BCRA Communication “A” 7935: Changes to the Foreign Exchange Regulatory Framework.
Banking & Financial Institutions Department Report | BCRA Communication “A” 7935: Changes to the Foreign Exchange Regulatory Framework
On December 28th, 2023, the Central Bank of Argentina (BCRA) issued Communication “A” 7935, as subsequently amended by Communication “C” 96983, modifying certain provisions of BCRA’s Ordered Text of Foreign Currency and Exchange (the “Ordered Text”).
Firstly, Communication 7935 extends until 12/31/2024:
• The requirement of BCRA’s prior consent to access the Exchange Market to make payments of interest services, whether for financial debts or commercial debts for imports of goods and services before December 13th, 2023 (the later ones will now be canceled through the Exchange Market if a minimum period of 180 days is met –see our report-), to the extent that the creditor is a linked counterparty.
This requirement has been in force since 04/20/2023 and was originally valid until 12/31/2023 (see our report).
• The possibility for exporters to have an additional 180-day period (counted from the collection or disbursement) to settle foreign currency from advances, pre-financing, and post-financing from abroad, to the extent that the requirements established for this in the Ordered Text are met.
Previously, this possibility was planned for transfers entered until 12/31/2023 (see our report).
• The provisions of Communication “A” 7911, which establishes that local governments (i.e., provinces, CABA, municipalities) must consider foreign currency holdings deposited in local financial entities to grant the sworn declaration provided for in Point 3.16.2.1 of the Ordered Text, required when accessing the Exchange Market (i.e., declaration of possession of available liquid assets less than the equivalent of US$100,000).
On the other hand, the possibility of subscribing to Bonds for the Reconstruction of a Free Argentina (“BOPREAL”) Series 1 and being able to access the Exchange Market is extended until 01/31/2024, for an amount equivalent to 5% of the Amount subscribed, to pay the stock of commercial debt for imports of goods and services.
Previously, this possibility, which requires that the subscription be made for an amount equal to or greater than 50% of the total stock of outstanding individual debt, was provided for subscriptions made until 12/31/2023 (see our report).
Among other issues, Communication “A” 7925 (published on December 22nd, 2023) enabled the trading of BOPREALs in the secondary market without their sales with settlement in foreign currency or transfers abroad preventing the granting of the necessary affidavits to access the Foreign Exchange Market under certain conditions (we refer again to our report on this matter).
In a complementary manner, and without repealing the previous possibility, now under Communication 7935, this possibility is also allowed to operate other securities (not only BOPREAL), to the following extent:
(i) For sales with settlement in foreign currency and transfers abroad made after 4/1/2024;
(ii) Made by BOPREAL subscribers (i.e., those who have acquired BOPREAL in the primary subscription, not in the secondary market); and
(iii) To the extent that the market value of the operations in subsection (i) above does not exceed the difference between the value obtained from the sale with settlement in foreign currency of BOPREAL and its nominal value, provided that the former is lower.
That is, to the extent that what is received from the operations detailed in subsection (i) is less than the nominal value of the BOPREAL operated, the sale in foreign currency or transfers abroad of other securities is enabled to cover that difference.
Please, do not hesitate to contact us should you require any additional information on this matter.
Sincerely,
Pablo J. Torretta