Argentina Starts Compulsory Licensing, Import Balancing for All Imports from 1 February

Beginning on 1 February, Argentine companies will have to file online affidavits and wait for government approval before they can import. Last week’s announcement of the policy - part of Buenos Aires’ efforts to stem the shrinking of its trade surplus - has drawn a cautious response from Argentina’s trading partners, particularly Brazil, along with many Argentine importers themselves.

The policy was announced by AFIP, the Argentine tax agency. Under the new policy, importers would need to file sworn statements to the agency and then wait for AFIP to either approve or reject their request.

Domestic Trade Secretary Guillermo Moreno has promised that permission - or denial - of these requests will be provided to importers within 15 working days, according to Argentine newspaper Clarín.

The move is the latest in an attempt by Buenos Aires to combat a falling trade surplus - with Argentina’s overall trade balance dropping by 13 percent to US$10 billion during the first 11 months of 2011 - and thus protect their international reserves.

Other import-related measures recently imposed by the Argentine government include a requirement for certain sectors to match imports with exports of equal value, along with expanding the number of products subject to non-automatic import licensing.

Argentine imports grew by 33 percent during the first 11 months of last year, in comparison with the same period in 2010, according to preliminary official data cited by the Financial Times.

Cars are manufactured with 70 percent of their materials being imported.

The Argentine automobile industry presents 20,000 license requests each month, out of the 50,000 per month average total.

Last week, automobile producer Fiat was forced to temporarily halt production at its plant in Córdoba due to a lack of imported parts. Production was resumed on Thursday 12 January.

The announced measure quickly drew the notice of Argentina’s partners in the Mercosur customs union, particularly of its northern neighbour Brazil.

While the Brazilian government stopped short of criticising the measure, the trade ministry did note in a statement that it had “received notice of the measure with concern and established contact with the Argentine government to better evaluate the possible impact on Brazilian exporters.”

The new policy is set to come up in the regular talks between trade officials of the two countries.