Emerging Markets Rates and Currencies Handbook

(arbitrajes) and the transfer of foreign currency from a local account to an offshore account (canje), requires the client to submit sworn statements to the bank declaring: 1. (A) That, on the trading day, (i) the client does not own “available” external liquid assets in excess of USD 100,000 (external liquid assets are, among others, physical foreign currency, gold, deposits in foreign entities and another liquid investments) and (ii) that all foreign currency holdings in Argentina are deposited in financial entities. Certain exclusions apply to the USD 100,000 limit in external liquid assets. 1. (B)That, on the trading day and 90 or 180 days before, the client has not performed securities transactions and commits not to perform said transactions during the 90 or 180 calendar days following the trading day. The above mentioned 90-days periods apply to transactions with securities issued under Argentine law and the 180- days periods apply to transactions with securities issued under foreign law. 1.(C) Their controlling entities and other entities of the same economic group and whether the client has delivered ARS or local liquid assets to said entities. 2) Offshore financial debt: 2.(A) As a general rule, principal and interest payments can only be paid at maturity(or as early as 3 business days before maturity). 2.(B) Until December 31, 2023, payments of principal and interest under intercompany financial debt is subject to the BCRA´s prior approval. 2. (C) Principal payments with scheduled maturity until December 31, 2023, must be partially refinanced, as required by Section 3.17 of the Consolidated Text of FX Regulations. Access to the FX Market to pay principal on maturity date is permitted up to 40% of the due amount. The remaining principal amount must be refinanced with new offshore financial debt with an average life of 2 years. The refinancing requirement is not applicable to (i) foreign financial debt with multilateral agencies; (ii) indebtedness guaranteed by multilateral agencies; (iii) principal payments of up to USD 2,000,000 per calendar month; (iv) indebtedness originated on or after January 1, 2020, provided that the funds have been transferred and sold for ARS in the FX Market; (v) indebtedness originated on or after January 1, 2020 as refinancing of principal payments falling due after that date, to the extent that the refinancing has enabled the borrower to meet the conditions established in section 3.17 of the Consolidated Text of FX Regulations; and (vi) the balance of amounts previously refinanced, to the extent that the refinancing has enabled the borrower to meet the conditions established in section 3.17 of the Consolidated Text of FX Regulations. Restrictions and refinancing obligation described in this item2.(C) also apply to debt securities denominated in foreign currency with public registration in Argentina, issued by the private sector and local financial entities, and to financial debt of local governments. 3) Principal and interest under financial and trade loans in foreign currency granted by local banks can be paid by the borrower through the FX Market. Imports of goods and imports of services from non- affiliates can be paid on the maturity date, subject to compliance with applicable requirements (including, without limitation, an approved SIRA for goods or SIRASE for services). 4) Argentine companies and non-residents cannot buy foreign currency for portfolio purposes without BCRA´s prior approval. Multilateral agencies and ECAs, embassies and consulates, international courts, special missions, commissions and bilateral organizations established by treaties or special agreements to which Argentina is a party, can purchase foreign currency if the purchase is related to their activities. 5) Payment of profits and dividends to non-resident shareholders is permitted in the following situations, subject to compliance with applicable conditions: (i) the local company registers capital contributions of foreign financial investments settled in the FX Market as from January 17, 2020 and the total amount of transfers abroad to pay dividends does not exceed 30% of new foreign direct investments; (ii) profits corresponding to foreign direct investments settled in the FX Market as from November 16, 2020 used to finance projects under the “Gas Plan”; (iii) the local company has a “Certification of increase of exports of goods” for an amount equal to the amount of profits or dividends to be paid; (iv) the local company has a “Certification under the regimes of access to foreign currency for the incremental production of oil and/or gas” for an amount equal to the amount of profits or dividends to be paid; (v) the local company has a “Certification of foreign direct investment under the Investment Promotional Regime for Exports of Knowledge Economy Activities” and the transaction is made through canje or arbitraje against a special local account in foreign currency of the beneficiary of said regime. All other profits and dividends payments to non-resident shareholders require prior approval of the BCRA. 7) Repatriation of direct investments by non-Argentine residents in Argentine companies that do not control local financial institutions is permitted, provided that the