Argentina on go Slow in Automatic Licence Approval, Approval Rate only 33%

Argentina’s new import controls entered into effect last week, sparking questions from its regional trading partners - particularly fellow Mercosur members Brazil, Uruguay, and Paraguay - and from business and industry groups.

Buenos Aires’ new trade measures, which were launched on 1 February, require Argentine companies to file online affidavits - known as the Advanced Sworn Statement on Imports (DJAI, by its acronym in Spanish) - and wait for government approval before they can import.

The new legislation was announced by AFIP, the Argentine tax agency, which is assessing the import requests together with the Argentine Ministry of Commerce.

A week into the new policy, Argentine newspaper Clarín reported today, only one out of every three affidavits submitted had been approved - or 4700 out of 16,500. Of the remaining affidavits, 9200 are still being process, while 2600 have been placed under observation.

Those companies who have had permits placed under observation must either go to the tax agency or to the Commerce ministry to learn why the permits did not go through, and what can be done to obtain permission.

The new policy is Buenos Aires’ latest attempt to combat a falling trade surplus and protect its stock of international reserves. The country’s overall trade balance dropped by 13 percent to US$10bn during the first 11 months of 2011.

However, some Argentine business and industry leaders, along with other regional trading partners, appear unconvinced of the measure’s merits and wary of the possible effects on trade with the South American country.

“It is very clear to us that the government is applying a policy of administering foreign trade to seek to maintain a trade surplus and to stimulate substitution of imports with domestic production,” said Diego Pérez Santisteban, head of the Argentine Chamber of Importers.