The Argentine Central Bank amended regulations on the requirements for the purchase of external assets and the payment of services.

Through Communication "A" 5318, effective as of July 6, 2012, and Communication "A" 5330, effective as of July 27, 2012, the Argentine Central Bank (the "Central Bank") set new changes on the legal framework that regulates the access of Argentine residents to the Argentine foreign exchange market (Mercado Único y Libre de Cambio or MULC) for the purchase of external assets (commonly referred to as "atesoramiento" or "investment") and the payment of services.

The following are some of the most important changes:

1. Outflow of foreign currency

Communications "A" 5318 and "A" 5330 amended Section 3 of Communication "A" 5264:

a. Argentine residents, legal entities, local governments and universities can access the MULC to purchase foreign currency under the item "tourism and travel" with the prior authorization of the Federal Tax Authority ("AFIP") and with the fulfillment of certain requirements, such as a sworn statement of the client and the commitment to return the funds if the trip is suspended. Moreover, the AFIP's validation is not needed when the foreign currency transaction involves: (i) transfers abroad regarding the payment of credit card consumptions and ATM withdrawals made abroad; (ii) transfers abroad from tourism and travel agents that are registered as such with AFIP; and (iii) sales to non- Argentine residents that do not exceed US$ 1,000 per calendar month and client.

b. Regarding the payment of services, Communication "A" 5318 included merchant fees among the items that require the Central Bank's prior authorization to access the MULC established by Communication "A" 5264. In addition, it clarifies that, regarding services contracts and renting or leasing of local estate owned by non-Argentine residents' contracts that generate payments or debts higher than US$ 100,000 during a calendar year, the prior authorization is needed when the accrued charges exceed US$ 100,000, regardless of the year of the accrual. That is, if the transaction does not exceed the amount above at the moment of access in the MULC, the transaction does not need the Central Bank's prior authorization.

c. Communication "A" 5318 established that the Central Bank's prior authorization is not needed when the purchase of foreign currency is for donations and to the extent that the following requirements are met: (i) when the receiver of the funds is a governmental entity, an international organization or an international entity recognized for its activities of charitable contributions; and (ii) the allocation of the funds is to cope with natural disasters or healthcare emergencies.

d. Communication "A" 5330 increased the restrictions set for transferring foreign currency abroad for family assistance. The Central Bank's prior authorization is needed when the transfer of funds abroad is higher than an amount equal to US$ 1,500 per client per month. Moreover, the transfers that are higher than an amount equal to US$ 300 per client and per month must be must be executed by a client's check or charged to the client's at sight account in a local financial entity.

e. Transfers under the item of scholarships and education expenses must be made by residents to educational institutions.

2. Investment

Communication "A" 5318 suspended indefinitely the access of Argentine residents to the MULC for the purchase of external assets without Central Bank prior authorization. That is, regulations that authorized the purchase of foreign currency, subject to the limit of US$ 2,000,000 per month, for real estate investments abroad, loans granted to non-residents, residents' contributions for direct investments abroad, other investments of residents abroad, legal entities' portfolio investments abroad, purchase for saving of foreign bills in the country, purchase of travelers' checks and donations were suspended.

3. Mortgage credit

Individuals may access the MULC to purchase foreign currency in relation to long term mortgage credits that have been prearranged at the date of the effectiveness of Communication "A" 5318 until October 31, 2012. Additionally, the funds must be destined simultaneously to the payment of the purchase of the housing. These transactions shall be made under the item "Purchase of foreign currency with mortgage credit funds".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.