Cablegate: Argentina: 2009 National Trade Estimate


DE RUEHBU #1558/01 3192022
O 142022Z NOV 08




E.O. 12958: N/A

Ref: STATE 119763

1. (U) Per reftel, the following is Post's submission to
USTR's 2009 National Trade Estimate.


The U.S. goods trade surplus with Argentina was $1.4
billion in 2007, an increase of $563 million from $797
million in 2006. U.S. goods exports in 2007 were $5.9
billion, up 22.6 percent from the previous year.
Corresponding U.S. imports from Argentina were $4.5
billion, up 13.0 percent. Argentina is currently the 33rd
largest export market for U.S. goods.

U.S. exports of private commercial services (i.e.,
excluding military and government) to Argentina were $2.2
billion in 2006 (latest data available), and U.S. imports
were $1.0 billion. Sales of services in Argentina by
majority U.S.-owned affiliates were $2.9 billion in 2005
(latest data available), while sales of services in the
United States by majority Argentina-owned firms were $25

The stock of U.S. foreign direct investment (FDI) in
Argentina was $13.1 billion in 2006 (latest data
available), up from $11.0 billion in 2005. U.S. FDI in
Argentina is concentrated in financial services,
agribusiness, energy, petrochemicals, food processing,
household products, and motor vehicle manufacturing.

NOTE to USTR: While NTE preparation guidance received
from the State Department instructs us not to update the
Trade Summary section, we suggest the alternative final
sentence above, which was published in the Dept. of
State's 2008 Investment Climate Statement. We also note
on FDI that USDOC's Bureau of Economic Analysis 2007
estimates the historical cost of the stock of U.S. FDI in
Argentina (direct investment income excluding capital
gains and losses and without a current-cost adjustment to
earnings) at $14.9 billion in 2007, up from $13.9 billion
in 2006
( usdctry/usdc
try.htm). Also, the Argentine Investment Agency, which
uses press reports to rank country investors, listed the
United States as "the most active country investor" in



Argentina's import tariffs range from 0 percent to 35
percent, with an average applied tariff rate (according
to Argentine tax authority AFIP) of 17 percent (vs. 14%
in 2007). Argentina is a member of MERCOSUR, a customs
union formed in 1991 and comprised of Argentina, Brazil,
Paraguay, and Uruguay. MERCOSUR's common external tariff
(CET) averages 10.6 percent (according to the Foreign
Ministry) and ranges from 0 percent to 35 percent ad
valorem, with a limited number of country-specific
exceptions. MERCOSUR issued a decision in September 2007,
adopted by Argentina in October 2008, to increase the CET
to either 26 or 35 percent (from a prior ceiling of 20
percent) on several hundred tariff lines of textiles,
footwear, and automobiles and parts. Currently, Argentina
maintains exceptions to the CET on capital goods (for
which the CET is 14 percent but for which Argentina
allows duty-free entry), computing and telecommunications
goods, sugar and an additional diversified group of 100
products. Tariffs may be imposed by each MERCOSUR member
on products imported from outside the region which
transit one or more MERCOSUR member nations before
reaching their final destination. Full CET product
coverage, which would result in duty-free movement within
MERCOSUR, was originally scheduled for implementation in
2006, but has been deferred until 2009.

In 2007, Argentina imposed a specific duty safeguard on
imports of recordable compact discs, which is scheduled
to be phased out by May 2010.

Nontariff Barriers

New customs and licensing procedures and requirements
imposed by the government of Argentina in October 2008,

combined with a series of measures implemented in July
2007 and August 2007, could make importing U.S. products
and products from third-country U.S affiliates more
difficult. The measures include additional inspections,
port-of-entry restrictions, the expanded use of reference
prices, and requirements for importers to have invoices
notarized by the nearest Argentine diplomatic mission
when imported goods are below reference prices. A number
of U.S. companies with operations in Argentina have
initially expressed concern that the October 2008
measures could delay and make more costly intermediate
and final good imports from the U.S. and from their
third-country affiliates. While measures introduced in
2007 applied mainly to goods from China, India, Hong
Kong, North and South Korea, Indonesia, Malaysia,
Pakistan, the Philippines, Taiwan, Thailand, Singapore,
and Vietnam, the 2008 measures are not country-specific.
In response to Embassy inquiries, Argentine government
officials have affirmed that all of these measures are
non-discriminatory and WTO-consistent.

Customs External Note 87/2008 of October 2008 establishes
administrative mechanisms that could restrict the entry
of products deemed sensitive, such as textiles, apparel,
footwear, toys, electronic products, and leather goods,
among others. The stated purpose of the measure is to
prevent under-invoicing. While restrictions are not
country-specific, they are to be applied more stringently
to goods from countries considered "high risk" for under-
invoicing, and to products considered at risk for under-
invoicing as well as trademark fraud. The full text of
the Note is at xos/145000-
149999/145766/norma.htm. In October discussions with
Embassy, U.S. company members of the American Chamber of
Commerce Trade Committee noted no additional unusual
import processing delays and agreed to alert us to any
significant changes in import processing times related to
the new measures.

Another measure, signed by the Secretary of Industry and
Trade on October 29, 2008 (but not published as of
November 5), will impose new "automatic" licenses on 1200
different types of consumer goods, which collectively
represented approximately $3.1 billion in imports in 2007
(about 7% of total imports that year). Products affected
include food and drink, pet food, computer and audio
equipment, cars, bicycles, cameras, mattresses,
telephones, toys and watches. The licenses will,
according to public comments by the Secretary, be issued
48 to 72 hours after application.

Customs Resolution 52 of 2007 restricts the ports-of-
entry for numerous goods, including sensitive goods
classified in 20 Harmonized Tariff Schedule (HTS)
chapters (e.g. textiles, shoes, electrical machinery,
metal and certain other manufactured goods, and watches).
Partial limitations on ports-of-entry are applied to
plastic household goods, leather cases and apparel,
porcelain and ceramic tableware and ornaments, household
glass goods, imitation jewelry, household appliances,
pots and pans, computers, car parts, motorcycles and
parts, bicycles and parts, lamps, and toys. The
government of Argentina has listed products limited to
certain ports-of-entry, and the ports-of-entry applicable
to those products available at xos/130000-
134999/131847/norma.htm .

Depending on their country of origin, many of these
products are also subject to Customs External Note 58 of
2007, which revised some reference prices and set new
ones on over seven thousand tariff lines. This Note
expands selective, rigorous "red channel" inspection
procedures (via Resolution 1907 of 2005 and amplified by
Customs External Note 55 in 2007) to a broader range of
goods and requires importers to provide guarantees for
the difference of duties and taxes if the declared price
of an import is lower than its reference price.

Customs External Note 57 of 2007, which the government of
Argentina indicated was designed to discourage under-
invoicing and fraudulent under-payment of customs duties,
requires importers of any goods from designated countries
which are invoiced below the reference prices to have the
invoice validated by both the exporting country's customs

agency and the appropriate Argentine Embassy or Consulate
in that country. The government of Argentina has made the
list of reference prices and applicable countries (the
Annex to Customs External Note 58) available at xos/130000-

Since 2005, the government of Argentina has required
nonautomatic licenses on shoes, requiring certificates
that are valid for only 120 days and whose issuance
involves procedures that, according to the private
sector, are burdensome. There is an automatic license
requirement for most footwear imports; the government of
Argentina says this requirement is needed for
informational purposes. Some U.S. companies, however,
claim it is designed to delay footwear imports.

Also since 2005 the government has required nonautomatic
import licenses for toys. Obtaining a license requires
review by three different offices in the Ministry of
Economy. The process generally takes 120 days, partly due
to a backlog. Once issued, the certificates are valid for
60 days. Previously high and variable specific duties on
toys were reduced to a maximum 35 percent ad valorem
equivalent tariff in January 2007.

Since 2005, the government of Argentina has solicited
private sector companies to negotiate and abide by
sector-specific voluntary price caps aimed at limiting
price increases on key components of the consumer price
index (CPI), especially in the basic consumption basket.
Sectors in which voluntary price accords have been
negotiated include a variety of foodstuffs, personal
hygiene and cleaning products, and pharmaceuticals.
Informally controlled gasoline and diesel fuel prices
have risen significantly in 2008 but remain significantly
below prices in neighboring countries. The government,
which had largely frozen public utility electricity and
natural gas rates since 2002, has recently allowed
selective increases targeting industrial and large users,
through these rates remain significantly below those of
neighboring countries.

Argentina prohibits the import of many used capital
goods. Used capital goods which can be imported are
subject to a 6 percent import tariff. Some used machinery
imports are allowed, but only if repaired or rebuilt. The
Bilateral Automobile Pact also bans the import of used
self propelled agricultural machinery, unless it is
rebuilt. Imports of used clothing are prohibited through
June 2010, except when donated to government or religious
organizations, as established by Resolution 367 in 2005.
Argentina prohibits the importation and sale of used or
re-treaded tires, used or refurbished medical equipment,
including imaging equipment, and used automotive parts.

A fee of 0.5 percent to fund the government of
Argentina's compilation of trade data is assessed on most
imports (90 percent of all harmonized system tariff

Customs Procedures

Argentina subscribes to the WTO Agreement on Customs
Valuation. There are certificate of origin requirements
for a long list of products with non-preferential origin
treatment, as established in 2008 by the Federal
Administration for Public Revenue's (AFIP's) External
Note 2 (which replaced External Note 13 from 2006),
including textiles, motorcycles, steel products and
household appliances.

In 2005, AFIP Resolution 1811 modified the import-export
regime applied to couriers. Previously, a simplified
procedure for customs clearance applied to the
international operations expedited couriers' shipments of
up to $3,000. Resolution 1811 reduced this maximum to
$1,000. Additionally, couriers now are considered
importers and exporters of goods, rather than
transporters, and also must declare the tax
identification codes of the sender and addressee, both of
which render the process more time consuming and costly.
These regulations increase the cost not only for the
courier, but also for users of courier services. Post
has raised these issues with the Ministry of Federal
Planning, Public Investment and Services; the Directorate

of Customs; and the Secretariat of Air Transport.


Following the 2002 currency devaluation, the government
of Argentina imposed export taxes on all but a few
exports, including significant export taxes on key
hydrocarbon and agricultural commodity exports, in order
to generate revenue and increase domestic supplies of
these commodities to constrain domestic price increases.
In many cases, the export tax for raw materials is higher
than that of the processed product to encourage
development of domestic value-added production. Crude
hydrocarbon export taxes are indexed to world commodity
benchmarks. Total export tax revenue in 2007 was equal to
11.8 percent of the value of all Argentine exports (up
from 10.3 percent in 2006), including goods not subject
to export taxes.

Other export taxes continue to be actively managed by the
government of Argentina. In November 2007, export taxes
on the following major agricultural commodities were
increased: soybeans to 35 percent; soybean oil and
soybean meal to 32 percent; corn to 25 percent; wheat to
28 percent; sunflower seeds to 32 percent; and sunflower
meal and sunflower oil to 30 percent. The export tax on
biodiesel was increased from 5 to 20 percent in 2007,
with a 2.5 percent rebate. The differential taxes between
raw and processed products create large incentives to
process those commodities locally -- particularly
soybeans, which are turned into oil and in turn provide
the feedstock for Argentina's rapidly growing biodiesel

In 2008, the Argentine Congress passed legislation to
retroactively increase taxes on agricultural exports that
were registered prior to the increase in export taxes in
November 2007 and during the period March to July 2008
(under a variable export tax regime that was subsequently
suspended in July 2008). The government of Argentina is
now seeking to retroactively collect additional export
taxes on an estimated 24 million tons of grain exports.
Embassy raised these efforts to retroactively collect
export taxes with senior government officials, noting
that they prejudice U.S. company interests and adversely
affected Argentina's investment climate.

Along with applying high export taxes, the government of
Argentina requires export registration for major
commodities before an export sale can be shipped. This
process has been used to control the quantity of goods
exported, thereby manipulating domestic supply. Prior to
the increases in export taxes in November 2007, the
export registration process was closed for soybeans,
corn, and wheat. Export registrations of wheat, corn,
beef and dairy products continue to be subject to
periodic restrictions to guarantee domestic supplies.
The government of Argentina also implemented in May 2008
additional time restrictions on grain and oilseed exports
(Resolution 543). Under current requirements, exporters
are required to export the product within 45 days of
registration, with an extension of this time period only
possible for exporters who pay the export tax withi two
days of receiving the export license.

Export taxes on beef, as well as restrictions on beef
exports, have been applied with the aim of increasing
local supply and avoiding further increases in domestic
beef prices. The government of Argentina increased
controls on beef exports in the first half of 2008 in
order to guarantee domestic supplies. While increasing
the beef export quota to approximately 45,000 tons a
month, the government also implemented a new system by
which beef packing plants are required to have at least
75 percent of their warehouse capacity full to be able to
export the excess above that level. The National
Organization of Control of Agricultural Commercialization
(ONCCA, a government agency) administers the Registry of
Export Operations (ROE) under the provisions of
Resolution 3433/2008 of August 27, 2008. All exports
must be registered and the government has the authority
to reject or delay exports depending on domestic price
and supply conditions.

Exporters may claim reimbursement for some domestically
paid taxes, including value added tax (VAT)

reimbursements. The average non-VAT export reimbursement
rate is 4.2 percent of export value. The government
eliminated some non-VAT reimbursements for food products
(including milk and dairy products, and vegetable oils)
in 2005 to influence domestic prices of those goods, and
reinstated some in 2006.


The government of Argentina banned import of all products
of ruminant origin, including beef and lamb, from the
United States after a case of Bovine Spongiform
Encephalopathy (BSE) was discovered in Washington State
in December 2003. In August 2006, Argentina issued
Resolution 315, in which it adopted import requirements
consistent with the World Organization for Animal Health
(OIE) requirements with regard to BSE for dairy products,
bovine semen and embryos, hides and skins, and other
similar products. The government of Argentina has not,
however, implemented revised OIE requirements approved in
May 2007, under which the OIE classified the United
States as controlled risk for BSE. The United States
continues to engage with the relevant Argentine
government agencies to open its market for all beef and
beef products from the United States on the basis of the
OIE guidelines and the OIE's classification of the United
States as controlled risk for BSE.

Although Argentina accepts imports of some poultry
products, including day-old chicks, Argentina continues
to delay issuance of health certificates that would allow
the resumption of imports of poultry meat and products
from the United States. Argentina has banned imports of
U.S. poultry products since 2002 when imports were
stoppe as a result of an outbreak of Exotic Newcastle

In 2002, Resolution 816 established a framework for all
agricultural product imports overseen by the Argentine
Animal and Plant Inspection and Food Safety Agency
(SENASA). This resolution authorizes SENASA to inspect
those processing/packing plants that intend to export to
Argentina. In 2006 and 2007, SENASA requested several
plant inspections prior to issuance of import permits.
The United States is currently seeking SENASA recognition
of equivalency for the U.S system, rather than undergoing
plant-by-plant inspections.

Argentina's Standards Institute (IRAM) aligns the bulk of
Argentine standards with U.S. or European norms. Since
Argentina began mandating compliance with new national
safety certifications on a wide range of products in
early 1998, U.S. exports of low-voltage electrical
products (household appliance, electronics, and
electrical materials), toys, covers for dangerous
products, gas products, construction steel, personal
protective equipment, bicycles and elevators have been
negatively affected. Many U.S. exporters continue to find
the procedures for compliance to be inconsistent,
redundant, and nontransparent. Enforcement by Customs of
a regulation mandating the use of a national standards
with respect to plugs for low-voltage equipment, as
established by IRAM rules 2073/2063, and Customs
homologation required by the Secretariat of
Communications to ensure that telecommunications and
radio equipment meet regulatory requirements, can result
in long delays and do not apply to domestic producers.

Regulations that require product testing can be
cumbersome and costly for small and medium-sized U.S.
companies. Argentina's certificate of origin regulations
require separate certificates for each of the countries
involved in manufacturing the various components of a
final product.

In 2000, Resolution 287 established strict labeling
requirements for footwear and textiles with respect to,
inter alia, print size, attachment to the garment, and
information contained (including country of origin and
importer name). Importers complain that such requirements
significantly delay import processing.


Argentina's lack of adequate and effective intellectual
property protection remains a concern for the United

States. Argentina has been on the Special 301 Priority
Watch List since 1996. Although cooperation has improved
between Argentina's enforcement authorities and the U.S.
copyright industry, and the Argentine Customs authority
has taken steps to improve enforcement, the United States
encourages stronger IPR enforcement actions to combat the
widespread availability of pirated and counterfeit
products. Civil damages are nondeterrent and in criminal
cases the judiciary is reluctant to impose deterrent
penalties, such as prison sentences.

Argentine customs and other government authorities
generally cooperate with U.S. industry efforts to stop
shipments of pirated merchandise. In 2007, Argentine
customs, in close collaboration with the private sector,
instituted a program in which registered trademark owners
are notified of imports using their trademarks. Working
with those trademark owners, customs authorities have
significantly increased seizures of goods with
counterfeit trademarks. However, insufficient resources
and slow court procedures have hampered the overall
effectiveness of enforcement efforts. End-user piracy of
business software, motion picture piracy, and book piracy
remains widespread. The legal framework regarding
Internet piracy provides few incentives to investigate
and punish those who post infringing materials.

Inadequate border controls further contribute to the
regional circulation of pirated goods. Argentine customs
authorities are authorized to detain imported merchandise
based on the presumption of copyright or trademark
violations. Law 25986, passed in December 2004, expanded
this authority to detain imported goods presumed to
violate all other intellectual property rights, including
patents or industrial designs. However, regulations to
implement this law have not yet been issued. Further,
in March 2007, the Executive branch proposed a
modification to Law 25986 which would explicitly limit
such intervention to copyrights and trademarks. This
proposal has been approved by some congressional
committees, but has not yet been considered by either
full chamber of Congress.


The National Intellectual Property Institute (INPI)
started to grant pharmaceutical patents in October 2000.
Although issuance of pharmaceutical patents has been slow
since that time, INPI took a number of steps to reduce
the backlog, including the implementation in 2005 of
fast-track procedures and opportunities in 2005 and 2007
for companies to prioritize their patent applications
before INPI. Representatives of U.S. companies with
significant interest in patented product sales in
Argentina say that the patent issuance process has slowed
in 2008, and that the backlog of patent applications is
growing. Embassy has highlighted the impact of this
growing backlog on U.S. company interests to government

The United States remains concerned about the lack of
protection for the safety and efficacy data developed by
pharmaceutical companies and required to be submitted to
ANMAT (the Argentine equivalent of the U.S. Food and Drug
Administration) for the approval of pharmaceutical
products. Argentina amended its patent law in December
2003, as required by a May 2002 agreement between
Argentina and the United States. The intention of the
amendment was to provide protections for process patents
and to ensure that preliminary injunctions were available
in intellectual property court proceedings. However, the
injunctive relief process has thus far been too slow to
be an effective deterrent to patent.


Argentina's copyright laws generally provide good
protection, but copyright piracy remains a significant
problem. Argentina ratified the World Intellectual
Property Organization (WIPO) Copyright Treaty and the
WIPO Performances and Phonograms Treaty in 1999, though
some implementation issues remain. The government has yet
to fully comply with an agreement with the U.S. private
sector to eliminate unlicensed software used in
government offices.

Enforcement of copyrights on recorded music, videos,
books and computer software remains inconsistent. The
International Intellectual Property Alliance estimates
that the trade losses in 2007 were $310.7 million, an
increase from $268 million in 2006.


The United States and Argentina have been closely allied
in the area of agricultural biotechnology, including as
co-complainants in a WTO dispute challenging the EU
moratorium on transgenic crops and in discussions on
implementation of the Cartagena Biosafety Protocol.
However, the Argentine government has not enforced an
intellectual property regime to ensure that companies
developing new biotechnology crops are reasonably
compensated and guarantee future investment in
agricultural biotechnology. Argentina currently produces
approximately 47 million tons of soybeans from
biotechnology seed, the vast majority of which, according
to U.S. private sector estimates, are produced without
payment to the U.S. owners of the technology. Efforts are
currently underway to rectify this situation. Post is
actively working with the Secretary of Agriculture, as
well as with interested U.S. companies, to support these


Argentina enacted broad liberalization in the services
sector as part of its economic reform program in the
1990s, but some barriers still exist. In addition,
restrictions regarding the showing, printing and dubbing
of films add cost to U.S. exports, as does the practice
of charging ad valorem customs duties on U.S. exports
based on the estimated value of the copyrights in
Argentina rather than solely on the value of the physical
materials being imported, which is the WTO standard. In
practice, companies temporarily import one copy of a film
and produce multiples copies locally, which they claim
increases the cost of exporting movies to Argentina.

Under the WTO General Agreements on Services (GATS),
Argentina has committed to allow foreign suppliers of
noninsurance financial services to establish all forms of
commercial presence and has committed to provide market
access and national treatment to foreign suppliers of
noninsurance financial services. The only significant
remaining barrier is the limit on lending for foreign
bank branches based on local paid-in capital, as opposed
to the parent bank's capital.

Inland water shipping is reserved for Argentine flag
carriers. Any foreign firm entering the market must
nationalize vessels, pay high import duties, and follow
strict local union regulations on nationality of the


In general, commercial presence of foreign insurance
firms is permitted under the same conditions required for
local firms. Law 20091, however, establishes that the
branches or agencies of foreign insurance firms will be
authorized to perform insurance activities in Argentina
only if there is reciprocity in the respective countries'
laws. Argentine residents cannot acquire life, medical,
or patrimony insurance abroad and foreign suppliers
cannot publicize their services within Argentina.

There is also a restriction on foreign insurance firms
insuring goods owned or used by the national, provincial,
or municipal governments, independent agencies, and
people or firms that were granted concessions. The
insurance for such goods has to be engaged with local


Law 25551 of 2001 establishes a national preference for
local industry for most government purchases if the
domestic supplier bid is no more than 5 percent to 7
percent (the latter figure for small or medium-sized
businesses) higher than the foreign bid, and applies to
tender offers by all government agencies, public
utilities, and concessionaires. There is similar

legislation at the provincial level, resulting in entry
barriers for foreign firms.

Argentina is not a signatory to the WTO Agreement on
Government Procurement, but it is an observer to the WTO
Committee on Government Procurement.


Brazil and Argentina's common automotive policy
(Bilateral Automobile Pact), introduced in 2002 and
modified in 2004, 2006, and 2008, significantly restricts
bilateral trade in automobiles and automotive parts.
(Under the 2008 accord, in effect until 2013, for each
$100 of exports Brazil sells to Argentina, Argentina may
ship up to $250 worth of vehicles and auto parts back to
Brazil. For each $100 of Argentine exports, the
Brazilian auto industry can ship up to $195 to
Argentina.) There is substantial U.S. investment in
automobile manufacturing in Argentina, as well as
significant trade of U.S. cars between their U.S.
affiliates in Argentina and Brazil. These U.S. firms have
optimized their regional production, in some cases
through substantial investment in new Argentine
production facilities, in line with evolving Bilateral
Automobile Pact restrictions.

In line with WTO rules, Argentina in 1995 notified
measures (related to a prior bilateral auto pact with
Brazil) inconsistent with its obligations under the WTO
Agreement on Trade Related Investment Measures (TRIMS).
The notified measures dealt with local content and
balancing trade flows in the automotive industry. The
notification allowed Argentina to maintain such measures
for a five-year transitional period, which the WTO later
extended until December 31, 2003.

President Christina Fernandez de Kirchner announced
October 21 that her administration would submit a bill to
Congress to nationalize Argentina's private pension
system. Such a nationalization would impact the
interests of U.S. companies with significant investment
in Argentine private pension fund management. The
decision is currently pending consideration by the
Argentine Congress.

Exchange and Capital Controls

Hard currency export earnings, both from goods and
services, must be cleared in the local foreign exchange
market, with some exceptions. Time limits to fulfill this
obligation range from approximately 60 days to 360 days
for goods (depending on the goods involved) and 135
working days for services. For certain capital goods and
situations where Argentine exports receive long-term
financing not exceeding 6 years, Argentina exporters face
more liberal time limits. The maximum foreign exchange
clearance allowed for hydrocarbons exports is 30 percent
of total revenues. There is no maximum for exports of
certain minerals, re-exports of some temporary imports,
and exports to Argentine foreign trade zones. Foreign
currency earned through exports may be used for some
foreign debt payments.

Argentina has expanded its capital control regime since
2003, with the stated goal of avoiding the potentially
disruptive impact of large short-term capital flows on
the nominal exchange rate. In June 2003, Argentina
imposed a registration requirement for inflows and
outflows of capital, and a 180 day minimum investment
period. In May 2005, the government issued Presidential
Decree 616 and extended the minimum time period to 365
days. The Decree also expanded the registration
requirement to include "all types of debt operations of
residents that could imply a future foreign currency
payment to nonresidents" and requires that all foreign
debt of private Argentine residents, with the exception
of trade finance and initial public debt offerings that
bring foreign exchange into the market, must include
provisions that the debt need not be repaid in less than
365 days. As part of the capital controls, in 2004 the
BCRA issued several specific, narrowly applied new
controls on capital flows. Argentine residents are
restricted to net currency purchases of USD 2 million per
month. Institutional investors are restricted to total
currency transactions of USD 2 million per month,

although transactions by institutions acting as
intermediaries for others do not count against this

The Ministry of Economy implemented Decree 616 through
resolutions in 2005 and 2006 which imposed more
restrictive controls on the following classes of inbound
investments: inflows of foreign funds from private sector
debt (excluding foreign trade and initial public
offerings of stock and bond issues); inflows for most
fiduciary funds; inflows of nonresident funds that are
destined for the holding of Argentine pesos or the
purchase of private sector financial instruments
(excluding foreign direct investment and the primary
issuance of stocks and bonds); and investments in public
sector securities purchased in the secondary market.
These inflows are subject to three restrictions: (a) they
may not be transferred out of the country for 365 days
after their entry; (b) proceeds from foreign exchange
transactions involving these investments must be paid
into an account in the local financial system; and (c) a
30 percent unremunerated reserve requirement, meaning 30
percent of the amount of such transactions must be
deposited in a local financial entity for 365 days in an
account that must be denominated in dollars and pay no
interest. As of September 2006, a deposit is not required
for capital inflows aimed to finance energy
infrastructure works. Furthermore, as of January 2008, a
deposit is not required for inflows for the purchase of
real estate property by foreigners as long as the foreign
exchange liquidation occurs on the day of settlement (and
transfer of the title). Violations are subject to
criminal prosecution. In October 2007, the Central Bank
introduced new control measures, banning all foreign
entities from participating in Central Bank initial
public offerings; however, foreign firms may still trade
Central Bank debt instruments on the secondary market.

Bilateral Investment Treaty

Fifteen U.S. investors have submitted claims to investor-
state arbitration under the United States-Argentina
Bilateral Investment Treaty. Some of these cases claim
that measures imposed by Argentina during the financial
crisis that began in 2001 breached certain BIT


Argentina has a legal framework for digital signatures.
The Digital Signature Law 25506 of 2001 was implemented
by Presidential Decrees 2628 of 2002 and 724 of June
2006. Argentina has accepted digital signatures since
early 2004, but requires that they are verified by a
certified licensor. According to the U.S. private sector,
this has facilitated transactions and its use has
increased rapidly.

Since 2006, Decree 724 has allowed the Argentina
government agencies to act as certified licensors and to
issue certificates for government officials or private
individuals, establishing conditions for use of digital
signatures between public organizations and the
community. The Decree also eliminated the requirement
that each entity with the authority to certify digital
signatures be backed by liability insurance. Argentina
does not allow the use of electronically produced air
waybills, limiting their ability to speed up customs
processing and the growth of electronic commerce

Electronic invoicing became available in Argentina as of
January 16, 2006, through the Federal Administration of
Public Taxes (AFIP) Resolution 1956 of 2005. This new
procedure allows replacement of the traditional paper
invoice with an electronic one, which can be sent via the
Internet. The resolution establishes eligibility
requirements for companies to obtain authorization to use
electronic invoicing, such as having appropriate
information technology systems and infrastructure to send
and store originals, duplicates, and receipts and to keep
digital records/registry of all documentation sent and


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World Headlines


UN News: Monkeypox Outbreak Can Still Be Contained, Insists UN Health Agency
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