterpart value in australes in the entity's current account.

7. Communication "A" 1387 of 4.4.89 and any other provision that opposes this one are rendered ineffective.

We greet you very attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Abelardo L. Tejada
Manager of
Foreign Trade
Julio A. Piekarz
Deputy General Manager