In July, the Argentine Central Bank issued new rules concerning the conversion and transfer of currency. The new rules significantly restrict the cash flow necessary to operate employee stock programs. Specifically, the Central Bank rules prohibit the exchange of Argentine pesos for foreign currency, except in the following situations (none of which is helpful for the employee stock programs):
- Tourism and travel purposes up to US$1,000 per month with Central Bank validation
- Sales of products to non-Argentine residents up to US$1,000 per month
- Payments for services provided or rental property to non-Argentine residents up to US$100,000
- Charitable contributions to government-sponsored agencies and international organizations
- Payments for family support or educational expenses
In effect, the Central Bank has suspended all other currency conversions and transfers unless prior approval is obtained from the Central Bank. Since the rules went into effect in the past few months, it is difficult to predict if the Central Bank will approve the exchange of Argentine pesos for the operation of an employee stock program.