Argentina creates new agency to track trade, slow dollar flight
BUENOS AIRES Nov 17 (Reuters) - Argentina tightened its international trade controls on Monday by creating a new government agency to keep track of imports and exports two weeks after accusing U.S. household products giant Procter & Gamble Co of tax fraud.
Early this month Argentina said the company hid income and over-billed $138 million in imports to get money out of the country, which three years ago introduced stringent capital controls to protect its dwindling foreign reserves.
The government published a decree on Monday creating the Trade Operations Tracking Unit. The new agency will "verify the price and quantity of goods and services exported and imported, along with the inflow and outflow of foreign exchange," the decree said.
International reserves held by Argentina's central bank have fallen 7.6 percent so far this year to $28.3 billion.
Cut off from the global bond market due to repeated debt defaults and interventionist policies that have slowed the economy to a standstill while inflation rages at an estimated 40 percent, Argentina relies on its reserves for financing.
Cincinnati-based P&G, the maker of Gillette razors and Tide detergent, denied wrongdoing and has entered talks with the Argentine government over the allegations of tax evasion.
The company, which runs three manufacturing plants and two distribution centers in Argentina, says its Argentine operations contribute about 1 percent to its overall sales.
Argentina has also accused a handful of local banks and international grains exporting companies of tax evasion charges similar to those lodged against P&G. (Reporting by Walter Bianchi; writing by Hugh Bronstein; Editing by Chizu Nomiyama)
© Thomson Reuters 2017 All rights reserved.