ABC To Export: Argentina – Part 1

What is an export?

An export is the shipment of a product or service to a foreign country for commercial purposes, with regulations given by a series of legal provisions and tax controls that act as a contextual framework for commercial relations between countries.

According to the Argentine Customs Code, an export is the extraction of any merchandise from a customs territory, understood as the entire land, water and air area subject to the sovereignty of the Argentine Nation, as well as in the enclaves established in its favor, in where the same tariff system and economic prohibitions are applied.

Why export?

Although exporting is a process that requires investment, use of resources, management, planning, effort and patience, there are many benefits that are achieved with this activity, including:

  • Growth: it is a great opportunity for the expansion and growth of your company, which translates into new sales and new customers.
  • Increase in business prestige: enhance the image that suppliers, banks, institutions and clients have of your company.
  • Risk diversification: faced with difficulties in the domestic market, being an exporter you are in a better position compared to those companies that only focus on the local market.
  • Reduction of idle capacity: when you sell internationally, the production process is usually carried out with much more efficient decisions and you take advantage of any advantage to the maximum, stimulating the use of resources and materials.
  • Reduction or elimination of seasonal differences in domestic demand: you can export to markets that are counteracting the domestic market and thus keep your production and business unchanged during the year.
  • Improve the capabilities of the company: one of the natural consequences of being an exporter is the improvement of your product or service and internal processes due to the demands set by international markets.

Can my company export?

For your company to be legally authorized to export, you have to register as an exporter / importer in the Foreign Trade Operators Registry of the AFIP (in the case of Exporta Simple, it is not necessary to register in this registry). The registration is processed only once and allows you to operate as an importer or exporter in all customs in the country.

To carry out the procedure you have to go to the AFIP website and enter the “Registry System” service. Then, in person at customs, you will have to present the supporting documentation and record the biometric data. In this link we leave you more information about the registration procedure.

Once registered, you may have to make some adjustments to the company and the products to comply with the requirements established by Customs.

In the case of products that are going to be marketed abroad, most require the intervention of official bodies that certify their quality, health and that authorize their export, depending on the sector. These certificates are also required by foreign customs.

It is very important that you know the requirements that your product must meet to enter a certain market. Keep in mind that the authority of the country you are exporting to will only allow the entry of the merchandise if it meets the requirements they impose, and they are not always the same as the local customs. In addition, some certifications can have a high cost and you need to know it in time, in addition to knowing financing alternatives to be able to face that expense.

Depending on the product, these are the main agencies involved in an export:

  • Food for human consumption: National Food Institute (INAL).
  • Products, by-products and derivatives of animal and vegetable origin: National Animal Health Service (Senasa).
  • Wines: National Institute of Viticulture (INV).
  • Medicines or products intended for human health: National Administration of Medicines, Food and Medical Technology (ANMAT).
  • Narcotic and psychotropic drugs: Secretariat of Programming for the Prevention of Drug Addiction and the Fight against Drug Trafficking (Sedronar).
  • Flora and Fauna: Secretariat of Environment and Sustainable Development.

What is a tariff position?

The tariff position is a code that identifies the products before customs and is a fundamental requirement to carry out an international sale.

It is an international nomenclature established by the World Customs Organization and is used to classify goods based on a common system. At the global level, the nomenclator is defined according to a six-digit code system accepted by all participating countries that allows standardization of the international language of products, who then establish their own sub-classifications of more than six digits for tariff purposes or of another kind.

The tariff classification allows access to a common worldwide identifier, both for import and export tariffs, and establishes not only the charges that will correspond to the merchandise (and / or level of reimbursements, in the case of exports), but also the Regime that must be applied to the operation that covers said merchandise (interventions, prohibitions, restrictions, statistical reasons, etc.).

The tariff position at the Mercosur level is extended to eight digits to give greater specificity to the coding, and is based on the Harmonized System of Designation and Codification of Goods (SA).

You can check any tariff position in the Foreign Trade Single Window, although it is best to do so through a customs broker to ensure the correct classification of your product.

What are INCOTERMS?

INCOTERMS are a set of rules developed by the International Chamber of Commerce for the correct interpretation of the commercial terms of an international transaction, such as costs and responsibilities of the parties, which regulate:

The scope of the price;

  • When and where the transfer of risks on the merchandise from the seller to the buyer occurs.
  • The place of delivery of the merchandise.
  • Who contracts and pays for the transportation.
  • Who contracts and pays for the insurance.
  • What documents are handled each part and its cost.

What are trade barriers?

Trade barriers are measures adopted by countries to protect national economies and their societies for the purpose of:

  • Protect the population in matters of health (for example, with health certificates) to guarantee the quality and safety of the products.
  • Support the national producer allowing him to compete equally with imported products.
  • Protect public safety, regulating or prohibiting the entry of products that represent a danger in social matters.
  • Allow revenue collection for state plans.
  • Encourage national production.
  • Some examples of trade barriers are tariffs, quotas, reference prices, import licenses and sanitary permits, among others. Trade barriers can be tariff and non-tariff.

Although tariff barriers are the most visible economic measures, in recent times non-tariff barriers have increased, such as the implementation of stricter regulations for the entry of certain products due to global behavior that tends towards tariff liberalization.

Tariff barriers: the tariff to be paid, depending on the destination of the merchandise, is general or preferential. If the destination country does not have a preferential agreement with Argentina, the general tariff is paid. If the destination country has an agreement with Argentina and the merchandise complies with the origin regime, it pays the preferential tariff.

The tariff can take different forms:

  • Ad valorem duty: it is the application of a percentage on the value of the merchandise.
  • Specific right: it is a fixed rate that is applied to the merchandise, it is expressed in monetary terms per unit of measure.
  • Compound law: it is the combination between the previous two.

If you need more information on customs duties by tariff position, you can consult the MACMAP, a United Nations tool that allows you to know the tariff barriers of any country for any product.

Non-tariff barriers: refers to government regulations that obstruct the free entry of goods to a given country, establishing entry requirements for products or services, such as certifications, quotas, import licenses, labeling standards, sanitary prohibitions, obtaining sanitary and phytosanitary permits, authorizations for imports, among others.

They may be:

  • Sanitary barriers: they propose to prevent the entry of merchandise that could damage the health of the population due to the possible content of harmful elements of a physical, chemical or biological nature.
  • Technical barriers: these are the requirements that a certain product must meet in terms of its general structure in order to enter a certain market.
  • Safeguard clauses: these are provisions that temporarily restrict imports of a product to protect a domestic industry. Under the Agreement on Safeguards of the World Trade Organization, rules are established that regulate the application of these measures, the conditions where they come from and the terms in which they can be applied.
  • Dumping: refers to a situation of international price discrimination. The practice of dumping can develop at the initiative of the company itself or through state subsidies, such as when comparing the price of a product in two markets to determine whether there is a difference. In general, dumping cases are more complex and a series of analyzes must be carried out in order to determine the appropriate price in the market of the exporting country (normal value) and the appropriate price in the market of the importing country (export price). in order to be able to make the comparison.

Source: Argentine Investment and International Trade Agency.

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