“2012 – Year of Tribute to Doctor D. Manuel Belgrano”

CENTRAL BANK OF THE ARGENTINE REPUBLIC

COMMUNICATION “A” 5301
03/05/2012

TO THE FINANCIAL INSTITUTIONS:

Ref.: Circular
OPRAC 1 - 669

Financing to the non-financial public sector. Exclusions for State Companies and the Energy Sector.

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We address you to inform you that this Institution adopted the following resolution:

“- Replace points 1.2.1., 1.2.2. and 1.2.3. of Section 1. of the rules on “Financing to the non-financial public sector”, with the following:

“1.2. Exclusions.

1.2.1. State Companies.

The Central Bank of the Argentine Republic may grant to State Companies governed in accordance with Law 20.705, the general treatment provided for persons of the non-financial private sector, for all purposes of the rules applicable in that matter, provided that they comply with the following requirements:

a) Not require to carry out their activity resources from the state budget -national, municipal, provincial, or of the Autonomous City of Buenos Aires- as current transfers, capital contributions -except those corresponding to incorporation as a company- or repayable financial assistance destined to cover expenses of their normal and usual course of business, with the sole exception of: i) those that could have been contemplated in the Budgets corresponding to fiscal years 2001 and 2002, and ii) those destined to the realization of direct real investment.

b) Technical and professional independence of their managerial cadres for the implementation of corporate policies.

c) Market their goods and/or services at market prices.

d) Have fixed assets whose use in the activity is not subject to any conditioning by its shareholders.

e) Not distribute dividends among its shareholders.

f) All the above conditions must have been verified -uninterruptedly- during, at least, the ten years immediately prior to the date of granting of the financial assistance.

1.2.2. Energy sector.

The Central Bank of the Argentine Republic may grant the general treatment provided for persons of the non-financial private sector, for all purposes of the rules applicable in that matter -except the provisions established in the rules on “Credit rating”- to companies of the public sector not included in the provisions of point 1.2.1. and that, furthermore, comply with the following requirements:

a) Their creation has been ordered by national law or decree of the National Executive Power, or their equity represented by shares has been declared as of public utility and subject to expropriation -totally or partially- by national law, having the National State assumed the rights inherent to its capacity as shareholder.

b) Constitute a Corporation subject to the regime of Chapter II, Sections V or VI of the Commercial Companies Law -Law 19.550 and amendments-.

c) Have majority participation of the Non-Financial Public Sector, direct or indirect, and the National State being the majority shareholder with respect to the remaining jurisdictions of said sector, according to the provisions contained in that legal device.

d) Include in its corporate purpose the development of activities of exploitation of hydrocarbon deposits and/or their transport, distribution, commercialization and industrialization; or the generation and/or commercialization of electric energy.

e) Be subject to the internal and external controls of the National Public Sector in the terms of the Financial Administration and Control Systems of the National Public Sector Law -Law 24.156 and amendments-, unless express legal provision to the contrary.

1.2.3. Specific procedure.

For the purposes of obtaining the general treatment provided for companies of the private sector in accordance with the provisions of points 1.2.1. and 1.2.2. as applicable, the companies must:

i) Prior to the first financial assistance they request from financial institutions under this regime, they must petition by note signed by their legal representative and addressed to the Central Bank of the Argentine Republic, the general treatment provided for companies of the private sector. In said note and as a sworn declaration, it shall be stated that they comply with the conditions set forth above and a commitment to provide the information requested for that purpose, as well as to reliably notify the Central Bank of the Argentine Republic and the lending financial institution of any modification of the circumstances taken into account for their assimilation to private sector companies.

ii) In case the Central Bank of the Argentine Republic grants the general treatment provided for companies of the private sector, the company, when requesting any type of financing from a financial institution, must present before it an authentic copy of the resolution granting it, together with a sworn declaration signed by its legal representative stating that it continues to give the

compliance with the conditions taken into account to grant it said treatment.

iii) The sworn declarations referred to in paragraphs i) and ii) above, must be accompanied by certification of public accountant with signature legalized by the Professional Council of Economic Sciences competent in which that professional rules on the compliance with the requirements established in subparagraphs a), d) and e) of point 1.2.1. during the term referred to in subparagraph f) of that point or the requirements of point 1.2.2., as applicable.

It shall be the responsibility of the lending financial entities to verify, prior to the granting of each credit assistance, the required intervention of this Institution, the maintenance at all times of the requirements established for the purposes of the treatment set forth above. In the case of State Companies, the existence of the corresponding authorization must also be verified pursuant to the provisions of Article 25 of Law 25.917, granted by the competent authority in that matter.

When a company ceases to observe the conditions taken into account to grant the general treatment provided for private sector companies, the provisions applicable to the non-financial public sector shall be applied to the new financings granted to it, as from the moment such circumstance is verified.

Consequently, the companies that receive the aforementioned treatment shall be exempted -for all purposes- from the application of the provisions regarding financial assistance to holders of the non-financial public sector.

The Central Bank of the Argentine Republic may dispense with the procedure provided herein when compliance with the requirements established in points 1.2.1. and 1.2.2. arises from the provisions of a national law or decree of the National Executive Branch.”

On the other hand, we send you the pages that, in replacement of those previously provided, should be incorporated into the referenced regulations. Likewise, it is recalled that on the website of this Institution www.bcra.gov.ar, by accessing “regulations” (“ordered texts”), the modifications made will be found with texts highlighted in special characters (strikethrough and bold).

We greet you attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Matías A. Gutiérrez Girault
Issuance Manager of Regulations
Darío C. Stefanelli
Principal Manager of Issuance and
Regulatory Inquiries

ANNEX

FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR B.C.R.A.
Section 1. Non-financial public sector.

1.1. Concept.

The non-financial public sector comprises the National Government and the provincial and municipal governments and the Autonomous City of Buenos Aires, including the central administration, ministries, secretariats and their decentralized and autonomous agencies, and other entities controlled by them.

It also comprises trusts and fiduciary funds whose final beneficiary or trustee, determined by the respective contracts or provisions governing them, belongs to the non-financial public sector, including the remaining trusts or fiduciary funds in which the works being financed have said sector as their final recipient.

1.2. Exclusions.

1.2.1. State Companies.

The Central Bank of the Argentine Republic may grant to State Companies governed in accordance with Law 20.705 the general treatment provided for persons of the non-financial private sector, for all purposes of the regulations applicable in that matter, provided they comply with the following requirements:

a) Not require to carry out their activity resources from the state budget -national, municipal, provincial, or of the Autonomous City of Buenos Aires- as current transfers, capital contributions -except those corresponding to incorporation as a company- or repayable financial assistance destined to cover expenses of their normal and habitual operations, with the sole exception of: i) those that could have been contemplated in the Budgets corresponding to fiscal years 2001 and 2002, and ii) those destined to the realization of direct real investment.

b) Technical and professional independence of their managerial staff for the implementation of corporate policies.

c) Market their goods and/or services at market prices.

d) Have fixed assets whose use in the activity is not subject to any condition by its shareholders.

e) Not distribute dividends among its shareholders.

f) All the above conditions must have been verified -uninterruptedly- during at least the ten years immediately preceding the date of granting of the financial assistance.

Version: 5th. COMMUNICATION “A” 5301
Effective:
3/05/12
Page 1

FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR B.C.R.A.
Section 1. Non-financial public sector.

1.2.2. Energy sector.

The Central Bank of the Argentine Republic may grant the general treatment provided for persons of the non-financial private sector, for all purposes of the regulations applicable in that matter -except the provisions established in the regulations on “Credit Rating”- to companies of the public sector not included in the provisions of point 1.2.1. and that, in addition, comply with the following requirements:

a) Their creation has been ordered by national law or decree of the National Executive Branch, or their equity represented by shares has been declared of public utility and subject to expropriation -totally or partially- by national law, the National State having assumed the rights inherent to its capacity as shareholder.

b) Constitute a Corporation subject to the regime of Chapter II, Sections V or VI of the Commercial Companies Law -Law 19.550 and amendments-.

c) Have majority participation of the Non-Financial Public Sector, direct or indirect, and the National State being the majority shareholder with respect to the remaining jurisdictions of said sector, according to the provisions contained in that legal provision.

d) Include in its corporate purpose the development of activities of exploitation of hydrocarbon deposits and/or their transport, distribution, commercialization and industrialization; or the generation and/or commercialization of electric energy.

e) Be subject to the internal and external controls of the National Public Sector under the terms of the Law on Financial Administration and Control Systems of the National Public Sector -Law 24.156 and amendments-, except where expressly provided otherwise by law.

1.2.3. Specific procedure.

For the purposes of obtaining the general treatment provided for private sector companies in accordance with the provisions of points 1.2.1. and 1.2.2., as applicable, companies must:

i) Prior to the first financial assistance they request from financial institutions under this regime, they must petition, by means of a note signed by their legal representative and addressed to the Central Bank of the Argentine Republic, for the general treatment provided for private sector companies. In said note, and as a sworn statement, it shall be recorded that the conditions set forth above are being met and a commitment to provide the information requested for that purpose, as well as to reliably notify the Central Bank of the Argentine Republic and the lending financial institution of any modification of the circumstances taken into account for its assimilation to private sector companies.

ii) If the Central Bank of the Argentine Republic grants the general treatment provided for private sector companies, the company, when requesting any type of financing from a financial institution, must present to it an authentic copy of the resolution granting such treatment, together with a sworn statement signed by its legal representative stating that it continues to comply with the conditions taken into account to grant it said treatment.

Version: 5th. COMMUNICATION “A” 5301
Effective:
3/05/12
Page 2

Section 1. Non-financial public sector.

iii) The sworn statements referred to in subsections i) and ii) above must be accompanied by a certification from a public accountant with a signature legalized by the competent Professional Council of Economic Sciences, in which that professional states an opinion on compliance with the requirements established in subsections a), d) and e) of point 1.2.1. during the period referred to in subsection f) of that point or the requirements of point 1.2.2., as applicable.

It shall be the responsibility of the lending financial institutions to verify, prior to granting each credit assistance, the required intervention of this Institution and the maintenance at all times of the requirements established for the purposes of the treatment set forth above. In the case of State Companies, the existence of the corresponding authorization must also be verified pursuant to the provisions of article 25 of Law 25.917, granted by the competent authority in that matter.

When a company ceases to observe the conditions taken into account to grant the general treatment provided for private sector companies, the provisions applicable to the non-financial public sector shall be applied to the new financings granted to it, as from the moment that circumstance is verified.

Consequently, companies receiving the aforementioned treatment shall be exempt -for all purposes- from the application of the provisions regarding financial assistance to holders of the non-financial public sector.

The Central Bank of the Argentine Republic may exempt from the procedure provided herein when compliance with the requirements established in points 1.2.1. and 1.2.2. arises from the provisions of a national law or decree of the National Executive Power.

Version: 3rd. COMMUNICATION “A” 5301
Effective:
3/05/12
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B.C.R.A.
ORIGIN OF THE PROVISIONS INCLUDED IN THE CONSOLIDATED TEXT OF THE RULES ON “FINANCING TO THE NON-FINANCIAL PUBLIC SECTOR”

CENTRAL BANK OF THE ARGENTINE REPUBLIC

CONSOLIDATED TEXT			SOURCE RULE				Observations
Section	Point	Paragraph	Com.	Annex	Point	Paragraph
1.	1.1.		“A” 3054	sole	1.1.		According to Com. “A” 4798, 4838 (point 12.) and 4937.
	1.2.		“A” 4527				According to Com. “A” 4581, “C” 51182, “B” 9745, “A” 5154, 5243 and 5301.
2.	2.1.		“A” 3054	sole	2.1.		According to Com. “A” 4937, 5062, “B” 9745 and “A” 5154.
	2.2.		“A” 3054	sole	2.2.
3.	3.1.		“A” 3054	sole	3.1.		According to Com. “A” 5067.
	3.2.		“A” 3054	único	3.2.		According to Com. “A” 4838 (point 10.), 4932 (points 1. 3. and 4.), 4937 (points 2 and 3.), 4996 (point 1.), 5015 (annex), 5062, 5069, 5125 and “B” 9745.
4.	4.1.1.		“A” 3054	único			According to Com. “A” 3548 and 3911 - point 9. subsection c)-.
	4.1.1.1.		“A” 3054	único			According to Com. “A” 3911 -point 9., subsection b)-, 4798 and “B” 9745.
	4.1.1.2.		“A” 4798				According to Com. “A” 4947.
	4.1.1.3.		“A” 4798
	4.1.2.		“A” 3054	único			According to Com. “A” 4718 and “B” 9745.
	4.1.3.		“A” 3054	único			According to Com. “A” 3144 and 5062.
5.	5.1.		“A” 4838		1.		According to Com. “A” 4926, 4937, 5062 and “B” 9745.
	5.1.1.		“A” 4838		1.1.		According to Com. “A” 4926, 4937 (point 4.) and “B” 9745.
	5.1.2.		“A” 4838		1.2.		According to Com. “A” 4926, 4937 (point 4.), 5015 and “B” 9745.
	5.1.3.		“A” 4838		1.3.		According to Com. “A” 4926, 4937 (point 4.).
	5.1.4.		“A” 4838		1.4.		According to Com. “A” 4926, 4937 (point 4.) and 5036.
	5.1.5.		“A” 4838		1.6.		According to Com. “A” 4937 (point 4.) and 5062.
	5.1.6.		“A” 4838		6. and 10.		According to Com. “A” 4926, 4937 (point 4.), 4996 (point 1.), 5015 (annex), 5062 and “B” 9745 and normative interpretation.
	5.1.7.		“A” 4838		1.5.		According to Com. “A” 4926, 4937 (point 4.), 5062 and “B” 9745.
	5.1.8.		"A" 4937		4.		According to Com. "B" 9745 and "A" 5062.