Argentina to Tighten Imports Controls to Preserve Reserves

The Argentine government will impose restrictions to discourage imports in the coming days and protect reserves, according to people with direct knowledge of the matter.

The government is seeking to avoid losing more dollars after the national statistics agency on Monday reported that the country’s trade deficit widened in July to $437 million. Private consultants estimate that the country’s so-called net reserves -- its assets on hand, minus the money it owes -- shrank to less than $2 billion.

To protect its reserves, the government plans to announce three measures, which include more bureaucracy or paperwork for imports, especially for services.

Measures under consideration by the government:

• To require prior authorization for the services imports and access to the official exchange market, evaluating the economic capacity of importers
  • At present, the government requires prior authorization for goods but not for services. The government believes that there is currently an excess demand for services, stimulated by the high exchange rate gap
• Also, the government is considering classifying 34 imported items as “non-automatic licenses” that must be approved by the Secretary of Commerce
  • This measure would affect imports that reached around $1.2 billion in 2022 and represented almost 5% of the total imports
• Finally, the idea is to reduce the period of time in which importers must re-export a product to be exempt from paying import taxes
  • This term would be reduced to 120 days, from the current 360 days
  • This will affect imports that reached around $3 billion so far in 2022, which include soybeans imports for $1.6 billion in the same period