The Free Foreign Exchange Market is set out in Executive Order 260/02, Section 1, as amended by Law 27,444, Section 132.
Section 2 of such executive order provides that foreign exchange transactions are to be conducted at a freely agreed exchange rate, following the requirements and regulations of the BCRA.
Also, the BCRA—under Section 29 of its Charter—is empowered to adopt foreign exchange regulations according to the laws in force, and to oversee compliance. In turn, Executive Order 609/19, as amended by Executive Order 91/19, provides that foreign exchange proceeds from exports of goods and services must be transferred to Argentina’s financial system or exchanged in the foreign exchange market under the terms and conditions that the BCRA may establish.
The BCRA is also vested with powers to establish whether access to the foreign exchange market for transfers abroad and purchases of foreign currency and precious metal coins needs to be authorized in advance. The BCRA is empowered to lay down regulations to prevent practices and transactions intended to circumvent those provisions through sovereign bonds or other instruments.
At present, foreign exchange regulations are compiled in the consolidated text on Foreign Trade and Exchange, as supplemented.
Key points of these regulations:
- – Transactions must be made through an institution licensed to trade in the foreign exchange market. Such institution will request any documents necessary to ensure that the transaction involved is genuine and agrees with the stated type of transaction.
- – An exchange ticket shall be issued for every purchase or sale of foreign currency, as appropriate, which is to be taken as an affidavit.
- – Any breach will be punished as provided for in the Foreign Exchange Criminal Regime.
- – Any proceeds from exports of goods and services, and from the sale of non-produced non-financial assets must be settled in the forex market within a certain timeframe. For financial debts, settlement is a pre-requisite to access the forex market to repay principal and interest.
- – Exports of professional, technical or similar services by natural persons are exempt from the settlement requirement for up to USD36,000 annually (thirty-six thousand dollars).
- – Residents may access the foreign exchange market for payment of imports of goods, services provided by non-residents, earnings and dividends, and financial debts, as long as all the requirements are fulfilled.
- – Access to the foreign exchange market is not allowed for the repayment of debts or other liabilities in foreign currency among residents, except as permitted.
- – Resident natural persons may access the foreign exchange market regardless of the amount involved for the build-up of foreign assets, either as banknotes or deposits, provided the transaction is debited from an account at a domestic financial institution.
Access to the foreign exchange market is also allowed for other types of build-up of foreign assets, transfers for family support or derivatives transactions, subject to a monthly cap and under certain conditions.
Legal persons need the BCRA’s prior authorization to access the forex market for those purposes.
- – Non-residents also need the BCRA’s prior authorization, except in the case of international organizations, diplomatic or consular representatives, and pension beneficiaries, among others.
- – Non-residents intending to repatriate principal and income from portfolio investments in instruments listed on domestic markets authorized by the National Securities Commission (Comisión Nacional de Valores, CNV), unlisted mutual funds composed of such instruments, and sight or term deposits at domestic financial institutions are exempt from such prior authorization requirement.
- – Non-resident tourists may repurchase up to USD100 (one hundred US dollars) if the institution verifies in the BCRA’s online system that they have settled that amount or a higher amount in the previous 90 consecutive days.
- – Except for resident natural persons and institutions licensed to trade in the foreign exchange market, those wishing to conduct transactions in the foreign exchange market must not have conducted—within the previous 90 days—transactions to obtain foreign currency, cryptoassets or securities deposited abroad, and must undertake not to conduct any such transactions within the following 90 days.
- – All inquiries and requests for prior authorization must be channeled through a licensed institution. They must be addressed to the Foreign Trade and Exchange Senior Management Office and submitted at the front desk of the BCRA, including a review on the inquiry or request under consideration along with any necessary documents.
Exchange Transaction Reporting System (RIOC)
On a daily basis, financial institutions report information to the BCRA about the foreign exchange purchases and sales they arrange with their customers, through the Exchange Transaction Reporting System (Régimen Informativo de Operaciones de Cambios, RIOC), which includes a list of heading codes for the transactions made in the foreign exchange market.
Survey on External Assets and Liabilities
Communication A 6401 implemented a survey on external assets and liabilities, which superseded the surveys established by Communication A 3602 and Communication A 4237, for information as of December 31, 2017, onwards.
The new survey involves all individuals and legal persons, estates, and other vehicles not covered by the definition of General Government contained in the sixth edition of the International Monetary Fund’s Balance of Payments Manual.
Communication A 6594 exempts natural persons from disclosing external assets.