VI. TRADE REGULATIONS AND STANDARDS The GOA has virtually eliminated all non-tariff barriers and specific duties. It has also reduced the average tariff to about 12 percent and reduced the tariff range to only O to 35 percent. It has simplified document requirements substantially and opened the trade registry to all potential exporters and importers. There are no prohibited imports. The importation of used clothing has been suspended until December 31, 1994. The GOA is negotiating with Brazil, Uruguay and Paraguay to create a common market by January 1995 (MERCOSUR -Common Market). IMPORT LICENSES Import licenses are no longer required for any import, except autos which are subject to a special regime. (See below). DRAWBACK This regime provides a mechanism for refunding various import charges. The following charges are rebated: tariffs; the 10 percent statistical fee on imports; and the value-added tax of 18 percent. TEMPORARY ADMISSION REGIME (TAR) The TAR regime can be used for imported primary and intermediate goods. The exports must be completed in 180 days from the admission of imported inputs. ANTI-DUMPING AND COUNTERVAILING DUTY LAWS Regulations define "dumping" to exist when the export price of imported merchandise is lower than the comparable sales price in normal commercial operations of identical, or similar goods destined for consumption in the domestic market of the country of origin. The Argentine fair trade laws are based on Article VI of the GATT under Customs Code Law 22,415. AUTOMOBILE IMPORT REGIME The automotive industry is one of the few remaining sectors still protected by import quotas and higher duties. It has changed from a virtually closed system in 1991 to a slightly more open one today. The following is a list of the various auto import regimes in effect in Argentina: A. Compensated imports: Local original equipment manufacturers pay only two percent duty of the CIF value of the autos they import. B. Argentine/Brazilian Protocol: Argentine and Brazilian Original Equipment Manufacturers (OEMs) are allowed to import 20,000 cars and 700 trucks from each other duty free. C. Official Distributors of Foreign Cars: They may import finished cars equal in value to Argentine parts they export. They pay 10 percent duty on CIF value. D. Import Quotas for Dealers: Currently the quota is eight percent of estimated domestic production of finished cars. E. Imports by firms and individuals: Individuals and firms can bid on a portion of the quota by offering to pay additional duty. F. Imports by firms and individuals of similar models as those produced in Argentina: Unlimited imports of such models at the basic 20 percent duty. IMPORT TARIFFS AND TAXES The Argentine tariff classification system --Harmonized System (HS)-- was implemented on January 1, 1992 and is aligned with the GATT Customs Classification Code adopted in 1979. Customs Duties: The HS classification is used for specifying tariff rates. Ad valorem duties are assessed on the C.I.F. value of the imported merchandise. The average unweighted tariff is approximately 9 percent, while duty rates range from 2.5 percent to 15 percent. The top duty rate of 20 percent applies to virtually all finished goods, except capital goods not produced in Argentina where a zero duty applies. Argentina has accepted (with reservations) the GATT "Customs Valuation Code." Import Restrictions: Only a few remain in effect. Permanent quotas remain on goods such as automobiles. Temporary quotas exist on paper, pulp and a few other items. Other goods such as pharmaceuticals, foodstuffs, defense materials and other particular items require the approval of the related government department. Import Charges: In addition to the duties applied to most products entering the Argentine market, there is a 10 percent import statistics fee applied to the CIF value of all goods landed in Argentina. The CIF value plus the duty and the import statistics fee constitute the base for the application of domestic taxes. The office which drafts customs rules, regulations and tariffs is the Direccion Nacional de Impuestos, Ministerio de Economia, Hipolito Yrigoyen 250, Oficina 606, 1310 Buenos Aires, Argentina. Tel: (54-1) 331-7330; (54-1) 30-0661; Technical Administration for Imports; Azopardo 350, 1st. floor, 1328 Buenos Aires. Tel: (54-1) 343-0661/0669. Fax: (54-1) 331-9881. ILLUSTRATIVE STUDY OF DIRECT IMPORT COSTS Base Price US$ 100.00 Freight 8 pct (average) 8.00 C&F US$ 108.00 Insurance 1.5 pct of C&F 1.62 Dutiable Base = CIF US$ 109.62 10 pct Duty (or other applicable duty rate)(*) 10.62 10 pct Statistics Tax on CIF 10.62 VAT Base US$ 130.86 Port Costs (unloading, storage, etc. - approximately 6 pct) US$ 6.58 Freight Forwarder fees (1.5 pct on CIF) (**) 1.64 Bank charges (Draft of Letter of Credit, 1.5 to 2 pct of FOB) (**) 2.00 US$ 141.08 VAT 18 pct 23.55 VAT (6 pct advance or 8 pct infrequent importer on VAT Base) (***) 10.47 3 pct Anticipated profits tax on VAT Base CIF (only on items for direct consumption) (****) 3.92 GRAND TOTAL ------------------ US$ 179.02 Notes: (*) Duty rates range: 0.0 on capital goods not produced in Argentina; 2.5-to-15 pct on intermediate goods and semi- finished goods; 20 pct on finished goods which compete with Argentine manufactured products. (**) These amounts subject to 18 pct VAT on some services. (***) The advance payment of 8 pct on the VAT applies to non- registered or infrequent importers (i.e., companies or individuals who are usually importing primarily for their own use. The tax paid by infrequent importers is not deductible from their income tax liability. The advance payment of the VAT is 6 pct for registered or frequent importers (usually firms importing goods for production); it is deductible from income tax liability. (****) This applies to consumer goods directly sold in the Argentine market. In the case of larger shipments or shipments of valuable items, a security escort is recommended. Before customs clearance is granted, all taxes must be paid and registered through the CUIT (Certificado Unico de Impuestos y Tributos) document. IMPORT PAYMENT REGULATIONS There are no restrictions on import payments. Payment terms are worked-out freely between the private trading partners. COUNTERTRADE Argentine experience with barter and countertrade is very limited. Under the current liberal foreign exchange regime, there is no financial incentive to enter into countertrade arrangements. STANDARDS Argentine standards may have to be used; however, U.S., British, or similar requirements or standards may be acceptable. Follow importer's instructions. Standard Code: Argentina has signed the "Standards Code" negotiated and accepted during the Tokyo Round of MTN negotiations under the GATT. U.S. exporters can also find more information on foreign standards from the American National Standards Institute, 11 W. 42nd St., New York, N.Y. 10036. Phone: (212) 642-4900.