On December 9, 2021, the Central Bank of Argentina (the “BCRA” for its Spanish acronym) issued Communiqué “A” 7416 (the “Communiqué 7416“), whereby it extended the term of restrictions on the access to the foreign exchange market for certain financial indebtedness. In this regard, Communiqué 7416 provided the following:
Obligation to submit a refinancing plan
Companies from the non-financial private sector and financial entities having foreign financial indebtedness with a creditor that is not a counterparty related to the debtor and foreign currency denominated debt securities with public registration in the country, in each case with principal payments scheduled between January 1, 2022 and June 30, 2022, must submit to the BCRA a refinancing plan in accordance with the following criteria:
(a) the net amount for which the debtor may access the foreign exchange market in the original terms shall not exceed the 40% of the principal amount maturing in the above-described period. In case of exceeding this amount, there is a “Certification of increase of exports of goods in 2021” issued within the framework of the provisions related to the access for such concept included in Communiqué “A” 7308; and
(b) the remaining 60% of the principal amount due during the referred period must be refinanced by the original creditors through the extension of principal payments, giving the new indebtedness an average life of not less than 2 years.
In the case of principal maturities scheduled between January 1, 2022 and January 26, 2022, the refinancing plan must be submitted to the BCRA by December 27, 2021. In all other cases, the refinancing plan must be submitted at least 30 calendar days prior to the maturity of the principal to be refinanced.
Exceptions
According to Communiqué 7416, the above will not apply to (i) indebtedness contracted with or guaranteed by international organizations, their associated agencies or export credit agencies; (ii) indebtedness originated as from January 1, 2020 and whose proceeds have been deposited and settled in the foreign exchange market; (iii) indebtedness originated on or after January 1, 2020 that constitute refinancing of principal maturities subsequent to that date, to the extent that the refinancing has allowed reaching the parameters above described in points (a) and (b); (iv) the remaining portion of maturities already refinanced, to the extent that the refinancing has allowed reaching the parameters above described in points (a) and (b); and (v) that principal payments for an amount not exceeding the equivalent of US$2,000,000 per calendar month.
Cancellation of principal of indebtedness abroad with related counterparties
Communiqué 7416 extended until June 30, 2022 the requirement to obtain prior approval from the BCRA to access the foreign exchange market for the cancellation of principal services of foreign financial indebtedness when the creditor is a related counterparty of the debtor.
Such requirement will not be applicable for (i) transactions of local financial entities; and (ii) when the client has a “Certification of increase of exports of goods in 2021”, within the framework of the provisions related to the access for such concept set forth in Communiqué “A” 7308.
It is worth mentioning that the effective date for requesting the BCRA’s prior approval for the cancellation of financial indebtedness abroad with related counterparties operated until December 31, 2021 and previously until June 30, 2021.
Certification of increase in exports of goods in 2022
As from January 3, 2022, certifications issued for settlements of new financial indebtedness abroad for the cancellation of debts may be used to access the foreign exchange market for:
(a) Payment of imports of goods without the prior conformity of the BCRA.
(b) Payment of services to related counterparties without the prior approval of the BCRA, to the extent that it is a payment from the maturity of an obligation for a service rendered at least 180 days prior to the access or derived from a contract signed with a similar anticipation.
In all cases, compliance with the remaining general and specific requirements applicable to the transaction pursuant to the exchange regulations in force must be evidenced.
This publication does not constitute a legal opinion on specific matters. If necessary, specialized legal advice should be sought.
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