Currently, Argentina operates a complex foreign exchange control regime. In an effort to substitute imports with national production, government has issued gradually several restrictions for foreign trades.
For all companies operating within the territory, transfers of funds into and out of the country should be made according to Central Bank regulations and restrictions are imposed on inbound and outbound investments, interest payments and any other amounts payable in foreign currency.
This makes international trades quite difficult to be dealed with by local companies, adding other measures such as requirement for capital reimbursement Central Bank authorization, as do payments for service fees and royalties made to related entities or entities resident in a tax haven.
In January 2015, the World Trade Organization (WTO) declared that the affidavits to import and other trade related measures applied by Argentina were inconsistent with international standards. The conclusion was adopted by the Appellate Body of the multilateral entity in the controversies raised separately by the United States, Japan and the European Union for the implementation by Argentina of the Sworn Advance Import Declarations (DJAI) and other requirements for Trade Related importers (PRC) requirements.
First attempt to eliminate these Declarations was filed by the company IMSA-Kymco, representative in Argentina of the Kymco motorcycle brand which achieved a favorable court’s decisión to import motorcycles and parts without filing the famous Sworn Statements Declarations.
July 2015 was a decisive month for foreign market since agreement was finally reached by the recent WTO court’s decision: Argentine government was obliged to eliminate DJAI (Sworn Advance Import Declarations), and the deadline for compliance was set for 31 December, 2015.
Will this be the end of barriers to imports?
There are various institutional investors awaiting the arrival of the new government which will asume in January 2016 and may bring new foreign trade policies.
By Carlina Cebolla,
Coordinator-General at Riskma Solutions
July 15th, 2015