2012 – Year of Tribute to Doctor D. Manuel Belgrano

COMMUNICATION “A” 5318
05/07/2012

TO FINANCIAL INSTITUTIONS,
TO EXCHANGE HOUSES, AGENCIES, OFFICES AND BROKERS:

Ref.: Circular
CAMEX 1 - 699

Single and Free Exchange Market. Rules on the formation of external assets by residents.

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We address you in order to inform you that the following has been provided with effect from 6.7.2012 inclusive:

I. Amend point 3 of the Annex to Communication “A” 5264 as amended by Communication “A” 5295, replacing it with the following:

“3. Rules on outflows.

3.1. Residents of the country may access the local exchange market to make transfers abroad for the payment of services corresponding to services provided by non-residents under the conditions agreed between the parties, in accordance with applicable legal regulations and with the submission of documentation supporting the genuineness of the transaction as to the concept, provision of the service by the non-resident to the resident, and amount to be remitted abroad.

If the nature of the service to be paid does not have a direct relationship with the activity carried out by the client, the institution authorized to operate in foreign exchange must have at least an authenticated copy of the contracts giving rise to the obligation, and an external auditor's opinion on the existence of the obligation abroad. In the opinion, the internal documentation issued in the company must be specified, the review of which allows the external auditor to certify the effective provision of the service by the non-resident to the resident company, and therefore the existence of the debt abroad. The fulfillment of the registration requirements applicable at the national level by the nature of the service must also be recorded.

Regardless of the responsibility assumed by the client requesting to carry out the exchange transaction, the intervening institution is responsible for requesting the documentation it considers appropriate to verify the data declared by the client, that the registrations of contracts in force at the national level have been complied with, and that the beneficiary of the transfer is the one corresponding according to the declared concept, documentation submitted by the client and applicable rule.

3.2. Resident natural persons for their trips and dependents, and private-sector legal persons constituted in the country for the trips of their directors and em-

ployees in an employment relationship, may also access the local exchange market for the purchase of foreign currency banknotes and traveler's checks, under the concept of “tourism and travel” for amounts that are reasonable based on the places of destination and days of stay, and to the extent that they comply with the following requi- rements:

Submission of a sworn statement by the client regarding the trip to be made and days of stay abroad, in which the client undertakes to re-enter the funds within the following 5 business days in the event of suspension of the trip. Postponements of the date by more than 10 business days shall be considered as suspensions of the trip for which access to the local exchange market was requested.

The tax validation of the funds to be used in the purchase of foreign currency is available, in cases where such requirement is applicable.

3.3. Validation in the “Programa de Consulta de Operaciones Cambiarias” implemented by AFIP shall be a requirement for access to the exchange market for purchases of foreign currency by the private sector under the concept of tourism and travel. Validation shall not be a requirement when the exchange sale transaction corresponds to:

a) Transfers abroad corresponding to the payment of consumption made with the use of credit cards and withdrawals made from ATMs abroad with debit to local accounts.

b) Sales to tourism and travel operators registered as such with AFIP.

c) Sales to natural persons covered by point 2.c.ii of Communication “A” 4834, when they do not exceed the equivalent of US$ 1000 per calendar month and client.

3.4. Access to the local exchange market for the payment of: Other information and computer services, Professional and technical business services, Royalties, Patents and Trademarks, Bonuses for player loans, Copyrights, Personal, cultural and recreational services, Payment of commercial guarantees for exports of goods and services, Commercial commissions, Exploitation rights for foreign film, video and audio, Services for technology transfers under Law 22426 (except patents and trademarks), shall be subject to the conformity of the Central Bank when the beneficiary is a natural or legal person related to the local debtor directly or indirectly according to the definitions of related entities established in Communication “C” 40.209; or is a natural or legal person residing or constituted or domiciled in domains, jurisdictions, territories or associated States included in the list of Decree No. 1344/98 Regulating the Income Tax Law No. 20.626 and amendments; or when payment abroad is to an account in these jurisdictions.

In these cases, prior conformity of the Central Bank shall not apply for contracts that do not generate in the calendar year, at the level of the exchange market concept and debtor, payments and/or new debts exceeding the equivalent of one hundred thousand United States dollars (US$ 100,000).

Regardless of the values of individual contracts, the prior conformity requirement is necessary when the payments accrued in the year for the concept covered in transactions included in the prior conformity exceed the amount set forth above. The same criterion applies in the case of payments in the current year that exceed the indicated amount, whatever the year of accrual. If at the time of accessing the foreign exchange market, with the transaction to be processed, the amount

is not exceeded in the year, the transaction may be processed without the need for prior conformity.

In all cases of access to the local foreign exchange market for the aforementioned concepts, the mandatory registrations of contracts that are in force at the national level at the date of access must be complied with beforehand.

3.5. To process transfers abroad for the payment of reinsurance premiums abroad, the certification from the Superintendence of Insurance of the Nation regarding the concept and amount to be transferred must be submitted. In these cases, transfers abroad must be made in the name of the beneficiary abroad authorized by the Superintendence of Insurance of the Nation.

3.6. Sales of foreign currency for tourism and travel to non-residents may be processed without the prior conformity of the Central Bank when all of the following conditions are met: a) the prior entry of foreign currency through the local foreign exchange market during the non-resident's stay in the country is demonstrated for an amount not less than the amount to be acquired, with the presentation of the original exchange ticket by which the foreign currency was entered, which will be annotated by the entity for the amount transacted by the client, and b) the equivalent of five thousand United States dollars (US$ 5000) per client and stay period in the country is not exceeded; and for the sale made to the non-resident with the application of funds collected in cash in local currency for the refund of the Value Added Tax.

A copy of the documentation required by the entity to verify the classification of the transaction must be kept on file at the entity and available to the Central Bank.

3.7. Access to the local foreign exchange market is permitted for the payment of interest corresponding to unpaid debts or debts that are canceled simultaneously with the payment of interest, to the extent that the foreign exchange regulations permit access to the local foreign exchange market for the cancellation of the capital services of that debt and all the general conditions established for processing such capital payments are met.

Access to the local foreign exchange market for the payment of interest services is for the unpaid amounts that have accrued as of the date of the foreign exchange agreement for the sale of foreign currency that originates said indebtedness abroad, or as of the effective date of disbursement of the funds, if they were credited to correspondent accounts of entities authorized for their settlement in the local foreign exchange market, within 48 business hours of the disbursement date.

The foreign exchange agreement for the purchase of foreign currency may be made no more than five (5) business days prior to the due date of each interest installment computed for accrued periods, or for the accrued amount, at any time during the current interest period.

In all cases, where applicable, the submission of the declaration of external debt of the private sector (Communication “A” 3602 and complementary) that gives rise to the payment of interest must be verified, with the validation of the data reported by the aforementioned obligation and the survey of direct investments established by Communication “A” 4237, in the case that the creditor abroad belongs to the same economic group.

In the case of payments for zero-coupon bonds, the difference between the placement price of the bond and the nominal value paid at maturity must be recorded as payment of interest.

As part of the verification of the genuineness of the transaction, the intervening entity must evaluate the reasonableness of the interest rate applied, and in case of doubt, carry out the consultation with the Central Bank prior to processing the transaction.

3.8. Entities authorized to operate in foreign exchange may process payments abroad of profits and dividends to non-resident shareholders and holders of ADRs and BDRs, corresponding to closed balance sheets that are certified by external auditors with the formalities applicable to the certification of the annual balance sheet.

In all cases, where applicable, the submission of the declaration of external debt of the private sector (Communication “A” 3602 and complementary) that gives rise to the payment of profits and dividends must be verified, with the validation of the data reported by the aforementioned obligation and the survey of direct investments established by Communication “A” 4237.

In these cases, the date of approval of the distribution of dividends by the Shareholders' Meeting or equivalent body according to the corporate type must be considered as the date of origin of the debt for the purposes of its declaration where applicable.

3.9. Access to the local foreign exchange market for the payment of “Rent or leasing of real estate located in the country owned by non-residents”, and “Other income paid abroad” will be subject to the conformity of the Central Bank when the beneficiary is a natural or legal person related to the local debtor directly or indirectly according to the definitions of related entities established in Communication “C” 40.209, or is a natural or legal person who resides or is constituted or domiciled in domains, jurisdictions, territories or associated States that are included within the list of Decree No. 1344/98 Regulatory of the Income Tax Law No. 20.626 and amendments, or when the payment abroad is to an account in these jurisdictions.

In these cases, prior conformity shall not apply to contracts that do not generate, in the calendar year, at the level of the foreign exchange market concept and debtor, payments and/or debts exceeding the equivalent of one hundred thousand United States dollars (US$ 100,000).

Regardless of the amounts of the individual contracts, the prior conformity requirement is necessary when the payments accrued in the year for the concept covered by operations included in the prior conformity exceed the amount set forth above. The same criterion applies in the cases of payments in the current year that exceed the indicated amount, whatever the year of accrual. If at the time of accessing the foreign exchange market, the operation to be processed does not exceed the established amount in the year, the operation may be processed without the need for prior conformity.

In all cases, the contracts must be registered in the mandatory national registries that are in force due to the specific nature of the concept, and/or due to the tax implications of these transfers abroad.

3.10. Residents in the country have access to the local foreign exchange market for the transfer abroad of funds for family assistance, retirement and pension payments, study scholarships, payments of judicial judgments or judicially approved out-of-court settlements, payment of fines applied to natural persons for events that occurred abroad. They also have access to the foreign exchange market for the purchase of foreign currency for making donations, when the following conditions are met: a) the recipient thereof is a government entity, international organiza-

tion and/or its related agencies, and/or a foreign institution with a presence in the country and internationally recognized for its charitable works, and b) the purpose thereof is to address natural disasters, health emergencies, or other situations of a hu- manitarian nature of public knowledge. For donations of this type, diplo- matic missions, consular offices and other international representations accredited in the country shall also have access. All other cases remain subject to prior con- formity of the Central Bank.

In all cases, the intervening entity must have the documentation that allows it to support the genuineness of the operation that the client requests to process.

Transfers for family assistance must correspond to transfers ordered as clients of the intervening entity by resident natural persons, or diplomatic personnel accredited in the country, in favor of non-resident natural persons. The reasonableness of the amounts transferred must be evaluated by the intervening entity based on its knowledge of its client and the documentation provided by the client to justify special situations.

3.11. Sales of foreign exchange to residents for services and income must be made with the client's own check or with a debit to the client's demand account at a local financial entity, through any of the current payment method modalities.

3.12. Non-residents have access to the local foreign exchange market for services, income and current transfers in accordance with the specific rules that regulate the access of non-residents.”

II. Suspend the validity of the rules contained in point 4.2. of the annex to Communication “A” 5236.

III. Replace point 3. of Communication “A” 5236, which was replaced by Communication “A” 5315, with the following:

“3. Purchase of foreign currency for its application to specific destinations.

3.1. 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, provided that all of the following conditions are met:

a. The resident company must designate a local financial entity that will be in charge of monitoring these operations.

The local entity designated by the company shall give access to the local foreign exchange market with the proof of authorization issued by the competent authority that enables the company to provide these services, a sworn statement from the company detailing the trips and mileage to be traveled abroad per trip and country, and a copy of the customs documentation that authorizes the departure from the country of the international transport for such trips.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

The designated entity shall also be responsible for issuing the certifications that may be necessary so that the company can access the foreign exchange market through other entities authorized to operate in foreign exchange, for verifying the submission of the documentation on the application of the purchases of banknotes in foreign currency for the established purposes, for complying with the information regime established for the monitoring of these operations, and for reporting to the Central Bank in cases of non-compliance with the provisions of this rule.

The designation must be communicated by the company to the Submanagement of Foreign Exchange Regulations Monitoring of the Principal Management of Foreign Affairs and Exchange, by means of a note submitted through the designated financial entity. The note must be submitted through the Entry Desk of this Central Bank prior to the execution of 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 aforementioned expenses.

Together with the company's sworn statement detailing the expenses paid, the entity must have a copy of the customs documentation for the re-entry into the country of the cargo transport with the trips made (International Road Cargo Manifest) and the external auditor's certification expressly stating that the vouchers for 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 specific authorized purpose. Funds not applied in the calendar month may be used in the demonstration for the calendar month immediately following the month of access to the local foreign exchange market, provided they do not exceed 20% of the total acquired in the month. Amounts not applied that exceed this percentage must be brought into the local foreign exchange market within the first ten business days of each month.

d. Foreign exchange purchases made under the provisions hereof must be processed under the concept code "Purchases of foreign banknotes to be applied to the payment of expenses abroad for means of land transport."

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 for ships, aircraft and means of land transport" (code 616).

3.2. Natural persons may, until 31 October 2012 inclusive, access the local foreign exchange market to purchase foreign currency banknotes for amounts corresponding to mortgage loans that are not short-term, for the purchase of housing and that are pre-agreed as of the date of issuance hereof by local financial institutions, and provided that the funds acquired are applied simultaneously to the payment of the purchase of the housing. These transactions shall be processed under the concept "Purchase of foreign currency banknotes with funds from mortgage loans". The financial institutions granting the loans must complete the information system that will be implemented for the monitoring of these transactions."

IV. Repeal Communication "A" 5261.

We greet you very attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Jorge L. Rodríguez
Principal Manager of
Foreign and Exchange

Juan I. Basco
Deputy General Manager of Operations