Banking Restrictions in Argentina - The "corralito"

Introduction

Prior to the resignation to their positions, former President De la Rúa and the former Minister of Economy, Domingo F. Cavallo issued a series of restrictions on the withdrawal of cash and the export of foreign currency.

Decree 1570/2001 of the National Executive Power which introduced this new regime was published in the Official Gazette (“O.G.”) on Dec.3, 2001. Decree 1570/2001 was then supplemented and regulated by Decree 1606/2001 (O.G. Dec. 6, 2001), Decree 1638/2001 (O.G. Dec 12, 2001), Resolutions of the Ministry of Economy 850/2001 (O.G. Dec. 17, 2001) and 863/2001 (O.G, Dec.19, 2001), and by resolutions of other governmental entities, in particular numerous communications and telephone announcements of the Central Bank of the Republic of Argentina (“BCRA”). At the end of this article there is a transcription of the above mentioned Decrees and Resolutions of the Ministry of Economy.

Under Decree 1570/2001, this new regime of restrictions would be in force as from Dec. 1, 2001 until completion of the international tranche of the exchange of public debt set forth by Decree 1387/2001. Theoretically, this should occur within a term of 90 days. However, it should be noted that the rule does not provide any specific term in days. Furthermore, in view of the recent events, there is also no certainty as to what will happen with the above cited international debt exchange.

The legislature provisionally designated Adolfo Rodríguez Sáa as President, to hold office until March 3, 2002, date fixed for the election of the President who would complete President De la Rúa’s unfinished term of office until December 2003.

President Rodríguez Sáa has not repealed the Decrees creating this new regime, and it is very probable the same will continue in force during his provisional presidency, maybe with some variations.

We must underline, however, that the legal framework that regulates financial entities in Argentina is currently being modified on a daily basis. Future modifications may result in a significant change of the regulations described herein.

Restriction to the Withdrawal of Deposits

The new regime prohibits the withdrawal of more than 250 dollars or pesos per week in cash in respect of all the accounts held by each holder or by the holders of joint accounts with each financial entity. As an exception, this amount was increased to 500 dollars or pesos for one week on account of the end of the year holidays.

The regime sets forth certain withdrawals which are excluded from this weekly cash limit. These exclusions include, among other things (i) salaries and pensions up to $1,000 per calendar month, (ii) exchange entities, as necessary for their normal functioning, (iii) funds “deposited in cash” after Dec. 3, 2001, and (iv) other transactions authorized by the BCRA.

These restrictions of withdrawal of deposit are aimed at increasing the “bancarization” of payments in Argentina, in accordance with the policy introduced by Law 25,435, amended by Law 25,413, which prohibits the use of cash in transactions for amounts exceeding $1,000.

Transfer of funds to other countries

The general rule is that the transfer of funds to other countries is prohibited. This prohibition is not absolute. The rule provides several exceptions, and leaves open various alternatives which may be used.

The exceptions to such prohibition include transactions corresponding to (i) foreign trade transactions; (ii) the payment of expenses or withdrawals made in other countries by means of credit or debit cards issued in the country; (iii) funds entered to the country after Dec. 3, 2001; or (iv) transfers through financial institutions to settle purchases of government securities to participate in the exchange of public debt, to the extent the securities are deposited with Caja de Valores.

The export of foreign currency bills and coined precious metals is also prohibited unless the corresponding transactions (i) are effected through financial institutions and with the prior authorization of the BCRA, or (ii) do not exceed $10,000.

Communication A 3382 of the BCRA regulating this matter, later amended by Communication A 3394, makes a distinction among (i) excluded transfers, (ii) automatically authorized transfers and (iii) transfers subject to the prior authorization of the BCRA.

Excluded transfers include those that were already exempt from the restriction by virtue of Decrees 1570/2001 and 1606/2001, with some clarifications and significant limitations to the dispositions of such Decrees in connection to the availability of funds entered after Dec. 3, 2001 and foreign trade transactions.

Automatically authorized financial transfers included, among others, transactions such as (i) public debt servicing and commissions, (ii) settlement of purchases of securities in other countries through Argenclear, and (iii) payment of compensations and reinsurance abroad. By means of Communication 42237, the above mentioned automatic authorization was suspended and therefore these transactions would currently require BCRA’s prior authorization.

If the transfer transaction does not fall within any of the above categories, it may still be carried out with the prior authorization of the BCRA.

The Schedule to Communication A 3382, amended by Communication A 3394, lists the transactions that could be carried out with the prior authorization of the BCRA. The list is long, and includes, among other transactions, financial transfers made in respect to (i) remittances of funds deposited in time deposits and checking accounts; (ii) the proceeds from the sale of property in the country by persons residing abroad; (iii) private debt servicing; (iv) provincial and municipal public debt servicing, and (v) reposition of collateral margin of derivative transactions.

It should be noted that the list is not restrictive, as in the last item it refers to “other concepts not expressly contemplated herein”. This implies that the prior authorization of the BCRA could be requested to perform any transfer of funds to other countries, even if its purpose is not specifically mentioned therein.

The request for authorization must be submitted to the financial entities where the funds to be transferred are deposited. The institutions are responsible for accepting the requests, gathering the information they deem appropriate and verifying the legitimacy of the transaction and that it properly fits into the legal regime. As a precondition to start the necessary formalities, the transferor shall provide evidence that it is current in the payment of its tax and social security obligations, if it is so required by the Federal Administration of Public Revenues.

By means of Communication 33489, the BCRA specifically authorized transfers by financial institutions for: (i) the servicing negotiable obligations held by the transferor and due in December; (ii) the remargining and the settlement of repurchase agreements due in December 2001; and (iii) the interest of credit facilities granted by correspondent banks abroad. This authorization was latter suspended by Communication 42237.

Foreign trade transactions

The new regime does not include any obligation to deposit funds in the financial system, except in the case of the proceeds from the export of goods.

The obligation of entering to the country the proceeds in foreign currency from exports has been reinstated, which requirement is fulfilled by depositing the foreign currency in an account of the exporter with an Argentine financial institution, without it being necessary to trade them in the exchange market or to convert them to any currency. The rate of exchange used for the conversion would be the bid rate of exchange of Banco de la Nación Argentina. In the technical legal aspect, this reform was implemented by Decree 1606/2001, which sets forth the repeal of Decree 530/1991, and reinstates Section 1 of Decree 2581/1964 and Section 10 of Decree 1555/1986. These two Decrees of the years 1964 and 1986 which are again in force, had been repealed by Decree 530 of the year 1991, which has been now been repealed by Decree 1606/2001.

Decree 1638/2001 then excluded exporters from the obligation to enter foreign currency, when such funds are used for the settlement of obligations undertaken abroad: (a) to finance investment projects; (b) to pre-finance exports; (c) to coordinate structured loans; (d) to secure or guarantee financial transactions; (e) to cancel financial commitments of exporters; or (f) in other cases determined by the Federal Administration of Public Revenues. These exclusions from the scope of application of Decree 1638/2001 were latter limited by Communication A 3394, which sets forth that these exclusions will only apply to transactions that were already in course as of Dec. 6, 2001 and as of other dates specified in such Communication.

Other Restrictions

Below there are other provisions of the Decrees referred to above:

(a) Financial entities may not make loans in pesos.

(b) Financial entities may hold deposits in pesos, but they cannot offer in respect of such deposits rates higher than those offered for deposits denominated in U.S. dollars.

(c) As from Dec. 3, 2001, depositors may request the conversion of their deposits into U.S. dollars at the rate of 1 peso = 1 U.S. dollar.

(d) Financial institutions may not charge any fee for peso-U.S. dollar conversions.

(e) Financial institutions may not (a) hinder the transfer or disposal of funds between accounts of the same or other entity, and (b) charge any fee for the electronic transfer of funds between such accounts.

(f) Electronic payment services have been declared “public services subject to regulation, to guarantee that they can be used at reasonable prices and the free access of new users, as well as the interconnection of networks, in order to ensure competition and the provision of the service”.

(g) Financial institutions may not participate in the futures and options market in foreign currency and directly or indirectly perform arbitrage transactions with time assets in pesos.

Legal Force

The National Executive Power has issued the Decrees we are commenting on in exercise of the powers granted by Section 99, Sub-section 3 of the National Constitution, which authorizes the issue of Necessity and Urgency Decrees when given extraordinary circumstances, it is not possible to follow the ordinary procedures set forth in the National Constitution. Section 99, Sub-section 3 was one of the amendments made to the National Constitution in 1994. Before 1994, the Supreme Court had supported the validity of this kind of Decrees of Necessity and Urgency in the case entitled “Peralta, Luis A. y otro c. Estado Nacional, Ministerio de Economía – B.C.R.A.” (Fallos: 313:1513). For more information on this case, see the article “Intangibility of Deposits” published in Marval News, Number 2, November 2001.

For a unification of the defense of the new regime, the Ministry of Economy issued Resolutions 850/2001 and 863/2001. Resolution 850/2001 provided that financial institutions should in no event accept any court orders annulling, restricting or in any way altering the provisions of Decree No. 1570/2001, as amended, conditioning the fulfillment thereof to the prior intervention of the National Government through the Ministry of Economy. Resolution 850/2001 provided that the financial institution has the obligation to notify any court order of this kind to the Ministry of Economy within 12 hours of having been received, and the Ministry of Economy will then inform to the financial entity if the court order is still in force.

Resolution 850/2001 presented an evident conflict of constitutional powers, as it subordinated the performance of judicial resolutions to the prior approval of the Executive Power through the Ministry of Economy. Resolution 863/2001 was then issued to moderate this conflict, providing that Resolution 850/2001 does not prevent financial institutions from “complying with the court orders referred to therein, having in each case to previously verify if the court order is still in force”.

Finally, it should be highlighted that it may be sustained that this regime breaches Bilateral Treaties for the Promotion and Protection of Investments entered into with several nations, which would have the same rank as the laws in force.

Final Comment

After the presidential renovation and given the current political, economic and social crisis prevailing in Argentina, there is expectation that imminent changes will be introduced to several rules, although there is still no certainty as to which will be the nature of such changes.

The restrictions on the withdrawal of cash and the export of foreign currency described herein will probably continue in force at least until the presidential elections of March 3, 2001.

We underline once again, that the legal framework that regulates financial entities in Argentina is currently being modified on a daily basis. Future modifications may result in a significant change of the regulations described herein.

FINANCIAL INSTITUTIONS
Decree 1570/2001

Limitation to dollar and peso deposits withdrawals from Argentine banks and certain transfers of funds abroad

Bs. As., December 1, 2001

Section 1 - While this Decree is effective, the institutions subject to the Superintendency of Financial and Exchange Institutions of the Central Bank, shall apply the following rules in their transactions:

a) They shall be forbidden from making Peso denominated loans, operate in the foreign currency futures or options markets, or arbitrate, directly or indirectly, with term assets in Pesos. With the consent of the debtor, any Peso transactions in effect may be converted into U.S. Dollars at the exchange rate provided in the Convertibility Law.

b) They shall be forbidden from offering higher interest rates for Peso denominated deposits than those offered for U.S. Dollar denominated deposits. At the request of their holders, current transactions may be converted into foreign currency at the exchange rate provided in the Convertibility Law.

c) They shall be forbidden from charging any fees for the conversion of Pesos received in connection with any type of transaction, deposit, payment, transfer, etc., into U.S. Dollars at the exchange rate provided in the Convertibility Law, or in the conversion of U.S. Dollars into Pesos, provided that such conversions are carried out through accounts held with such financial institutions.

Section 2 - The following transactions are forbidden:

a) withdrawing cash in excess of two hundred and fifty Pesos or U.S. Dollars per week by the holder (of the bank account) or holders who sign jointly or separately, from the whole of their bank accounts in each financial institutions;

b) transfers of funds abroad, except for those that correspond to foreign trade transactions, to the payment of expenses or withdrawals made abroad by means of credit or debit cards issued by Argentine banks, or to the payment of financial transactions, in this latter case subject to Central Bank authorization.

Section 3 - The Central Bank may reduce the restrictions provided in the preceding section when the aggregate balances of the deposits of the financial system increase with respect to those at the closing of September 30, 2001, and the interest rates at which the different transactions are carried out are, in its opinion, normal.

Section 4 - Sight or time deposits, transfers among financial entities, renewals, account debits, issuance or crediting of checks, use of credit or debit cards, and in general all types of banking transactions that do not imply the reduction of funds within the financial system governed by Law No. 21,526, even if they result in transfers among financial institutions, remain intangible in the terms provided by Law No. 25,466.

Section 5 - While this Decree is effective, (financial) institutions shall not be allowed to neither hinder the transfer or disposition of funds among accounts, whichever is the institution that receives them, nor to charge any commission for the electronic transfer of funds among them carried out for the order and account of their clients.

Section 6 - Debtors classified in category 3 according to Central Bank regulations must obtain the prior consent of the creditor entity to carry out the payment of operations provided by Sections 30 (a), and 39 of Decree No. 1387/01. Debtors classified in categories 1 and 2 shall have the same possibility, provided they obtain the prior consent of the creditor institution.

Section 7 -The export of foreign bank notes and coins is forbidden, except when carried out through Financial and Exchange Institutions previously authorized by the Central Bank, or unless they do not exceed one thousand U.S. Dollars or its equivalent in other currencies, at the offered exchange rate determined by Banco Nacion.

Section 8 - The Central Bank shall be the implementation authority of this Decree. It may issue any rules necessary to insure that all the country’s inhabitants may use and dispose of their financial assets, open savings accounts and obtain debit cards, or other means provided in this Decree, and regulate the conditions and maximum costs at which the relevant institutions shall be required to render the service.

Section 9 - This Decree is considered to be public policy and shall be in force from the date hereof until midnight of the day following the closing of the public debt exchange provided in Section 24 of Decree No. 1387/01.

Section 10 — Be it notified to the Honorable National Congress.

Section 11 — Be it notified, published and delivered to the National Bureau of the Official Register, and subsequently filed. — DE LA RUA. — Colombo. —Cavallo. — Mestre. – Rodríguez Giavarini. – Lombardi. – Héctor J. Lombardo. – Sartor. – Delich. – Bastos. –Jaunarena. – Dumón

FINANCIAL INSTITUTIONS
Decree No. 1606/2001

Certain transactions which can only be carried out in cash will be excluded from the scope of application of Decree No. 1570/2001, and the B.C.R.A. (Central Bank of the Republic of Argentina) will be authorized to take the same measure in other cases that may arise. The amount of notes and foreign currency and coined precious metals to be exported will be increased.

Bs. As., December 5, 2001

HAVING SEEN Decrees No. 2581 of April 10, 1964, No. 1555 of September 4, 1986, No. 530 of March 27, 1991, No. 1387 of November 1st, 2001 and No. 1570 of December 1, 2001, and

CONSIDERING:

That it is convenient to exclude from the scope of application of Decree No. 1570/2001 certain transactions which can only be carried out in cash and to authorize the Central Bank of the Republic of Argentina to take the same measure in other cases that may arise;

That it is convenient to amend Section 7 of Decree No. 1570/2001, increasing to TEN THOUSAND U.S. DOLLARS (US$ 10,000) or its equivalent in other currencies the authorization to export notes and foreign currency and coined precious metals;

That it is necessary to declare that electronic payment systems are public services subject to regulation, to guarantee that they can be used at reasonable prices and the free access of new users, as well as the interconnection of networks, in order to ensure competition and the provision of the service, designating an authority of application therefor, which will issue adequate rules for the provision of a better service;

That it is necessary to repeal Decree No. 530/91 which annulled the obligation of liquidating the foreign currency derived from exports in the national financial system, and the condition precedent of such liquidation to access to any benefit or reimbursement of taxes in connection with export transactions;

That the making of payments by electronic systems is a collective necessity of the population, which compromises the public interest and which, being a public service, must be subject to regulation by the National Government;

That given the necessity and urgency with which the emergency has to be addressed, it is not possible to wait the time required by the ordinary procedures set forth in the National Constitution for the enactment of laws;

That the General Direction of Legal Affairs of the Ministry of Economy has participated in this matter as appropriate.

That this measure is taken according to the powers granted by Section 99, Sub-sections 1, 2 and 3 of the National Constitution.

NOW, THEREFORE,
THE PRESIDENT OF THE REPUBLIC OF ARGENTINA, WITH THE GENERAL AGREEMENT OF MINISTRIES DECREES AS FOLLOWS:

Section 1 – The following transactions will be excluded from the scope of application of Section 2, paragraph a) of Decree No. 1570/01:

(a) cash withdrawals necessary to pay salaries not paid through banks, pursuant to the laws in force;

(b) cash withdrawals necessary to make pension payments or to pay retirement benefits by non banking entities charged with their administration, pursuant to the laws in force;

(c) cash withdrawals corresponding to salaries, retirement payments, pensions and other social benefits deposited in savings accounts specially opened for that purpose, up to One Thousand Pesos ($1,000) per calendar month;

(d) cash withdrawals corresponding to funds deposited in cash after publication of Decree 1570/01;

(e) other transactions authorized by the Central Bank of the Republic of Argentina.

Section 2 — The following transactions will be excluded from the scope of application of Section 2, paragraph b) of Decree No. 1570/01:

(a) transfers to foreign countries of funds entered to the country after the date of publication of Decree No. 1570/01;

(b) transfers made through financial institutions to settle purchases of Government Securities acquired to perform any of the transactions specified in Title IV of Decree No. 1387/01, as amended, with the obligation to deposit the acquired securities with Caja de Valores S.A. for such purpose.

Section 3 — Section 7 of Decree No. 1570/01 will be replaced by the following:

“SECTION 7 – The export of notes and foreign currency and coined precious metals is hereby prohibited, unless it is made through entities subject to supervision of the Superintendency of Financial and Exchange Institutions with the prior authorization of the Central Bank of the Republic of Argentina, or if the amount of the transaction is lower than Ten Thousand U.S. Dollars (US$ 10,000) or its equivalent in other currencies, at the selling rate of exchange of Banco de la Nación Argentina.

Section 4 — It is hereby declared that electronic payment systems are public services subject to regulation, to guarantee that they can be used at reasonable prices and the free access of new users, as well as the interconnection of networks, in order to ensure competition and the provision of the service. The Ministry of Economy will be the authority of application designated therefor, being able to issue adequate rules in connection therewith;

Section 5 — Decree No. 530/91 is hereby repealed, being Section 1 of Decree No. 2581/64 and Section 10 of Decree No. 1555/86 in full force and effect.

Section 6 — Be it notified to the Honorable National Congress.

Section 7. — This Decree will be effective as from its publication in the Official Gazette.

Section 8. — Be it notified, published and delivered to the National Bureau of the Official Register, and subsequently filed. — DE LA RUA. — Chrystian Colombo. — Domingo F. Cavallo. — Ramón B. Mestre. – Adalberto Rodríguez Giavarini. – Hernán S. Lombardi. – Héctor J. Lombardo. – Daniel A- Sartor. – Andrés G. Delich. – Carlos M. Bastos. – José H. Jaunarena. – José G. Dumón

FINANCIAL INSTITUTIONS
Decree No. 1638/2001

Rules to funnel foreign trade funds through the financial system. Exceptions. Decrees No. 2581/64 (Section 1) and 1555/86 (Section 10).

Bs. As., December 11, 2001.

HAVING SEEN Decrees No. 2581 of April 10, 1964, No. 1555 of September 4, 1986 and No. 1606 of December 5, 2001, and

CONSIDERING:

That by means of Section 5 of Decree No. 1606/01 Section 1 of Decree No. 2581/64 and Section 10 of Decree No. 1555/86 have been reinstated;

That it is convenient to adapt the terms of the exchange controls existing as of the date of publication of the decrees that have been reinstated to the present need of funneling foreign trade funds through the financial system without affecting the foreign trade or its international financing;

That the General Direction of Legal Affairs of the Ministry of Economy has participated in this matter as appropriate;

That this measure is taken according to the powers granted by Section 99, Sub-section 1 of the National Constitution;

NOW, THEREFORE,
THE PRESIDENT OF THE REPUBLIC OF ARGENTINA
DECREES AS FOLLOWS:

Section 1 – The entry and trading of foreign currency set forth in Section 1 of Decree No. 2581/64 and the trading thereof set forth in Section 10 of Decree No. 1555/86 will be considered duly made by means of the entry of the corresponding foreign currency and its debit in the exporter’s account opened with an entity subject to supervision of the Superintendency of Financial and Exchange Institutions of the Central Bank of the Republic of Argentina, being its trading in the exchange market or its conversion to any other currency, whether national or foreign, not necessary.

Section 2 — The Central Bank of the Republic of Argentina will exempt exporters from entering the foreign currency if same is used for the settlement of obligations undertaken abroad to:

(a) finance investment projects;

(b) pre-finance exports;

(c) coordinate structured loans;

(d) secure or guarantee financial transactions;

(e) cancel financial commitments of exporters.

Section 3 — The obligation to enter foreign currency does not apply to the activities which have been especially exempted by law, by an agreement with the National Government or by prior decrees, and to the extent of such exemption.

Section 4 — The Federal Administration of Public Revenues, autarchic entity of the Ministry of Economy, and the Trade Secretary, which depends on such Ministry, may, by means of a joint resolution, determine exemptions to the requirement set forth by Section 10 of Decree No. 1555/86.

Section 5 — The Trade Secretary of the Ministry of Economy and the Central Bank of the Republic of Argentina, each within their own jurisdiction, will be the Authority of Application of this Decree, being able to issue the corresponding rules for its application or construction.

Section 6. — This Decree will be effective as from its publication in the Official Gazette.

Section 7. — Be it notified, published and delivered to the National Bureau of the Official Register, and subsequently filed. — DE LA RUA. — Chrystian Colombo. — Domingo F. Cavallo.

Ministry 0f Economy
FINANCIAL INSTITUTIONS
Resolution No. 850/2001

Regime for the treatment of court orders annulling, restricting or in any way altering the provisions of Decree No. 1570/2001, as amended and supplemented, by the entities subject to the supervision of the Superintendency of Financial and Exchange Institutions of the Central Bank of the Republic of Argentina

Buenos Aires, December 14, 2001.

HAVING SEEN Decree No. 1570 of December 1, 2001, as amended and supplemented, and

CONSIDERING:

That on account of the issue of the above cited Decree, which imposed temporary restrictions on cash withdrawals and international transfers and also prohibited the export of notes and foreign currency, numerous legal actions have been filed with the Federal Courts seeking the issue of precautionary measures for the suspension of such Decree’s application;

That for an efficient defense of the National Government by this Ministry, there has to be a unification of the procedures to be implemented by the entities subject to the supervision of the Superintendency of Financial and Exchange Institutions of the Central Bank of the Republic of Argentina which are notified of a precautionary measure annulling, restricting or to some extent altering the scope of any of the provisions contained in Decree No. 1570/01;

That for such purpose a regime will be herein established for the treatment of court orders by such entities, providing for the immediate notification of any such order to this Ministry, in order for the National Government to have the corresponding participation in the judicial proceedings under which same has been issued;

That to set forth such regime, it is necessary to take into account the legal effect of precautionary measures. In this sense, it is convenient to refer to Section 15 of Law No. 16,588, which allows to appeal against resolutions “... providing for the issue of an order to stay or the suspension of the effects of the act challenged...” and in the event the appeal is granted, it must be done with both effects;

That it is also worth mentioning what has been resolved by the Supreme Court of Justice of the Nation on October 23, 2001 on the case “Central y Otros c/Estado Nacional (Poder Ejecutivo National) s/recurso de hecho “, where it is sustained that “... the filing of a federal extraordinary appeal suspends the enforcement of the challenged decision until the court decides if it is granted or denied”;

That the General Direction of Legal Affairs has participated in this matter as appropriate;

That this measure is taken according to the provisions of the Law of Ministries (text amended by Decree No. 438/92), amended by Laws No. 24,198 and 25,233;

NOW, THEREFORE,
THE MINISTER OF ECONOMY
RESOLVES AS FOLLOWS:

Section 1 – To set forth a regime for the treatment of court orders annulling, restricting or in any way altering the provisions of Decree No. 1570/2001, as amended and supplemented, by the entities subject to the supervision of the Superintendency of Financial and Exchange Institutions of the Central Bank of the Republic of Argentina, according to the following guidelines:

(a) All entities subject to the supervision of the Superintendency of Financial and Exchange Institutions of the Central Bank of the Republic of Argentina which are notified of a precautionary measure annulling or to any extent restricting the prohibitions imposed by Decree No. 1570/01 shall immediately notify such circumstance by a reliable method to the Ministry of Economy, in order for the National Government to have the corresponding participation in the judicial proceedings under which same has been issued. Such notice may be directly addressed to the General Direction of Legal Affairs of the Ministry of Economy or may be sent through the Superintendency of Financial and Exchange Institutions of the Central Bank of the Republic of Argentina;

(b) These entities shall establish an internal regime whereby the agency receiving the court order shall inform thereof to its governing authorities or the officer designated for such purpose, having the obligation to serve – within the maximum term of twelve (12) hours – the notice described in the preceding paragraph;

(c) The Superintendency of Financial and Exchange Institutions of the Central Bank of the Republic of Argentina will forthwith inform of this resolution to all entities subject to its supervision, so that it can be effectively complied with;

(d) The entities subject to the supervision of the Superintendency of Financial and Exchange Institutions of the Central Bank of the Republic of Argentina shall in no event accept the court orders, the performance of which will be conditioned to the prior intervention of the National Government in the proceedings under which same have been issued. The General Direction of Legal Affairs of the Ministry of Economy shall inform to the entity that has received the precautionary measure if same is in force.

(e) The above mentioned entities shall answer to the court which has notified the precautionary measure that this Resolution is being complied with.

Section 2 — Be it notified, published and delivered to the National Bureau of the Official Register, and subsequently filed. — Domingo F. Cavallo.

Ministry of Economy
FINANCIAL INSTITUTIONS
Resolution No. 863/2001

Rule clarifying Resolution No. 850/2001, which sets forth a regime for the treatment of court orders annulling, restricting or in any way altering the provisions of Decree No. 1570/2001, as amended and supplemented, by the entities subject to the supervision of the Superintendency of Financial and Exchange Institutions of the B.C.R.A. (Central Bank of the Republic of Argentina)

Buenos Aires, December 18, 2001.

HAVING SEEN Resolution of the Ministry of Economy No. 850 of December 14, 2001, and

CONSIDERING:

That such Resolution sets forth a regime for the treatment of court orders annulling, restricting or in any way altering the provisions of Decree No. 1570/2001, as amended and supplemented, by the entities subject to the supervision of the Superintendency of Financial and Exchange Institutions of the Central Bank of the Republic of Argentina;

That in the framework of such regime the General Direction of Legal Affairs of this Ministry has received numerous consultations in connection with the interpretation of the above cited Resolution;

That as a result of the above, it is necessary to issue a rule clarifying the terms of such Resolution;

That the General Direction of Legal Affairs has participated in this matter as appropriate;

That this measure is taken according to the provisions of the Law of Ministries (text amended by Decree No. 438/92), amended by Laws No. 24,198 and 25,233;

NOW, THEREFORE,
THE MINISTER OF ECONOMY
RESOLVES AS FOLLOWS:

Section 1 – Section 1, paragraph (d) of Resolution of the Ministry of Economy No. 850 of December 14, 2001 is hereby clarified, in the sense that such provision does not prevent the entities subject to the supervision of the Superintendency of Financial and Exchange Institutions of the Central Bank of the Republic of Argentina from complying with the court orders referred to therein, having in each case to previously verify if the court order is still in force.

Section 2 — Be it notified, published and delivered to the National Bureau of the Official Register, and subsequently filed. — Domingo F. Cavallo.