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2.1 Legislation on trade and investment

Argentina's trade-related legislation mainly consists of its Customs Regulations, and acts and decisions governing export refunds, bonded zones' imports, trade remedies, and commodity inspection.

Argentina's legislation governing investment includes Executive Order No.1853/1993 issued in 1993, Foreign Investment Act No.21382 promulgated under the said Executive Order, and investment-related aspects of the Constitution of Argentina and the Business Association Law No. 19550.

2.2 Trade administration

Argentina acceded to the GATT, the predecessor of the WTO, as early as October 1967. Under the joint efforts of Argentina, Brazil, Paraguay, and Uruguay, MERCOSUR was formed in 1991. Argentina enjoys a considerably liberalized domestic market and has hardly any special restrictions in its trade with other countries.

2.2.1 Tariff system

Argentina's tariffs average approximately 12.7 percent. Import duties are classified into ordinary and special customs duties. The latter mainly apply to the imports from the member countries of the free trade area within MERCOSUR. As a customs union, MERCOSUR plans to implement full CET product coverage in 2006. Presently, the ordinary customs duty is applied to Chinese imports.

In addition, a 21 percent VAT and a 9 percent additional VAT are levied on imports. Both of the VATs are imposed on the CIF prices of the import commodity, and VAT must be paid before the dutiable commodity passes the customs. After selling out the said commodity, the importer may have the amount of the tax paid deducted from the total amount of taxable VATs. However, VAT is not imposed on such imports as personal and household goods, samples, mails, and articles to be used by national, provincial and municipal governments and their affiliates.

2.2.2 Import administration

Argentina bans the import of worn garments, used tires, modified auto parts, second-hand or repaired medical equipment. Besides, prior governmental approval shall be obtained for the importation of cotton seeds, potatoes to be used as seeds, fresh fishes, vegetables, dry nuts, hard nuts, drummed apples, livestock, unplucked poultry, eggs, salted fishes, dried fishes, pesticides, goods for domestic animal use, foodstuffs, pharmaceuticals, explosives, firearms, ammunitions, plants and related products, tobacco and glucides.

Quotas must be obtained for imported automobiles while pulp, paper products and certain selected goods are subject to provisional import quotas. Except for automobiles, imports are generally not subject to import licensing.

2.3 Investment administration

Foreign investors enjoy the same legal treatment as nationals do in economic activities, and they can adopt any business forms allowed by the Argentine legislation. The forms of business organizations may include corporations, limited liability partnerships, branches of foreign corporations, joint ventures, temporary partnerships, temporary union of companies, etc.

Foreign companies may invest in Argentina without prior approval. Except for military areas and military facilities, foreign companies may carry out economic activities such as industrial, mining, agriculture, commercial, financial, service, and other activities related to the production or exchange of goods and services. Foreign investors may at any time repatriate their capital and remit their liquid earnings and realized profits abroad.

Foreign investment is encouraged in Argentina. Both domestic and foreign investors may enjoy General Incentives, Sectoral Incentives and Regional Incentives that are adopted to promote productive development and investments.

2.4 Competent authorities

Argentina's foreign trade is in the charge of the Ministry of Economy and Production. The subordinate Secretariat of Industry, Commerce and Small and Medium Companies is responsible fo r the enactment of the disciplines and surveillance over the implementation thereof. Under the Secretariat there is an Office of State Under-Secretary of Foreign Trade that deals with the routine affairs involved in foreign trade. Argentina's national customs is also an enforcement body of the regulations and policies governing foreign trade. The Ministry of Foreign Affairs is in charge of the negotiations on economic and trade affairs between governments, while the Department of International Economic Negotiation participates in the negotiations.

With respect to investment administration, the Secretariat of Industry, Commerce and Small and Medium Companies is also responsible for the implementation of the Foreign Investment Law. The subordinate Investment Promotion Agency mainly functions to identify trade opportunities in different sectors and regions, to provide and publish information on investment, and to promote investment in Argentina in collaboration with other relevant countries and its provincial administrations.