Suspension of fines and closure of bank accounts for the issuance of bounced checks

Decree No 312/2020 (the “Decree”) was published in the Official Gazette on 25 March 2020. The Decree establishes the suspension of closure and block of bank accounts and fines set out in law No 25,730 (the “Law”).

Section 1 of the Law provides for fines equivalent to 4% (between AR$100 and AR$, 50,000), closure and block of bank accounts owned by those issuers of checks bounced due to lack of funds, issued without authorization to overdraft or having formal defects. The Decree suspends the application of such sanctions until 30 April 2020.

Along in the same line, the Argentine Central Bank issued Communication “A” 6950 (the “Communication”) by means of which:

• It adds 30 days to the term to submit common or deferred payment checks expired during the period set out in the Decree, whether issued in Argentina or abroad.

 

• It provides for a second submission of checks bounced due to lack of funds. This regulation is not applicable for checks issued by electronic means or using ECHEQ system.

The Communication also establishes that financial entities will not be authorized to charge commissions to their clients in relation to bounced checks.

The recitals of the Decree state that the measures taken have as main objective not to exacerbate the situation of individuals or companies already affected by the current economic scenario, which will inevitably lead to a rise in the issuance of bounced checks due to lack of funds.