Through Executive Order 1722/2011, Argentina recently abrogated the following foreign exchange benefits applicable to the mining and oil and gas industries:
- for mining companies, an exemption on the transfer to and settlement in Argentina of 100% of export proceeds; and
- for oil and gas companies, an exemption on the transfer to and settlement in Argentina of 70% of export proceeds.
Exporters must therefore now transfer to and settle in Argentina all foreign currency obtained from their exports. The term for transferring the foreign currency into Argentina is between 60 and 360 days, depending on the type of goods exported. After the foreign currency has been transferred, it must be settled (ie, converted into pesos) within 120 business days.
The order brings the mining and oil and gas sectors into line with other sectors in the Argentine economy. While the order is still subject to regulation by the Argentine Central Bank, according to its foreword and literal provisions, the obligation to transfer into Argentina and settle foreign currency will apply even to those mining companies that have stability benefits under the Promotional Regime for Mining Investments provided by Law 24,196.
For further information on this topic please contact Federico Godoy at Beretta Godoy by telephone (+54 11 4326 7386), fax (+54 11 4326 7396) or email ([email protected]).