The Argentine Central Bank established new requirements applicable to loans with foreign currency disbursements and to payments of loans with foreign currency, when such transactions are granted by local financial entities.
Through Communication "A" 5362, effective as of October 18, 2012, the Argentine Central Bank stated that foreign currency loan disbursements granted by local financial institutions are subject to the commitment of the customer to transfer the proceeds into the local foreign exchange market (the "FX Market"). Such transfer shall be made through the intervening financial institution granting the loan and on the disbursement date.
The commitment to transfer the proceeds into the FX Market is not applicable when the financing is granted through the subscription of a bond, as long as such proceeds of such bond are subject to the obligation to be transferred through the FX market.
In addition, Communication "A" 5362 provides that the collection of credits granted to Argentine residents in foreign currency by local financial institutions must be made locally, except for:
- pre-financing and financing of exports cancelled abroad through direct application of export collections;
- securities services issued by local residents payable abroad; and
- services for participation in syndicated loans when the agreements provide that the debtor shall pay abroad.
Finally, Communication "A" 5362 establishes that when the collection of the local loan is made in a currency different from the denomination of the debt, the intervening financial institution must issue an exchange ticket in the name of the client.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.