Argentina Trade Operations Analysis Unit and Automotive Sector Incentives: Current Information

Dear Member,

In the letter sent to our Chamber by TOBB, with reference to the Ministry of Trade's letter dated 22.06.2023 and numbered E-68460249-724.01.01-00086633297, and with reference to the letter received from the Commercial Counsellor's Office in Buenos Aires, it was stated that, following the announcement by the Argentine Ministry of Economy on 15 May 2023 that a "Trade Operations Analysis Unit" would be established in order to accelerate foreign trade, it was also announced that priority would be given to capital goods imports to be paid in 360 days, that tariffs would be removed to reduce input prices in imports and the value chain and that anti-dumping measures would be relaxed, and that, in this context, the new unit was established for the monitoring and promotion of trade operations within the framework of Joint Decision No. 1 dated 24 May 2023, adopted by the Ministry of Economy, the Federal Administration of Public Revenues, the Financial Information Unit, the National Valuation Commission, the National Insurance Supervision and the Central Bank of the Argentine Republic and published in the Official Gazette dated 29 May 2023 and numbered 35178.

It was stated that, according to the Decision on the structuring of the said Unit (https://servicios.infoleg.gob.ar/infolegInternet/anexos/380000-384999/384332/norma.htm), the new unit consists of the Ministry of Economy (Secretariat of Trade, Secretariat of Industry and Development, and Secretariat of Agriculture, Livestock and Fisheries), the Federal Administration of Public Revenues (AFIP), the General Directorate of Customs, the General Directorate of Taxation and the General Directorate of Social Security Resources, the Central Bank of Argentina (BCRA), the National Insurance Supervision, the National Securities Commission and the Financial Information Unit (UIF), and that the purpose of the unit is to monitor purchase and sale transactions subject to domestic and foreign trade in products and services, to promote fair commercial operations by avoiding dominant positions, to monitor traded goods and ensure their correct taxation at every stage, and to guide consumers.

The letter further stated that a slowdown in economic activity has been observed due to the restrictive trade measures recently taken in Argentina, that the said decision was taken in order to facilitate and control trade and that its impact on our bilateral trade will be closely monitored, and emphasised that the mechanism will create additional bureaucracy.

In addition, as another development, it is noted that a new Decision No. 281/2023 of the Argentine Ministry of Economy dated 29 May 2023 (https://www.boletinoficial.gob.ar/detalleAviso/primera/287205/20230529) was published in the Official Gazette dated 31 May 2023 and numbered 27686; that within this scope the incentive regime on the "Promotion of Investments in the Automotive Industry and Value Chain" was announced; that domestic and foreign-capital companies established in Argentina can benefit from these incentives; that the incentives will cover investments made after the publication of the said decision; that it includes early VAT refunds and the reduction of export duties to zero until 31 December 2031 for new projects for the production of automobiles and automotive parts; that goods produced within the framework of the investment projects require minimum national content of 15% in the first three years of production and 20% in the following two years; and that companies can apply for inclusion in the new regime until 31 December 2027.

On the other hand, the letter, which considers it noteworthy that the said Decision was taken following the Automotive Sector Delegation organized by the Uludağ Exporters' Associations on 21-23 May 2023, and assesses that the Decision, understood to have been taken by the Argentine authorities to increase production in the automotive sector, may reduce the competitiveness of our exports to Argentina in this sector, states that, although an incentive system as strong as the one in our country has not been put forward, our companies interested in investing in Argentina could benefit from the incentives.

Kind regards,

Elazığ Chamber of Commerce and Industry