I OVERVIEW

Unlike other Latin American countries2 in which structured products have a specific regulatory framework, in Argentina regulations regarding structured products are dispersed. This lack of specific regulation is consistent with a non-developed market, in which structured products are scarce.

While no official statistics are available, the Argentine market for structured products is mainly composed of products issued by foreign issuers, which are generally offered to institutional investors in Argentina. However, certain domestic structured debt securities and certain structured deposits are available. For the purpose of this chapter, we focus on these two types of instruments and we also analyse the regulations for investments by Argentine residents in foreign structured products.

II LEGAL AND REGULATORY FRAMEWORK

The marketing and sale of structured products in Argentina, as well as the purchase of such instruments by Argentine investors, are subject to different legal and regulatory frameworks.

The Capital Markets Law No. 26,831 (as amended) (the Capital Markets Law) and the Argentine Securities Commission (CNV)'s Rules (Resolution No. 622/2013, as amended) (the CNV Rules) govern the requirements necessary for public offering and marketing structured products that qualify as 'securities'. However, structured deposits offered by financial institutions are governed by the Financial Entities Law No, 21,526 (as amended) (the Financial Entities Law) and the Argentine Central Bank's (BCRA) regulations.

III STRUCTURED SECURITIES

i Public offering of securities

Article 2 of the Capital Markets Law provides a broad definition of 'securities' pursuant to which any book-entry or physical securities, as well as any investment contracts or homogeneous and fungible credit rights, issued or grouped in series and negotiable in the same form and with similar effects to securities, are deemed securities and subject to the regulations of the Capital Markets Law. This definition is based on the principle of free creation of securities contemplated in the Capital Markets Law,3 according to which any type of security, even if not expressly regulated by the Capital Markets Regulations or other law or regulation, may be freely created and publicly offered and sold.

Article 2 of the Capital Markets Law also provides a broad definition of 'public offering', which consists in a 'solicitation for the performance of legal acts involving securities that is addressed to the general public or to specific sectors or groups by issuers or sole proprietorships or companies engaging solely or partially in securities trading'; therefore covering initial issuance and placement of securities (primary market) and the subsequent purchase and sale of securities (secondary market, in other words, 'trading').

The CNV has regulatory and surveillance authority with respect to public offerings of securities. In this vein, issuers, placement agents, brokers and any other person involved in the public offering of securities must be registered with the CNV. Likewise, any given public offering of securities requires the CNV's prior clearance.4

Considering the definition of 'securities' and 'public offering' detailed above, structured products that are designed as structured securities fall under the scope of the Capital Markets Law, and therefore the public offering of those structured securities in Argentina is subject to the CNV's prior clearance.

ii 'Irregular' public offering

The Capital Markets Law establishes that any individual or legal entity that in any way intervenes or participates in a public offering of securities without the relevant authorisation from the CNV shall be subject to administrative sanctions, which may be applied by the CNV after a regulated administrative procedure.5 Furthermore, the Argentine Criminal Code imposes sanctions on any person who collects funds from the public in the securities market or provides intermediation services for the acquisition of securities without the corresponding CNV's authorisation.6

Although there is no legal definition of 'irregular public offering', Argentine courts and the CNV have deemed 'irregular' certain offerings of securities where, for instance, the unauthorised issuer did not have personal knowledge of the investors,7 an unauthorised intermediary publicly advertised securities through graphic media,8 the unauthorised issuer offered a certain amount of money in exchange for the assignment of the payment rights arising from certain bonds,9 or the unauthorised issuer was not a company or organisation exclusively of partially dedicated to the trading of securities.10

iii Investments in foreign structured securities

According to CNV Rules, Argentine residents are allowed to invest in foreign structured securities to the extent that they do it through a broker agent or a clearing and settlement agent registered with the CNV.

The CNV Rules provide that this type of investment can be made through these agents to the extent:11

  1. the securities are authorised and registered with securities commissions of a cooperative jurisdiction;
  2. the agents have entered into agreements with broker agents abroad for the purpose of delivering and settling the orders of the investors; and
  3. the investors qualify as 'qualified investors' under the CNV Rules or the client has expressly authorised the agent to perform this type of transactions on its behalf.12

Pursuant to the CNV Rules, 'qualified investors' are, among others, insurance and reinsurance companies, mutual funds and financial entities.13 While the insurance companies are restricted from making investments abroad,14 the reinsurance companies,15 the mutual funds16 and the financial entities are allowed to make investments in foreign structured products.17

iv Authorised public offering

Public offering of structured securities is subject to the CNV's prior clearance. The procedure for requesting authorisation for the public offering of securities is provided by the CNV Rules, which, depending on the type of issuer (i.e., companies, financial trusts and mutual funds), detail the requisites to be complied with in order to obtain such a clearance.

The typical requisites for requesting clearance for public offering of securities are the following:

  1. an offering memorandum stating the terms and conditions of the issuance of securities, drafted in accordance with the structure and guidelines set forth in the CNV Rules;
  2. the resolutions of the relevant corporate organisms approving the issuance of securities and its terms and conditions;
  3. a legal opinion issued by legal counsel regarding the compliance of the issuer's request (including the offering memorandum) with the Capital Markets Regulations and the Negotiable Obligations Law No. 23,576 (as amended, the Negotiable Obligations Law); and
  4. an independent public accountant's report on whether the information provided by the issuer is consistent with the existing records reflected in the issuer's books, accounting records and other supporting documentation.

v Typical structured securities in the Argentine market

Currently, two main types of structured securities are being offered in Argentina: dollar-linked debt securities and UVA/UVI denominated securities. These types of securities are usually listed in BYMA (Bolsas y Mercados Argentinos SA) and traded in MAE (Mercado Abierto Electrónico SA).

The dollar-linked debt securities are notes denominated in US dollars but paid-in and payable in Argentine pesos at the prevailing exchange rate of the subscription date or the payment date (as applicable). The return of these notes is based on a fix component, which is the interest rate, plus the variation of the exchange rate between the date of subscription by the investor and the date of payment of principal and interest by the issuer. This type of instrument provides coverage to the investors against the depreciation of the Argentine peso with respect to the US dollar. For the issuers, this instrument is a useful tool of financing when their incomes and costs are linked to the US dollar. For that reason, the most common issuers of this type of instruments are companies in the energy and agribusiness sector.

In the case of UVA/UVI denominated securities, the return is also based on a fix component, which is the interest rate, plus the variation of the UVA/UVI's value between the subscription date and the principal and interest payment date.18 This type of securities can be issued as notes, mutual investment funds' units or financial trust securities and provides coverage from the high rates of inflation in Argentina.19 Unlike the case of dollar-linked securities, the CNV Rules expressly provide certain rules for the issuance of UVA/UVI denominated securities:

  1. the amortisation period of such securities shall not exceed two years as from the issuance date;
  2. in the case of the issuance of mutual investment funds' shares or financial trust securities, the offering memorandum must include specific information regarding the repayment mechanisms; and
  3. for the issuance of trust securities, the trustee and the trustor expressly state such decision in the resolutions of their corporate organs.
    vi Influence of international regulations

In September 200920 and in December 2013,21 the International Organization of Securities Commissions (IOSCO) conducted surveys in different jurisdictions in order to make an assessment of the regulatory status of structured products. Those surveys resulted in a regulatory toolkit based on five sections:

  1. overall approach to structured products;
  2. design and issuance of the products;
  3. disclosure and marketing of the products;
  4. distribution of the products; and
  5. post-sales practices (i.e., once the products are in the hands of investors).22

The CNV is a member of IOSCO and has an active participation in its meetings and forums. However, at the time of writing, the CNV has not issued a specific regulation covering structured products, which are governed by the dispersed regulatory framework detailed above.23

IV STRUCTURED DEPOSITS

Structured products under the form of deposits or investments with variable income are offered by financial entities regulated by the Financial Entities Law, in accordance with the BCRA's regulations regarding time deposits and term investments (as amended, the Time Deposits and Term Investments Regulation).24

The Time Deposits and Term Investments Regulation provides several types of structure products such as UVA/UVI-denominated time deposits and floating return time deposits. In addition, pursuant to a recent amendment, the Time Deposits and Term Investments Regulations allowed the creation of a new product by the financial entities, known as DIVA (Floating Return Deposits), addressed to individuals or entities in the agricultural sector.

i Unauthorised financial intermediation

Structured deposits – like any other deposit – can only be offered by financial entities authorised by the BCRA. Any offering of this kind of product by an entity that is not authorised by the BCRA would be deemed unauthorised financial intermediation, which could be subject to the sanctions provided by Financial Entities Law25 and Article 310 of the Argentine Criminal Code.26

ii Floating return deposits

Financial entities may collect funds from third parties (outside of the financial sector) in the form of time deposits. Such investments can be considered a structured product when their performance is determined by the positive or negative variations in the value of certain assets or financial indicators.27 This type of deposit can also include a fix component that will be the interest rate offered by the relevant financial entity.

Pursuant to the Time Deposits and Term Investments Regulation, the price variation experienced by the chosen asset until the maturity of the investment, or until the date chosen by the investor (if applicable), must be limited to a certain range (minimum and maximum values), which will be specified in the contractual clauses. In addition, the markets or financial markets must be precisely defined, as well as the point in time (e.g., initial, final or average) and means that will serve as a reference for obtaining the values of the chosen parameters. In the relevant clause, in addition to its literal definition, the mathematical expression to be used to calculate the investors' income must be stated, with identification of all the variables involved.

The participation of financial entities in the collection of funds under this regime must be in accordance with a specific risk coverage policy to be adopted by their board of directors or equivalent authority. All the operations aimed at covering risks arising from the variable income must be conducted with entities that comply with the Credit Ratings regulation issued by the BCRA and that have obtained the international risk qualification of 'investment grade'.

Moreover, financial entities must notify the Superintendence of Financial and Foreign Exchange Entities as soon as they begin to operate under such regime. This notification must include information regarding the policies adopted for the implementation of this type of investment, including data related to assets and other indicators, counterparties or markets involved, types of coverage to be used and levels of responsibility for the approval of transactions.

iii DIVA

In June 2020, the BCRA created this type of time deposit for the agricultural sector in order to provide a coverage instrument for the depreciation risk derived from the mandatory obligation to repatriate and exchange into pesos the collections from export of commodities through the Foreign Exchange Market (MLC).28 Such deposits can be made by agricultural producers for up to twice the total value of their sales of cereals or oilseeds, or both, registered as of 1 November 2019.

This type of time deposit can be linked to the variation of the price of certain commodities (e.g., corn or oilseeds) or the Argentine peso/US dollar exchange rate, and must be collected and paid in pesos. The minimum term established for this product is of 60 calendar days, with a maximum term of up to 370 calendar days.

iv Eligible investors

From the investors' standpoint, as a rule there are no legal restrictions that would prevent or limit individuals, corporations in general, banks, insurance companies, and mutual or investment funds from acquiring structured securities or investing in structured deposits.

Regarding securities in general, securities issued by small and medium-sized enterprises and short-term debt securities can only be offered to 'qualified investors' as defined in the CNV Rules. In addition, the CNV may determine that any given offering of mutual investment funds units can only be addressed to qualified investors, by virtue of the particular structure of the issuer fund.

With respect to structured deposits, returns under DIVA can only be offered to individuals or entities that perform agricultural activities, up to an amount equivalent to two times the total value of the sales of cereals or oilseeds, or both, registered as of 1 November 2019.

v KYC and anti-money laundering

Article 20 of the Anti-Money Laundering Law No. 25,246 (as amended and supplemented from time to time) (the Anti-Money Laundering Law) delegates enforcement responsibilities to the private sector, including banks, insurance companies, stock brokers and broker companies (the reporting entities). As a consequence, the persons listed in Section 20 of the Anti-Money Laundering Law are mainly obliged to report suspected money laundering transactions and submit certain information to the Financial Information Unit (FIU), the entity in charge of surveillance and enforcement of the Anti-Money Laundering Law.

The FIU issued Resolution No. 30-E/17 and Resolution No. 21-E/18, which set forth the guidelines for financial entities (the former) and agents and brokerage companies (the latter) as Reporting Parties. Both Resolutions provide a risk-based compliance approach, establishing different types of diligence measures according to the risk categorisation of the Reporting Parties' clients. These regulations are supplemented by the BCRA and the CNV Rules, which establish certain additional precautions to be taken into consideration in order to prevent money laundering.29

V TAX CONSIDERATIONS

There are no rules in place that specifically address the tax implications of structured products. Therefore, income arising from these investments shall be governed by the general provisions of the Argentine Income Tax Law (ITL).30

i Structured securities

Income arising from structure securities qualifies as interest, whether it is determined by considering a fixed or floating rate or a blend of both.31 Interest and capital gains obtained by individuals and foreign beneficiaries who are resident in cooperating jurisdictions or if the funds invested proceed from such jurisdictions32 (Qualifying Non-resident Beneficiaries) arising from publicly placed structured securities are exempt.33

When structured securities are not exempt, interest obtained by resident individuals is taxed with tax brackets ranging from 0 per cent to 35 per cent. Non-resident beneficiaries are taxed at: (1) 15.05 per cent; (2) 12 per cent if a tax treaty applies;34 or (3) 35 per cent. Capital gains, when the structured securities do not qualify for the exemption are taxed at (1) 5 per cent, or (2) 15 per cent rates, depending on whether they are denominated in local currency or foreign currency, or if they have an adjustment clause.35 As regards non-resident beneficiaries,36 gains from their disposal are subject to income tax at an effective tax rate of 31.5 per cent.37 The latter rate may be reduced to 15 per cent under certain circumstances. Both interest and capital gains are taxed at a flat 30 per cent rate for corporate taxpayers.38

ii Structured deposits

Interest originated in deposits in accounts in Argentine financial entities that qualify, inter alia, as fixed terms deposits and other forms of collecting funds from the public, in accordance with the regulations set forth by the BCRA, is exempt from income tax.39 This exemption is applicable for individuals and non-resident beneficiaries; corporate taxpayers are out of the scope of the exemption.40 Consequently, income obtained by individuals and non-resident beneficiaries from structured deposits (such as DIVA) are exempt.

VI OTHER ISSUES

i Foreign exchange controls

The Foreign Exchange Regulations currently in place (the FX Regulations)41 establish that the funds obtained from the issuance of local debt securities by Argentine residents as from 29 November 2019, when such securities are denominated, subscribed and integrated in foreign currency and for which capital and interest are payable in Argentina in foreign currency, must be repatriated and exchanged into Argentine pesos through the MLC, as a requirement for the subsequent access to the foreign exchange market by the Argentine issuer for the purpose of their repayment.

On another note, non-resident investors, who acquire securities in Argentina, must request the BCRA's approval to access the MLC for the purpose of transferring abroad the equivalent in foreign currency of the amounts they obtained in connection with the repayment or sale in Argentina of such securities.

The Criminal Exchange Law No. 19,539 (as amended) reaches transactions not complying with the FX Regulations, providing sanctions in case of infringement of such regulations.42

VII OUTLOOK AND CONCLUSIONS

The always challenging Argentine market is a proper environment for the design and development of structured products aimed at mitigating risk exposure, which is evidenced by the incipient development of structured products in Argentina despite the lack of regulations – particularly in the capital markets sector. We believe that a specific regulatory environment would boost the range of structured products, by reducing uncertainties regarding offering and commercialisation of these types of products, particularly in the context where – other than DIVA – they may be offered to any type of investor.


Footnotes

1 Fermín Caride and María Victoria Funes are partners and María Victoria Tuculet and Lucía Carro are associates at Bomchil. The authors acknowledge the assistance of Santiago Bergallo, associate at Bromchil, in drafting the Tax Considerations section of the chapter.

2 For instance, Brazil has the 'Certificate of Structured Transactions' (COEs) (see https://thelawreviews.co.uk/edition/the-structured-products-law-review/1212183/brazil), and Mexico has regulations regarding structured securities (see https://www.cnbv.gob.mx/SECTORES-SUPERVISADOS/BURS%C3%81TIL/Descripci%C3%B3n/Paginas/Instrumentos.aspx).

3 Article 3 of the Capital Markets Law.

4 Such authorisation shall be granted by the CNV provided that the applicable requirements of transparency and investors' protection are met, but it does not imply a guarantee of the investment quality of the particular security.

5 Such sanctions consist of: (1) a formal warning, which may be accompanied by an obligation to publish the operative part of the CNV's resolution in the Argentine Official Gazette; (2) a fine, which may be increased up to five times the benefit obtained or the damage caused as a result of the unlawful action; (3) disqualification of up to five years to exercise functions as directors, administrators, trustees, members of the supervisory board, accountants or external auditors or managers of authorised markets and registered agents or of any other entity under the control of the CNV; or (4) suspension of up to two years or prohibition to make public offerings or, if applicable, to intervene or participate in a public offering.

6 Article 310 of the Argentine Criminal Code sets forth the following sanctions: prison penalty of one to four years, a fine of two to eight times the value of the irregular operations and special disqualification of up to six years. The minimum amount of the penalty shall be increased to two years when journalistic publications, radio or television transmissions, internet, film projections, billboards, signs or posters, programs, circular letters and printed communications or any other procedure of massive diffusion have been used.

7 Cámara Nacional de Apelaciones en lo Comercial – Sala A, in re Comisión Nacional de Valores c/Moreno German, 23 October 2012.

8 Cámara Nacional de Apelaciones en lo Comercial – Sala D, in re Comisión Nacional de Valores s/publicación ámbito financiero, 22 September 2011. On a similar note, see Comisión Nacional de Valores, in re Michel, Oscar A., 6 February 2009.

9 Cámara Nacional de Apelaciones en lo Comercial – Sala A, in re Comisión Nacional de Valores c/Palmares Sociedad de Bolsa S.A., 1 September 2011.

10 Comisión Nacional de Valores, in re Tell, Pablo, 30 October 2008. In addition, it must be noted that in a judicial decision issued in November 2013, an Argentine court upheld a CNV's decision that denied authorisation to an Argentine online trading company to make a public offering of 'contracts for difference' (which fell within the scope of the legal definition of 'securities') on the basis that the issuer requested not to trade the contracts for difference in an authorised market but in a private platform not authorised by the CNV to operate as a market (Cámara Nacional de Apelaciones en lo Comercial – Sala A; in re Admiral Markets Argentina S.A. s/solicitud de autorización de oferta pública s/organismos externos (Comisión Nacional de Valores), 5 November 2013). Considering this precedent, the public offering of structured securities shall only be made in markets authorised by the CNV. Alternatively, it could be possible to offer this kind of products exclusively in the OTC market, through private offerings.

11 Title VII, Chapter I, Articles 2 c) and 3 of the CNV Rules and Title VII, Chapter II, Articles 2 c) and 3 of the CNV rules.

12 Title VII, Chapter I, Article 12 m) of the CNV Rules and Title VII, Chapter I, Article 16 l) of the CNV Rules.

13 In addition, according to the CNV Rules, 'qualified investors' are the following: (1) the national government, provinces and municipalities, autonomous entities, and state-owned companies; (2) international organisations; (3) public trust funds; (4) the National Administration of Social Security - Guarantee Fund of Sustainability; (5) pension funds; (6) financial trusts with public offering; (7) reciprocal guarantee companies; (8) registered agents with the CNV (in respect of their own portfolio); (9) individuals registered with the CNV under the Competence Registry; (10) individuals with investments for an amount of 350,000 UVA (equivalent to 19.8 million Argentine pesos); and (11) foreign entities and non-resident individuals.

14 Pursuant to Article 35.5 of the General Insurance Regulations (Resolution No. 38,708 issued by the National Superintendence of Insurance), all the assets of the insurance companies, including their underlying assets (if applicable), must be issued and negotiated in Argentina.

15 Pursuant to Article 35.5 of the General Insurance Regulations (Resolution No. 38,708 issued by the National Superintendence of Insurance), reinsurance companies may have investments and availabilities abroad, subject to certain percentages set forth in the General Insurance Regulations.

16 Pursuant to Title V, Chapter II, Section IV, Article 19 of the CNV Rules, at least 75 per cent of the mutual funds' assets must be invested in authorised instruments issued and negotiated in Argentina, or in countries that have the status of 'State Parties to the MERCOSUR (Mercado Común del Sur)' and in Chile. In addition, the mutual funds whose currency is the Argentine Peso must invest at least 75 per cent of its assets in financial instruments and securities issued exclusively in pesos in Argentina (such restriction is not applicable to investments made in foreign currency denominated assets that are integrated and payable exclusively in pesos).

17 Pursuant to 'Spot, Forwards, Swaps, Derivatives and Other Transactions with Mutual Funds Regulations' issued by the BCRA (Texto Ordenado sobre Operaciones al Contado a Liquidar y a Término, Pases, Cauciones, Otros Derivados y con Fondos Comunes de Inversión, Communiqué 'A' 3027, as amended and supplemented from time to time).

18 The value of each UVA will vary by applying the Reference Stabilisation Factor (CER). Likewise, the deposited amount may be expressed in Housing Units (UVIs). The value of each UVI will vary by applying the construction cost index for Buenos Aires (ICC) published by the National Institute of Statistics (INDEC) for model 6 single-family housing. The BCRA periodically publishes the daily value in pesos of the UVA and UVI. The initial value of each UVA or UVI was, in both cases, 14.053 pesos. As of 19 August 2020, each UVA and UVI is equivalent to 56.83 pesos and 50.67 pesos, respectively.

19 In June 2018, the International Practices Task Force of the Centre for Audit Quality, an entity that monitors 'highly inflationary' countries, categorised Argentina as a country with a three-year cumulative inflation rate above 100 per cent. This factor, as well as the presence of other qualitative factors inherent to 'hyperinflationary economies' pursuant to the International Accounting Standard No. 29, allows the categorisation of Argentina as a 'hyperinflationary economy' as of 1 July 2018.

20 IOCO's report transparency of structured finance products, available at https://www.iosco.org/library/pubdocs/pdf/IOSCOPD306.pdf.

21 IOSCO's report on the regulation of retail structured products, available at https://www.iosco.org/library/pubdocs/pdf/IOSCOPD434.pdf.

23 Unlike the case of the CNV, as detailed in Section II(ii) – Structured Products Offered by Financial Institutions, the BCRA issued a specific regulation for structured deposits that can be offered by the financial entities. However, in our research we did not find official documents regarding the regulations of this type of products and their compliance (or not) with Basel Committee's pillars. Although the Basel Committee issues jurisdictional regulatory assessments addressing different subjects of the banking activity, in the case of Argentina's regulatory assessment no references to the structured deposits regulations are made. See https://www.bis.org/bcbs/implementation/rcap_jurisdictional.htm.

24 Communiqué 'A' 3043 (as amended and supplemented from time to time).

25 These sanctions consist in: (1) a formal notice or warning; (2) a fine; (3) temporary or permanent disqualification for the use of the checking account; (4) temporary or permanent disqualification from acting as promoters, founders, directors, administrators, members of the supervisory boards, trustees, liquidators, managers, auditors, partners or shareholders of the entities covered by this law; or (5) the revocation of the authorisation to operate.

26 For further detail of the provisions of Article 310 of the Argentine Criminal Code, see Section III(ii) – 'Irregular' Public Offering of Structured Securities.

27 According to item 2.5.6 of the BCRA's reinstated text regarding the 'Time Deposits and Investments' (as amended by Communiqué 'A' 7018) the following assets can be used to determine the floating performance of the investment: (1) national government securities; (2) certain kind of foreign government securities (i.e., Brady series issued by Brazil, US Treasury Bonds, etc.); (3) stock indices, such as Merval, Dow Jones, Bovespa, among others; (4) commodities (i.e., corn, wheat, Brent, etc.); (5) interest rates (i.e., LIBO or BADLAR); (6) currencies (e.g., the US dollar and the euro); and (7) UVA variations.

28 As discussed below, foreign exchange controls were reinstated as from 1 September 2019.

29 BCRA's reinstated text regarding the 'Prevention of Money Laundering, Financing of Terrorism and Other Illicit Activities' (as amended by Communiqué 'A' 6709), and Title XI of the CNV Rules.

30 The taxation of financial income has been subject to several amendments in the past years. For purposes of this chapter we shall review the tax rules in force following the publication on 23 December 2019 of Law No. 27,541.

31 Financial trusts can issue debt securities and mutual funds can issue fixed-income units.

32 Section 24 of Decree No. 862/19 sets forth a list of jurisdictions considered as 'Non-Cooperating'.

33 The disposition should take place in an Argentine stock markets authorised by CNV.

34 Argentina has tax treaties in force with the following jurisdictions: Australia, Belgium, Bolivia, Brazil, Canada, Chile, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Russia, Spain, Sweden, Switzerland, the United Kingdom, Mexico, United Arab Emirates and Uruguay (through an information exchange treaty that contains clauses for avoidance of double taxation). Agreements entered into with China, Japan, Luxembourg, Qatar, Austria and Turkey, are not effective to date.

35 UVA/UVI would qualify as such clauses.

36 Who are not Qualifying Non-resident Beneficiaries.

37 Section 98 of the ITL, Section 250 of Decree 862/19 and Section 10 of General Resolution 4,227/18.

38 This rate shall be reduced to 25 per cent for fiscal periods beginning as of 2021.

39 Section, 26, sub-paragraph h).

40 Section 108, sub-paragraph a).

41 Communiqué 'A' 6844 of the BCRA, as amended and supplemented by several subsequent Communiqués issued by the BCRA.

4243 The Criminal Exchange Law No. 19,359 (as amended) provides fines of up to 10 times the amount of the operation in infraction for the first infraction, fines of three to 10 times the amount of the operation in infraction or prison of one to four years in the case of first recidivism and prison of one to eight years plus the maximum of the applicable fine in the case of second recidivism. Furthermore, the Criminal Exchange Law establishes that the directors, legal representatives, chief executives, managers, and members of the surveillance committee who take part in the transaction are jointly and severally responsible for the fines.