The Challenge of Remitting Funds from Argentina: How to Recover Overdue Royalties Cross-Border?
A U.S. company faces the dilemma of an Argentine client unable to remit overdue royalties due to local currency controls. The text mentions a scheme involving the purchase of Argentine dollar bonds and resale to the U.S. market to obtain dollars, but this scheme involves a discount of approximately 40%-50%, and the company lacks a local entity in Argentina to receive pesos, making operations difficult. The author hopes to obtain advice from those with similar experience.
We have several clients located in Argentina who still owe overdue royalty invoice payments to our US company. Due to Argentina's current currency control regulations, these clients are unable to transfer funds abroad. One alternative we have obtained is to use pesos to purchase US dollar-denominated bonds issued by Argentine issuers, and then immediately resell them in the US market (such as the New York Stock Exchange) to obtain US dollars. This process needs to be executed through brokers and typically incurs a cost loss of about 40% to 50%. In addition, we do not have a physical entity in Argentina to receive pesos first, so implementing this plan in practice faces significant difficulties. May I ask if any other peers have handled similar situations and can provide relevant experience or advice? Thank you very much!