1 Trade agreements
1.1 Which bilateral, regional and multilateral trade agreements have effect in your jurisdiction?
Argentina has entered into numerous trade agreements throughout its history. Today, Argentina is a member of:
- the World Trade Organization;
- the Latin American Integration Association (ALADI); and
- the Southern Common Market (MERCOSUR).
It also has bilateral agreements with the main foreign trade players (eg, China, India, Mexico and the European Union), either independently or as a result of its MERCOSUR membership.
1.2 Which authorities are responsible for the negotiation of trade agreements? What does this process typically involve and how long does it take?
Argentina has a representative, republican and federal form of government. As a republic, there is a division of powers between the executive branch, the legislative branch and the judiciary. The national executive branch negotiates trade agreements, which must subsequently be approved by the legislative branch (the National Congress).
Depending on the extent and importance of the agreement, the approval process can be expedited. There is not a specified timeframe within which a trade agreement must be approved.
1.3 Do interim provisions apply while new trade agreements are under negotiation?
Not generally. In order to apply tariff preferences that arise from a new agreement, negotiations must be concluded, and the National Congress must enact a law endorsing them. However, some framework agreements may include provisions giving the executive branch the capacity to accelerate the concession of certain tariff preferences.
The situation is similar when it comes to regime of origin rules or regulations on cross-border trade. The recommendation is to conduct a specific analysis of the goods and the country of origin involved in the interests of the client.
2 Customs and imports
2.1 What laws and regulations govern customs in your jurisdiction?
The Constitution of Argentina repeatedly refers to the importance of foreign trade for the country, assigning to the legislative branch (the National Congress) the competence to establish customs laws and impose taxes on foreign trade.
Following this criterion, several laws issued by Congress provide the basis on which the executive branch will subsequently administer foreign trade regulations.
All regulations can be found in a database maintained by the Ministry of Justice and Human Rights through the Legislative and Documentary Information System (www.infoleg.gob.ar); both the original and updated texts are presented.
The main regulations applicable to customs and foreign trade include:
- Law 22354 on the Approval of the Latin American Integration Association Agreement (ALADI);
- the Customs Code (Law 22415);
- Law 23981 on the Approval of the Southern Common Market Agreement (MERCOSUR);
- Law 24425 on the Accession of Argentina to the World Trade Organization (WTO);
- the Customs Code Regulations (Decree 1001/1982);
- Decree 1393/2008 on Anti-dumping Procedures;
- Decree 1330/2004 on the Temporary Import Regime for Industrial Treatment; and
- General Resolution 743/1999 of the Federal Administration of Public Income, on requirements and procedures related to the registration and processing of import clearance.
2.2 Which authority is responsible for enforcing the customs regulations? What powers does it have?
The General Directorate of Customs regulates the customs clearance of goods that are imported to and exported from Argentina. It is competent to:
- control imports and exports;
- stop clearance operations; and
- sanction foreign trade operators that do not comply with the regulations.
2.3 What is the authority's general approach to enforcing the customs regulations? How vigorously are the rules enforced?
The customs authorities have an expanded electronic system that simplifies the clearance of imports and exports (the Malvinas System). In relation to customs affidavits, under a legal principle called ‘statement in confidence', the importer can submit electronically a declaration of the merchandise and its value; the system will then determine the necessary licences and due taxes, without any input from the authorities. Customs then has five years to review the importer's declaration, should it choose to do so. During port operations, Customs can conduct a random check of physical goods and documents relating to the submitted affidavit.
2.4 What customs import tariffs and duties apply in your jurisdiction? How are they levied?
Depending on the Southern Common Market's Harmonised System classification for different types of goods, customs duties may vary from 0% to 35%. Importers may also need to pay some internal taxes (eg, value added tax or advanced income tax) before Customs will release their merchandise. All duties and taxes are levied electronically, from bank accounts to official accounts.
2.5 What types of preferential tariffs are available in your jurisdiction? What are the criteria for eligibility?
In general, preferential tariffs relate to the origin of the goods, as a consequence of trade agreements.
Some special programmes also exclude the payment of duties if imported goods are used in the processing of goods which are subsequently exported.
2.6 Are tariffs applied to safeguard national security?
Safeguard measures (licences) relate to economic and commercial issues (but not military issues), within the terms of the WTO legal framework and the terms of other trade agreements. Thus, no special tariffs are applied to safeguard national security.
However, for reasons of health and safety, and for sanitary reasons, the import of certain goods – such as medical products, weapons, used industrial equipment, toys and clothes – requires special permits and licences.
2.7 What import controls and restrictions apply in your jurisdiction? What exemptions are available?
No answer submitted for this question.
2.8 How are customs and import decisions challenged in your jurisdiction? What does this process typically involve and how long does it take?
Legal procedures in Argentina are executed in writing, sometimes electronically. Depending on the type of challenge, it could take between six months and five years – and sometimes even longer.
2.9 What penalties are imposed for breach of the customs rules?
The penalties depend on the severity of the offence. As outlined in question 2.3, under a legal principle called ‘statement in confidence', an importer can submit electronically a declaration of the merchandise and its value; the system will then determine the necessary licences and due taxes, without any input from the authorities. Customs then has five years to review the importer's declaration, should it choose to do so.
If there is a minor tax discrepancy, the importer will be asked to pay the difference.
If an infraction is committed (ie, there is some degree of responsibility on the part of the importer), the fine imposed could be up to five times the value of the merchandise and the assets involved could be forfeited.
If a serious wrongdoing or contraband is committed, the penalties can include imprisonment.
Where the behaviour of an importer is evaluated, this could result in the suspension or cancellation of its licence as an importer/exporter in the Customs Register.
3 Exports
3.1 What export controls and restrictions apply in your jurisdiction? What exemptions are available?
Customs restrictions apply to the export of certain products, such as agricultural products, hydrocarbons, certain chemicals and weapons. Otherwise, as a general rule, there are no restrictions on exports of goods. However, export duties are charged.
It is mandatory for exporters sell to the National Central Bank the foreign currency earned from the export of goods, at an official exchange rate. Exceptions apply, but they are limited and must be analysed on a case-by-case basis.
3.2 Which authority is responsible for enforcing the export controls? What powers does it have?
The General Directorate of Customs regulates the customs clearance of goods that are imported to and exported from Argentina. It is competent to:
- control imports and exports;
- stop clearance operations; and
- sanction foreign trade operators that do not comply with the regulations.
The Central Bank of the Argentine Republic controls the entry of foreign currency earned from the export of goods.
3.3 What is the authority's general approach to enforcing the export controls? How vigorously are the rules enforced?
The customs authorities have an expanded electronic system that simplifies the clearance of imports and exports (the Malvinas System). In relation to customs affidavits, under a legal principle called ‘statement in confidence', the exporter can submit electronically a declaration of the merchandise and its value; the system will then determine the necessary licences and due taxes, without any input from the authorities. Customs then has five years to review the exporter's declaration, should it choose to do so. During port operations, Customs can conduct a random check of physical goods and documents relating to the submitted affidavit.
3.4 How are export decisions challenged in your jurisdiction? What does this process typically involve and how long does it take?
Legal procedures in Argentina are executed in writing, sometimes electronically. Depending on the type of challenge, this could take between six months and five years – and sometimes even longer.
3.5 What penalties are imposed for breach of export controls?
Under both the customs and exchange laws, the penalties depend on the severity of the offence.
In relation to customs affidavits, under a legal principle called ‘statement in confidence', the exporter can submit electronically a declaration of the merchandise and its value; the system will then determine the necessary licences and due taxes, without any input from the authorities. Customs then has five years to review the exporter's declaration, should it choose to do so. During port operations, Customs can conduct a random check of physical goods and documents relating to the submitted affidavit.
If there is a minor tax discrepancy, the exporter will be asked to pay the difference.
If an infraction is committed (ie, there is some degree of responsibility on the part of the exporter), the fine imposed could be up to five times the value of the merchandise and the assets involved could be forfeited.
If a serious wrongdoing or contraband is committed, the penalties can include imprisonment.
Where the behaviour of an exporter is evaluated, this could result in the suspension or cancellation of its licence as an importer/exporter in the Customs Register.
Under the exchange rules, the penalties range from fines to imprisonment.
4 Trade remedies
4.1 What laws and regulations govern trade remedies in your jurisdiction?
- Law 22354 on the Approval of the Latin American Integration Association Agreement (ALADI);
- the Customs Code (Law 22415);
- Law 23981 on the Approval of the Southern Common Market Agreement (MERCOSUR); and
- Law 24425 on the Accession of Argentina to the World Trade Organization (WTO).
4.2 Which authority is responsible for enforcing the trade remedy regulations? What powers does it have?
The executive branch, through the Ministry of Economy, enforces the trade remedies regulations through different agencies, such as:
- Customs;
- the secretary of commerce; and
- the National Commission of Foreign Trade.
It can apply countervailing and anti-dumping duties and take safeguard measures.
4.3 What is the authority's general approach to enforcing the trade remedy regulations? How vigorously are the rules enforced?
Once a remedy has been taken, it is imposed automatically by Customs on the relevant imports.
4.4 How is a trade remedy action initiated in your jurisdiction and on what grounds? Can the authority initiate an action ex officio?
Trade remedies are usually requested by national producers by submitting pre-designed questionnaires. Domestic producers may be assisted by the Ministry of Foreign Affairs in accessing information on foreign markets which is necessary to support a case. Although it is legally stated that an action can be initiated ex officio, this not common in practice.
4.5 What does the action typically involve and how long does it take?
Investigations prior to the adoption of trade remedies usually comply with the deadlines established in the WTO Agreement (ie, they are completed in less than 18 months). During this time, exporters and importers are invited to submit information through questionnaires and share their points of view on the case. With proper advice and active participation during the investigation, it is possible to demonstrate that exporters have not engaged in dumping practices.
4.6 How can interested parties defend against a trade remedy action in your jurisdiction?
As long as they are represented locally and submit the authorities' questionnaires, the possibility to defend the case is broad. Procedures are both written and electronic.
4.7 How are trade remedy decisions challenged in your jurisdiction? What does this process typically involve and how long does it take?
A commercial correction measure must be challenged judicially and the probability of success is very low.
The best strategy for affected exporters or importers is to participate fully in the investigation or request an administrative review of the measure two years after the case closes.
4.8 What strategies should be considered to ensure compliance with a trade remedy decision? What penalties are imposed for non-compliance?
Decisions on commercial remedies are automatically applied through the Malvinas System.
In this sense, non-compliance with the application of a commercial remedy will lead to a false or misleading declaration by the importer. The penalties can include fines of up to five times the amount of outstanding taxes, plus the liability of the customs agents for making false statements.
5 Trade barriers
5.1 What laws and regulations govern trade barriers in your jurisdiction?
As a consequence of the economic crisis, the Argentine government imposed several trade barriers in order to avoid the outflow of foreign exchange. They include:
- the financial and economic capacity coefficient (CEF);
- the Argentine Republic imports system (SIRA);
- automatic and non-automatic licences; and
- foreign exchange controls.
CEF: The CEF is an equation that assesses each natural or legal person's financial economic capacity on a monthly basis. This yields a parameter that represents the capacity to carry out certain economics acts, such as imports up to a certain free on board value.
SIRA: This is an advance information system. According to the government, the SAFE Framework of Standards to Secure and Facilitate Global Trade aims to harmonise advance information in order to facilitate trade and strengthen public agencies. SIRA also aims to analyse risks based on prior information to identify, in a preventive manner:
- operators that intend to circumvent customs controls in executing import operations; and
- merchandise whose introduction into the national territory could pose a threat to health, safety or the environment, or breach other prohibitions.
Automatic and non-automatic licences: As a World Trade Organization member, Argentina has established an import licensing system.
Automatic licences are integrated with SIMI and are requested and submitted through the Malvinas System. Applications for non-automatic licences must be processed through a contact request sent via the Federal Administration of Public Income's information service.
Importers must request a non-automatic import licence for 2,700 out of 10,200 import product categories. These licences mainly apply to consumer goods including textiles, footwear, household electrical appliances, computers and cell phones.
Foreign exchange controls: The executive branch has reinstated the foreign exchange control regime in Argentina. In this sense, it was established that the Central Bank of the Argentine Republic will determine the circumstances in which access to the foreign exchange market for the purchase of foreign currency, precious metals and transfers abroad will require prior authorisation, based on objective guidelines relating to current conditions in the foreign exchange market and distinguishing between the situations of individuals and companies. Importers must thus qualify for precise exceptions set out in the Central Bank's rules in order to pay for purchases in foreign currency. If there is a slight difference between the import operation and the approved rule, they must request permission from the Central Bank.
5.2 Which authority is responsible for enforcing the trade barrier regulations? What powers does it have?
The executive branch, through the Ministry of Economy, enforces the trade remedies regulations through different agencies, such as:
- Customs;
- the secretary of commerce;
- the National Commission of Foreign Trade; and
- the Central Bank
While there is a valid reason for some trade barrier regulations (eg, health and safety), there are many others that have no sound basis. In both cases, the authorities will block the registration of import operations. If there is no valid argument to maintain this blockage, measures can be challenged before the judiciary and importers can sometimes obtain favourable resolutions.
5.3 What is the authority's general approach to enforcing the trade barrier regulations? How vigorously are the rules enforced?
The authorities, as a factual resolution, can block the registration of import operations. This decision will generally be justified by the economic crisis and the difficulty in obtaining foreign exchange to support both imports and the servicing of foreign debts. Such behaviour can be challenged before the judiciary and importers can sometimes obtain favourable resolutions.
5.4 How is a trade barrier action initiated in your jurisdiction and on what grounds?
There is no formal action for doing so. Some producers informally request protection; others argue that a technical rule is needed for specific products, or that the government is directly restricting access to imports and foreign exchange to pay for them.
5.5 What does the action typically involve and how long does it take?
There is no legal framework for this procedure; it depends on the political importance of the relevant economic sector.
5.6 What measures can the authority take against a foreign trade barrier?
If a country imposes barriers on international trade with Argentina, negotiations must take place through the World Trade Organization. Also, if the violated preference falls within the remit of the Southern Common Market (MERCOSUR) or the Latin American Integration Association (ALADI), the claim should be addressed in those forums.
5.7 What non-tariff trade barriers are imposed in your jurisdiction?
All of the aforementioned in question 5.1.
6 Sanctions
6.1 What laws and regulations govern sanctions in your jurisdiction?
Argentina has no history of imposing sanctions.
6.2 Which authority is responsible for enforcing the sanctions regulations? What powers does it have?
See question 6.1.
6.3 What is the authority's general approach to enforcing the sanctions regulations? How vigorously are the rules enforced?
See question 6.1.
6.4 What countries are currently subject to sanctions in your jurisdiction?
See question 6.1.
6.5 Are individuals or companies subject to sanctions in your jurisdiction?
See question 6.1.
6.6 How are sanction decisions challenged in your jurisdiction? What does this process typically involve and how long does it take?
See question 6.1.
6.7 What strategies should be considered to ensure compliance with a sanction decision? What penalties are imposed for non-compliance?
See question 6.1.
7 Trends and predictions
7.1 How would you describe the current legal landscape and prevailing trends affecting international trade in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms or the negotiation of new trade agreements?
The current legal landscape is not conducive to the development of foreign trade. The unpredictable government blockades which have resulted from the economic crisis make it difficult to conduct foreign trade operations on a regular basis. There are a high number of legal cases in which writs of protection have been requested to ensure that economic activities abroad can continue without interruption.
The foreign trade facilities that all foreign trade operators should enjoy are being designated exclusively to:
- public companies or companies with public participation;
- state governments; and
- certain companies with high employment capacity (eg, automotive companies).
It should further be remembered that presidential elections will be held next year in Argentina.
8 Tips and traps
8.1 What are your top tips for ensuring compliance with the regulatory framework for international trade and what potential sticking points would you highlight?
It is not difficult to comply with the current regulatory framework governing foreign trade. However, ongoing advice should be sought from professionals who understand the company's core business.
In terms of customs agents, it is recommended to have at least two different agents that can provide alternative support.
Finally, it is recommended to develop a solid institutional relationship with the customs authorities and, in case of doubt, to seek the advice of a legal firm that specialises in customs affairs.
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.
