Province of Chubut’s Series XLI Treasury Notes class 1 and class 2 Issuance for AR$ 1,830,010,000
Legal counsel to Banco del Chubut S.A., as arranger, placement and financial agent, in the issuance of Province of Chubut’s Series XLI Treasury Notes class 1 and class 2 under the Province of Chubut’s Treasury Notes Issuance Programme. Class 1 was issued for AR$ 1,717,000,000 variable rate equivalents to Badlar plus 17%, due 2020. Class 2 was issued for AR$ 113,010,000 fixed rate equivalents to 48% annual nominal, due 2020.
The transaction settled on December 20, 2019 and the payments due under the Treasury Notes Series XLI are secured by certain rights of the Province of Chubut to receive amounts under the federal tax co-participation regime.
Update in Annual Sales Limits in Order to Be Considered as Small and Medium Size Company
On December 10th, 2019, the Secretaría de Emprendedores y de la Pequeña y Mediana Empresa issued Resolution No. 563/2019 (the “Resolution”) in order to update the annual sales amounts applicable in order to qualify as small and medium size company.
Please find bellow the updated annual sales limits (expressed in Argentine Pesos), listed for each activity/sector:
| Category | Activities/Sector | ||||
| Construction | Services | Commerce | Industry and Mining | Agricultural | |
| Micro | 15,230,000 | 8,500,000 | 29,740,000 | 26,540,000 | 12,890,000 |
| Small | 90,310,000 | 50,950,000 | 178,860,000 | 190,410,000 | 48,480,000 |
| Medium size tier 1 | 503,880,000 | 425,170,000 | 1,502,750,000 | 1,190,330,000 | 345,430,000 |
| Medium size tier 2 | 755,740,000 | 607,210,000 | 2,146,810,000 | 1,739,590,000 | 547,890,000 |
Finally, please note that the Resolution has become effective today.
For more information, do not hesitate to contact Juan Pablo Bove, Federico Otero, Julián Razumny, Agustín Griffi, Pablo Tarantino, or to corporate@trsym.com.
Legal advice in the exchange of Albanesi Group companies's Notes
Counsel to Generación Mediterránea S.A. in the issuance of its Class X Notes for U$S 28,148,340 under the Global Program of Notes for an amount of up to U$S 100,000,000, and in the co-issuance of Generación Mediterránea S.A. and Central Térmica Roca S.A. of their Class III Notes for U$S 25,730,782 under the Global Program of Notes for an amount of up to U$S 300,000,000. Class X and Class III Notes were issued in exchange of Class VI Notes issued by Generación Mediterránea due February 2020 and Class I Notes co-issued by Generación Mediterránea y Central Térmica Roca due October 2020, respectively. Class X Notes and Class III Notes are guaranteed by Albanesi S.A.
SBS Trading S.A., Balanz Capital Valores S.A.U. and Banco de Servicios y Transacciones S.A. acted as arrangers and placement agents of the Class X Notes and Class III Notes.
Celulosa Argentina S.A.’s U$S 60,034,015 Class 13 notes
Counsel in Celulosa Argentina S.A.’s issuance of Class 13 Notes for U$S 60,034,015 under the Global Program of Notes for an amount of up to U$S 280,000,000, solely payable through the tender of Class 10 Notes. Puente Hnos. S.A. and Banco de Servicios y Transacciones S.A. acted as placement agents of the Class 13 Notes.
News in the Midstream Sector: Rules for Natural Gas Storage
On November 7th, 2019, Resolution No. 722/2019 issued by the National Gas Regulation Entity (in Spanish, Ente Nacional Regulador del Gas and hereinafter, the “Resolution” and “ENARGAS”, as applicable), has been published in the Official Gazette, which approved the rules for natural gas storage (the “Rules”).
The Resolution has been issued within the framework of: (i) Law No. 24,076 (which contains the main rules for natural gas midstream and downstream), and (ii) its regulatory Decree No. 1,738/1998 (the “Regulatory Decree”), which foresee natural gas storage companies as agents of the natural gas industry.
The key takeaways of the Rules are singled out below:
- Scope
The Rules establish the conditions, procedures and requirements that must be complied with by companies willing to own and operate natural gas storage facilities, as well as the requirements that must be met in order to register such facilities under the natural gas storage registry.
Natural gas storage is defined by the Rules in the following terms: “the activity intended to store natural gas in underground or ground level facilities, during a certain period of time, including delivery, storage and further withdrawn, and when applicable, its liquefaction and regasification” and further states that all ancillary activities are comprised therein.
Storage facilities comprised by the Rules are: (i) LNG storage tanks, (ii) CNG and/or in bulk CNG loading and unloading facilities, (iii) LNG regasification and/or liquefaction terminals, (iv) LNG storage “peak shaving” facilities, (v) regasification or liquefaction mobile equipment, (vi) LNG transportation tanks, (vii) underground natural gas storage facilities, and (viii) CNG tanks.
Further, facilities outlined above are also subject to safety regulations and controls that ENARGAS may issue from time to time and must also be operated pursuant to NAG Codes (i.e. applicable local technical codes) and regulations passed by the ENARGAS regarding natural gas storage.
The following facilities are expressly left out from the Rules: (a) facilities aiming to use gas as a fuel for automobile transportation; (b) fuel stations with CNG and/or LNG storage; (c) methane tankers focused on water transportation used to import and export LNG from and towards a storage, regasification or liquefaction facility; (d) hydrocarbon production equipment which run with LNG as fuel, as well as other upstream activities.
The Rules indicate that such facilities must be operated pursuant to the rules, codes and best industry practices, until the ENARGAS issues specific regulation addressing those facilities.
- Authorized entities
Companies may carry out natural gas activities insofar a prior authorization issued by the ENARGAS is in place. Such authorization must be issued by the ENARGAS no later than forty-five (45) business days as of the date on which the application is submitted, thereof.
Companies that currently operate natural gas storage facilities are granted with a sixty (60) business day-term in order to begin the registration procedure.
The Rules allow gas transportation and distribution companies to act as natural gas storage agents, whether by their own or throughout a third party or by an affiliate. A separate balance sheet and accounting procedure is required for that end.
Finally, the Rules allow applicants to comply with the requirements set forth therein by way of a Technical Operator (legal entity with experience on administration, management operation and maintenance of natural gas storage facilities, of no less than 5 years).
A Technical Operation Agreement must be entered by and between the applicant and the Technical Operation.
- Types of facilities under the Rules
In order to determine the relevant technical requirements for each specific registration, the following categories are established in the Rules:
(i) Large LNG storage: facilities equaling or exceeding 15.000 m3.
(ii) Micro/small LNG storage: facilities of less than 15.000 m3.
(iii) CNG in bulk: facilities which load or unload CNG in bulk or mobile equipment.
(iv) Underground reservoirs: (a) depleted gas reservoirs; (b) salt caverns; (c) water aquifers, and (c) coal bed methane.
- Penalty regime
The Regime foresees a penalty regime raging penalties to revocation of the authorization, prior notice and defense by the natural gas storage agent.
**
At TRSyM we are available to provide clarifications or further information of any matter addressed above. For further information, please do not hesitate to contact either Nicolás Eliaschev or Javier Constanzó.
Argentina's Anti-Corruption Office Published a Guide for the Implementation of Compliance Programs in Small and Medium Enterprises
On November 12, 2019, through Resolution 36/2019, the Anti-Corruption Office (OA) published the Supplementary Guide for the implementation of Compliance Programs in Small and Medium Enterprises ("PyMEs" for its Spanish translation).
The aforementioned resolution adds to the guidelines published by the OA in 2018 for the design, implementation and evaluation of Compliance Programs within the framework established by the Corporate Criminal Liability Law No. 27,401.
This Complementary Guide for the implementation of Compliance Programs aims to provide practical tools and instruments that can be applied by PyMEs, considering the specific characteristics of their activities. This is a joint work with the Secretariat of Entrepreneurs and PyMEs of the Production and Labor Ministry.
It is especially important since, from the effective date of Law 27,401, legal persons, including small and medium-sized companies, are responsible for certain crimes related to corruption in which they may have intervened, or that are committed in the name, interest or benefit of the company. That same law promotes that legal entities implement Compliance Programs, as a condition to participate in certain contracts with the National Government, or as a parameter of graduation of an eventual penalty. The existence of a Compliance Program is also an element that, under certain conditions, can lead to the exemption of the criminal sanction.
The OA received and incorporated contributions from compliance experts, stakeholders and the general public, through the public consultation platform of the Ministry of Modernization Government.
The Complementary Guide for PyMEs can be checked on the OA's website.
For further information, do not hesitate to contact Eugenia Pracchia and/or María Emilia Cargnel.
Argentine Securities Commission Issues Resolution on Digitalization of Corporate and Accounting Books
On October 25th, the Argentine Securities Commission (“CNV”) issued General Resolution No. 813/2019 (“GR CNV 813/19”), which authorizes certain companies subject to CNV´s regulatory compliance (issuers of debt and shares publicly offered) to keep all of their corporate and accounting books digitally; a possibility that already existed but only for the Registry of Attendance to Shareholders’ Meetings book.
GR CNV 813/19 was issued following the guidelines of Law No. 27,444 (Simplification and De-Bureaucratization for the Productive Development of the Nation) and establishes the requirements to request such authorization, including the need to digitally sign corporate and accounting books, for which company signatories need to obtain a digital certificate issued by a licensed certifier.
In order to avoid problems with the digital signature verification software, companies must choose between the following alternatives:
- hire an online verification and signature verification service with a licensed certifying authority; or
- develop the signature verification and time stamp software and have an external auditor's opinion regarding its correct operation.
Furthermore, companies must keep support documentation of their accounting operations and their management. In case of entrusting the deposit of such documentation to third parties, they must state in a note to their financial statements the place where it is stored, and identify the subject in charge of the deposit and its address.
RG CNV 813/19 entered into force last Monday, October 28th.
For further information, do not hesitate to contact Juan Pablo Bove, Federico Otero, Julián Razumny, Pablo Tarantino, and/or Agustín Griffi.
Capital Controls in Argentina: Relevant Updates on Payments of Imports of Goods
Pursuant to Communication "A" 6818 dated October 28, 2019, the Argentine Central Bank updated the foreign exchange regulations applicable to payments of imports and other purchases of goods. The new regulatory framework introduces relevant improvements, such us the regulation of import financings, which until now were not specifically contemplated in the regulation, and the reimplementation of the SEPAIMPO, a monitoring regime of payments of imports.
Below are the key takeaways of the new regime:
- General Provisions
The general rule is that Argentine importers may access to the local foreign exchange market to make payments of imports of goods and other purchases of goods, subject to certain conditions provided in the regulation (for further detail, see points 3 and 4 below). The payment includes any concept that is part of the purchase condition registered in the invoice issued by the foreign supplier.
Payments of imports of goods are divided in two types: (i) payments of imports that have customs clearance and (ii) payments of imports with customs clearance pending. In both cases, the access to the foreign exchange market includes the payment of commercial debt incurred to finance such imports of goods, including, among others: (a) financing provided by the foreign supplier, (b) financing provided by a foreign export credit agency, and (c) financing provided by a local or foreign financial entity where disbursements are used, net of costs and expenses, to pay to the foreign supplier directly.
The regulation of import financing is a positive aspect of the new regime. Until now, the foreign exchange regulations did not distinguish between financial indebtedness and commercial indebtedness, and the direct application of the disbursement to pay the exporter was not allowed. From now on, disbursements of import financings may be used to pay to the foreign supplier directly, and the requirement to repatriate and convert the loan to Pesos will not be applicable, as it occurs with financial indebtedness.
- Tracking System of Payments of Imports (“SEPAIMPO”)
The SEPAIMPO is a system implemented by the Argentine Central Bank to track the payments of imports, as well as to monitor the nationalization of the goods associated with advance payments of imports. For each import, the importer shall appoint a financial institution as monitoring entity. The monitoring entity shall verify the conditions to make payments and track the nationalization of the goods associated with an advance payment.
- Payments of Imports with Customs Clearance
The importers may purchase foreign currency in the local exchange market for the payment of imports with customs clearance registered in the SEPAIMPO, as long as the monitoring entity verifies the following requirements, among others:
- Proof of customs clearance, copy of the invoice, copy of the shipping document, and verifies that the beneficiary of the payment is the foreign supplier or the financial institution or export credit agency that financed the purchase.
- The sale of foreign currency is made against debit to a local account of the importer.
- The payment is not made before the due date of the obligation. Prepayments require prior approval by the Argentine Central Bank.
- Payment of Imports with Customs Clearance Pending
4.1. Advance Payments
The monitoring entity may grant access to the foreign exchange market for advance payments, provided that the following requirements are met, among others:
- Receives documentation to determine the existence of the purchase and the requirement of advance payment prior to the date of delivery of the goods.
- The beneficiary of the payment is the foreign supplier.
- The sale of foreign currency is made against debit to a local account of the importer.
- Receives an affidavit from the client in which it undertakes to obtain customs clearance of the goods within 90 calendar days from the date of payment, or to repatriate and convert the payment to Pesos within such period. Prior Argentine Central Bank approval shall be obtained for advance payments to affiliates or if longer periods are required.
- The amount to be paid is reasonable.
- The client has not defaulted previous advance payments.
4.2. Payment at Sight against Shipping Documents
The monitoring entity may grant access to the foreign exchange market for payments at sight, provided that the following requirements are met, among others:
- Receives copy of the invoice.
- Receives copy of the shipping documents.
- Receives documentation setting forth the obligation to pay at sight against the presentation of shipping documentation.
- The beneficiary of the payment is the foreign supplier, the foreign financial entity or the official credit agency that financed the advance payment to the exporter.
- The sale of foreign currency is made against debit to a local account of the importer.
- Receives an affidavit from the client in which it undertakes to obtain customs clearance of the goods within 90 calendar days from the date of payment, or to repatriate and convert the funds to Pesos within such period.
For more information, do not hesitate to contact Marcelo R. Tavarone, Federico Salim, Julieta De Ruggiero or Francisco Molina Portela.
Province of Chubut’s Series XL Treasury Notes Issuance for AR$ 500,000,000
Legal counsel to Banco del Chubut S.A., as arranger, placement and financial agent, in the issuance of Province of Chubut’s AR$ 500,000,000 fixed rate Series XL Treasury Notes due 2019 (the “Treasury Notes”), under the Province of Chubut’s Treasury Notes Issuance Programme, secured by certain rights of the Province of Chubut to receive amounts under the federal tax coparticipation regime.
DLA Piper Argentina counseled the Province of Chubut, as issuer of the Treasury Notes under the transaction.
Argentine Central Bank Tightens Capital Controls
In order to preserve the international reserves, the Argentine Central Bank implemented new restrictions on the purchase of foreign currency. It did so through Communication "A" 6815 dated October 28, 2019.
Below are the key takeaways of the new restrictions:
- Creation of External Assets: The limit for the creation of external assets by individuals is reduced from US$ 10,000 to US$ 200 per calendar month. The transaction must be carried out with debit to an account in a local financial institution of the client, admitting the use of cash up to US$ 100 per month. These limits are not cumulative and include all transactions already performed in October. According to point 1.4 of Communication "A" 6776 and the press release issued by the Argentine Central Bank on October 28, 2018, we understand that credit cards are not subject to this limit.
- Debit Card Cash Withdrawals: Withdrawals of foreign currency outside Argentina using local debit cards may only be made against deposits in foreign currency in local financial institutions.
- Import Advances: Importers may access the foreign exchange market for the payment of import advances to non-affiliates. Customs clearance shall be obtained within the following 90 days. Prior Argentine Central Bank approval shall be obtained if the supplier is an affiliate of the importer. Note that, prior to this new regulation, advance payments were allowed, provided that customs clearance was obtained within the following 180 days, without any distinction between affiliates and non-affiliates.
- New Information Regime for Transactions Over US$ 2,000,000: Financial institutions and exchange agencies shall report to the Argentine Central Bank on a daily basis of the foreign exchange transactions to be carried out in the following three (3) business days for amounts higher than US$ 2,000,000. In this regard, clients requesting such transactions shall inform their financial institution or exchange agency the proposed transactions with reasonable anticipation. On the day of the transaction, the client may use a different entity.
- Non-residents: The limit to purchase foreign currency by non-residents, originally set at US$ 1,000, is reduced to US$ 100 per calendar month. Payments by ANSES (National Social Security Agency) to beneficiaries of old age pensions are exempt from that limit.
For more information, do not hesitate to contact Marcelo R. Tavarone, Federico Salim, Julieta De Ruggiero or Francisco Molina Portela.