Problems relating to Trade and Investment on Argentina

Problems relating to Trade and Investment on Argentina

9. Restrictive export/import trade, duty, and customs clearance
Issue	Issue details	Requests	Reference

(1) High Import Duty	- While many countries levy import duty on inkjet printers, high duty rates impede business operation especially in the following 2-countries: -- Brazil: Printer main unit: 16%, Printer consumables: 0% -- Argentina: SFP of less than 30 ppm: 16%, SFP of 30 ppm or more: 2%, MFP: 12%, Printer consumables: 0% - Some electric products attract high duty rate of 35%.	- It is requested that GOA reduces the tariff rates.	- Decree No 25 of 22 January 2013 - Ministry of Economy & Finance Decision No.11/2013 (24 January 2013)
	(Action) - By Decree No 25 of 22 January 2013, GOA separately added 100 items as exclusion from the Mercosur External Tariff Rates, raising the tariff rate on almost all items to the Maximum Concession Rate at 35%. Though the increased rate is within the Concession Rate, it is actually very high import duty and the increase is abrupt. - GOA temporarily reduced import duty rates on certain materials (under Mercosur Common Nomenclature (NCM) tariff code chapters 84, 85, 86, 87, 90 and 94).
	(Improvement) - On 11 November 2015, GOA extended (from 12 November 2015 to 31 December 2021) application of special most favourable import tariff (not Mercosur's External Common Tariff Rates (ECTR), but Argentina's ECTR 2% levy) on certain capital goods not domestically manufactured within the Mercosur member states.

(2) DJAI (Advance Sworn Affidavit of Intent to Import) System	- Importers must file with AFIP (Argentine tax and customs authority) via AFIP online system, import information by advance sworn affidavit of intent to import (DJAI). While importers must observe a number of requirements, the requisite standards for the approval acquisition are not clear. The requisite documents include, without limitation, price list for control of price increase, impeccable certificate of tax payment, social security, conformance with the central bank, import plan, etc. - GOA's restrictive foreign trade measures restrict free import/export business. - Due to the DJAI introduced since February 2012, the loss of sales opportunities has arisen. The ambiguity of the Administrative Examination Standard causes delays in numerous cases. It makes more difficult for the importers to set up their sales plan.	- While the necessity for the Import licence scheme is well appreciated, it is requested that GOA promulgates the rules that clearly identify the acquisition process, its timeline, and the requisite matters. - It is requested that GOA repeals the measures to restrict import business. - It is requested that GOA takes step to either repeal DJAI as soon as possible or deregulate the restrictions.	- DJAI: General Resolution No. 3252/2012 - Resolucion General AFIP No. 3252/2012 - The Tax Bureau Decree No. 3252/2012, & Customs Act No.22,425, Article 91 and amended Article 91. - General Resolution No. 3255/2012
	(Action) - On 23 January 2012, Administracion Federal de Ingresos Publicos (AFIP) issued General Resolution no.3255/2012 on DJAI for imported goods. It entered into force on 1st February 2012. Ministries and Agencies accepting DJAI are expanded to include Administracion Federal de Ingresos Publicos (AFIP), Domestic Transaction Agency, National Drug/Food/Medical Technology Supervisory Agency (ANMAT), Agricultural/Animal Food Hygienic Quality Control Centre (SENASA). - On 22 February 2012, AFIP expanded the scope of application of DJAI for imported goods to include Service Providers and Purchasers (the Official Gazette General Resolution No. 3276/2012). Services subject to application of DJAI include Electronic and Information Service, Intellectual Property Right, Rental Contract Charge, Business Service, Cultural/Entertainment Service, Export Bond Payment, Technical Transfer Service, and Purchase of Non-Financial Assets, where contract amount is USD100,000 in total or more. - The Argentine trade deficit against Brazil during January through August 2012 was USD1.71 billion, down by 54% against the same period in the preceding year, as the import was restricted following the GOA's introduction of the Anticipated Sworn Declaration of Imports (DJAI). - On 6 December 2012, Japan, the U.S., and EU requested establishment of the WTO Panel regarding the import restrictions by Argentina. - On 28 January 2013, WTO Panel was established. - On 11 December 2013, Domestic Commerce Agency initiated its new website aimed at improving the administration of information received daily, and expediting certain procedures, including DJAI issuance. - On 22 August 2014, WTO published its Panel Report, holding that the import restriction measures by Argentina are inconsistent with the WTO Agreement. - On 15 January 2015, WTO released Appellate Body Reports (DS438/DS444/DS445), holding that the balancing requirement between Export/Import and the Prior Pre-Import Affidavit Scheme restricting import is incompatible with GATT XI Article 1. Appellate Body Reports accept in full the contentions by Japan, the U.S., and EU, supports the Panel Reports, and recommends GOA's rectification in pursuance of the WTO Agreement. - On 14 December 2015, Francisco Cabrera Industry Minister promulgated New Regulation (Resolution No. 2/2016), repealing, by 31 December 2015, DJAI in conformance with the WTO Appellate Body Decision. - On 8 January 2016, GOA gave Public Announcement in Diario de Federacion on Promulgation of New Regulation (Resolution No. 2/2016) concerning implementation of New Import Licence Scheme, replacing DJAI.

(3) Protection of Domestic Products by Import Licence Measures	- Difficulty in acquisition of import licence, etc., under GOA's import administrative policy, materially hinders expansion of transactions, or start of new business by member firms with Argentina business entities. In addition, it is said frequent changes in its policy take place, while GOA consults with the amount of foreign exchange reserve.	- It is requested that GOA repeals the restrictions in their entirety.
	(Action) - Since the Lehman Brothers bankruptcy in autumn 2008, GOA introduced in full force, Non-Automatic Import Licence Scheme (NAILS) on about 600-items to maintain the current account surplus. In 2012, EU, Japan, and the U.S. filed complaint with WTO and in January 2013, GOA repealed NAILS (by Ministry of Economy & Finance Decision No.11/2013). In addition, reflecting the WTO Panel Decision of 22 December 2015, holding Non-Conformance with the WTO Agreement, GOA repealed DJAI scheme also. - On 23 December 2015, GOA, out of the blue, announced resurrection of NAILS. Further, on 8 January 2016, GOA widened the goods subject to NAILS, spreading in excess of approx. 1,400-items, including car parts, tyres, electric products, textile/clothing products, footwear, and agricultural machines. In addition, these import transactions must be made online, via integrated monitoring system for imports (Sistema Integral de Monitoreo de Importaciones= SIMI) newly introduced into the website of AFIP (=Administracion Federal de Ingresos Publicos=Federal Administration of Public Revenues).