Risk of “digital blackout”: how barriers to imports can leave Argentine companies without key systems

Storage or processing services in the cloud, specific imported software and even management systems are seeing their payments blocked

The tightening of the conditions to import decided at the end of last month by the Central Bank generates the risk of a “digital blackout” for Argentine companies of all sizes that depend on digital software and services for their daily operation.

The problems experienced by companies from the most diverse fields and that affect payments for hosting services, data storage, management programs and even specific solutions for production processes began when the entity led by Miguel Pesce equated the conditions for the payment of imports of services to those that governed imports of goods, in addition to forcing importers to obtain term financing to carry out operations abroad.

Today, the Chamber of the Argentine Software Industry (CESSI) was in charge of sounding the alarm through a statement. The organization that brings together more than 1,800 companies warned “about the difficulties that the implementation of Communication “A” 7532 by the Central Bank of the Argentine Republic (BCRA) represents for all the productive sectors of the country.”

“The measure makes it difficult for companies to meet the obligations contracted with their foreign suppliers, paralyzing the national production chain” (Candelo)

“The measure makes it difficult for companies to meet the obligations contracted with their foreign suppliers, paralyzing the national production chain and the provision of all kinds of goods and services,” the statement said.

“The software industry in particular, and its clients who belong to all sectors of the economy, provide vital services for companies to add value as a whole. Currently, both the software services that companies import and those that are developed locally, are mounted on platforms from all over the world, therefore the restriction on the payment of services abroad could paralyze the activity of all companies that use software. in their production processes”, he added.

In dialogue with Infobae, the president of CESSI sergio candelo He argued that the new conditions for the payment of imports generate all kinds of problems among companies that depend on imported software and digital services for their operation.

The problems arose after the publication of Communication
The problems arose after the publication of Communication “A” 7532 of the Central Bank. (Reuters)

“Everything is very interconnected today. Even a company specialized in software, and that exports more than it imports in the field, often depends on imported services for its developments. For example, data storage in the cloud, on which many of the systems that are developed and exported from the country run, is usually imported”, he said.

“And so there are innumerable cases of companies, not only software companies, that have their accounting, sales or production processes integrated into solutions that are paid for every monthCandelo added.

The business model of the global software sector has undergone a change in recent years that makes the problem more urgent. Developer companies have been moving towards a subscription model, in which their systems are marketed through a monthly or periodic payment, from a previous turnkey sales model. It is already more common for systems as simple as Microsoft Office to be paid for by subscription than through a one-time purchase that grants the right to unlimited use of that system.

“We have detected difficulties in obtaining equipment, even the most basic computers” (Galeazzi)

“There is a situation that if a company wants to add workers and pay more users for those same systems, simply because it put more desks, it exceeds the limit to import from the Central Bank and that it forces to pay no more than 5% more than what which was paid as an import during the past year. You exceed the limit, ”said a businessman from the sector to Infobae.

Local software distributors are the ones facing the hurdles, something that is aggravated by the difference in activity levels depressed during the social distancing measures imposed in 2020 and 2021 by the pandemic, said the same businessman.

“CESSI manages a modification before various government agencies with the explicit request that the sensitive situation of companies be considered, especially those that have contracts and obligations contracted before the new norm and that today cannot access the Foreign Exchange Market. to pay them,” Candelo said in the CESSI statement.

The problems to maintain access to key digital services for production and software for daily use in companies are added to those that already existed for the importation of hardware.

“We have detected difficulties in obtaining equipment, even the most basic computers. Several companies have found it difficult to bring them. Not so much with the payment but with the availability of the equipment”, said Luis Galeazzi from Argencom to Infobae.

The problems for payments for imports of software and digital services persist despite the fact that the Central Bank relaxed the rules for the sector in Communication A 7542 of July 7. Central Bank spokesmen made no statement.

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