New Argentinean President’s Reforms Include Ending Currency Controls, Import Restrictions, Export Taxes
[Editor’s note: This article originally appeared in the Dec. 24, 2015, issue of the Latin America Trade Bulletin, a biweekly publication offering an overview of the important regulatory and other developments affecting trade and customs throughout the region. Click here to subscribe.]
Argentina’s new president, Mauricio Macri, has announced a series of measures to boost the national economy, restore financial markets and increase foreign trade. These actions, which include lifting controls on foreign currency, ending restrictions on imports and removing export taxes, are designed to reverse policies imposed by former president Cristina Fernandez de Kirchner.
Macri’s election marks the end of an era of multiple exchange rates. Instead, the exchange rate will be unified and depend on supply and demand, though it will not float freely and instead will be managed to some extent.
Most of the restrictions on the U.S. dollar no longer exist and Argentina’s currency was recently devalued by around 30 percent. This move should eliminate the gap between the official dollar price and the multiple black and grey market dollar prices and thus do away with the practice of doing business in informal dollars as well. Companies and individuals will be able to buy up to US$2 million per month in foreign currency and there will be no import limits.
Other reforms aimed at restoring trust in Argentina as a market include the elimination of the requirements for foreign investors to maintain a legal banking reserve of about 30 percent and for companies to inform the Domestic Trade Secretariat about their cost structures and profits.
The DJAI import licensing requirement, which had been struck down by the World Trade Organization, expired Dec. 22. However, DJAI licenses that have already been processed will remain valid.
As of Dec. 23, Argentina has implemented a new, faster and more efficient Comprehensive Import Monitoring System (SIMI) to promote competitiveness and facilitate trade while maintaining sufficient controls to manage risks. Under this system, a standard set of information must be submitted through the Federal Administration of Public Revenues (AFIP) website and will be distributed to all agencies involved in the clearance of goods through the Foreign Trade Single Window. Authorities responsible for authorizing the entry of the goods must then respond within ten days. Information submitted through SIMI will be valid for 180 days from the date of approval.
SIMI is available only to large importing companies and firms. It is still unclear how and when the government will amend the customs controls for individuals who wish to import books, clothes or other objects for personal use.
Other new flexibilities include an extension from 120 to 180 days of the period in which customs documents for imports of current assets previously paid must be presented to the authorities, the lifting of the requirement for Central Bank approval for payments for imports that occurred before the SEPAIMPO import payment system entered into force, and the elimination of restrictions on payments for imports that have entered since Dec. 17.
The Macri administration is working to revitalize the agricultural sector, which is a key source of hard currency at a time when foreign reserves are precariously low. Farm exports are expected to total US$1.6 billion in 2015, fully a third of the country’s total exports, and could increase in 2016 based on estimates that crop yields will rise by 30 percent.
To encourage this additional production, the government has eliminated the additional taxes imposed on nearly all farm goods when sold abroad. One exception is soybeans, Argentina’s biggest cash crop, for which export taxes will be lowered from 35 to 30 percent. Additionally, meat exports and products in which specific regions specialize will have their export duties reduced but not eliminated.
The government has also eliminated export taxes on industrial goods classified in chapters 28-40, 54-76 and 78-96 of the Mercosur Common Nomenclature, with some exceptions.
These and other measures that the Macri administration is continuing to bring forward are rolling back policies that have made it difficult to trade with and do business in Argentina. Clearer and more business-friendly rules governing foreign trade activity are beginning to restore confidence in the Argentinean market, which should help boost imports and exports and generate an increase in business and investment opportunities.
As a premier provider of foreign trade compliance services, Sandler & Travis can help companies around the world take advantage of these opportunities in Argentina while complying with the evolving rules and standards that apply. For more information, please contact Roberto Morinigo at 54.11.5984.3955 Ext. 1055.