How South American Currency Controls Impact U.S. Payments in Trade Deals

When a U.S. business agrees to sell goods or services to buyers in Argentina, Brazil, or Venezuela, they rarely think first about local currency rules. Yet those rules often determine whether you’ll actually get paid, how fast, and how much it costs to convert and repatriate funds.

If you’re exporting, licensing, or contracting with South American partners, knowing these currency exchange laws can mean the difference between profit and loss, or getting stuck waiting for your money.

In this post, we’ll walk through the specific challenges in Argentina, Brazil, and Venezuela, how they affect transactions, and how you can mitigate risk in your contracts.

Why U.S. Sellers Must Care About Foreign Exchange Controls

Before we dive into country-by-country, it helps to understand the mechanics:

• Currency controls restrict how and when local entities can convert or move foreign currency (e.g. U.S. dollars) within or out of their country.
• These controls often create delays, artificial spreads between official and black-market rates, and restrictions on repatriation of profits.
• Even if your buyer is willing to pay, local laws might force them to pay in the local currency, or limit when they can buy dollars to make payment.

In practice, these constraints can derail cash flow, increase costs, or lead to collection disputes, even when your client or buyer is acting in good faith.

Argentina: From Tight Controls to Gradual Liberalization

What Used to Be: “El Cepo” and Rigid Controls

For years, Argentina was known for its strict currency clamp called el cepo. The government required exporters to convert foreign currency to Argentine pesos, limited dollar purchases for individuals and companies, and imposed waiting periods for imports and services.

Companies importing goods or services could not immediately settle payments in dollars; they often had to wait 30 days after customs entry before accessing foreign exchange. Also, profits and dividends could not be easily transferred abroad.

Recent Changes and What They Mean

In April 2025, Argentina introduced Communication A-8226, which removed many of these controls and eliminated several waiting periods. 

Key adjustments include:

• Eliminating the 30-day delay for service imports from unrelated parties
• Allowing companies to pay imports as soon as goods clear customs
• Permitting dividend distribution to nonresidents (for retained earnings from fiscal years starting 2025)
• Removing limits on individuals buying USD via official channels 

These reforms are part of a broader shift after Argentina secured a $20 billion IMF deal. 

However, not all old restrictions have vanished, and legacy debt that was accumulated under old rules may still face obstacles.

How This Affects U.S. Payments

• If you’re exporting goods or services, your Argentine buyer may now have more flexibility in paying you in foreign currency.
• But for contracts made before 2025, or for legacy obligations, the old rules may still apply.
• You’ll want contractual clauses that anticipate exchange rate fluctuations, conversion risks, and delays in foreign exchange access.

Brazil: Contracting Around Exchange Permits and Authorization

Brazil doesn’t typically impose as dramatic controls as Argentina did, but it still regulates capital movements and foreign exchange, especially for imports, services, and external debt.

How Exchange Works in Brazil

• Before paying a foreign supplier, Brazilian importers often must register an import or service contract with Central Bank or authorized financial institutions.
• Once the import or service is properly registered, funds can be transferred abroad under the approved exchange contract. 
• Brazil and Argentina also use a local currency payment system (SML), allowing trade between the two using their own currencies without converting to USD in some cases. 

Practical Challenges for U.S. Sellers

• The registration process can delay payment—your Brazilian buyer must first “open” the contract before making payment abroad.
• If exchange contracts are not correctly documented, the local bank or central bank may reject or delay the remittance.
• You may want to include contractual conditions making payment contingent on successful exchange registration.

Venezuela: Severe Constraints and Alternative Routes

Venezuela has among the most formidable barriers for foreign exchange. Long-standing controls, hyperinflation, U.S. sanctions, and currency scarcity make payments extremely risky.

Common Barriers:

• Local law may require that many payments be made in bolívars, or local currency, especially for domestic goods and services.
• Access to U.S. dollars is often restricted to government-authorized channels; many businesses rely on parallel markets or cryptocurrency alternatives. 
• High spreads between official and black-market rates create uncertainty in how much USD you actually receive after conversion.

Risk Mitigation for U.S. Buyers:

• It’s safer to negotiate advance payments or escrow arrangements.
• Consider payment in USD through an agreed offshore account, if permissible under local law.
• Use contracts that adjust for exchange rate divergence or permit alternative payment instruments when formal channels fail.

Contract Clauses You Should Adopt to Handle Currency Risk

Given all these complications, your agreements with South American counterparties should include:

1. Currency and Payment Method Clause: Specify the currency (USD or local) and how payment must be made, bank transfer, escrow, etc.
2. Exchange Risk & Adjustment Clause: If the local market’s exchange rate deviates significantly from the rate you expected, allow for adjustments or renegotiation.
3. Delay and Permits Clause: Make payment obligations contingent upon obtaining necessary exchange registration, import licenses, or central bank authorizations.
4. Fallback Payment Mechanism: If local exchange is blocked, allow payment via alternative routes (cryptocurrency, escrow, convertible instruments), if legally permitted.
5. Force Majeure / Government Action Clause: Cover extreme changes in currency law or controls that prevent payment.
6. Dispute Resolution & Governing Law: Use neutral arbitration or U.S. law if possible, so that local currency controls are less likely to block enforcement.

What U.S. Businesses Should Do Now

If you’re entering or renegotiating contracts with South American buyers:

• Get local counsel to confirm the current, on-the-ground rules (these change frequently).
• Build in clear protective clauses as above.
• Favor partial advance payments or escrow rather than full post-delivery remittance.
• Monitor currency reforms and shifts (e.g. Argentina’s recent lifting of many controls) so you can renegotiate or act accordingly.

Final Thoughts

U.S.-South America trade isn’t just about tariffs, shipping, or customs. Currency laws often become the hidden barrier between getting paid and being stuck with uncollectible receivables. 

These challenges are significant in countries like Argentina (which is beginning to loosen controls), Brazil (which requires authorization steps), and Venezuela (with extreme controls). But with informed contracts and proactive structuring, U.S. businesses can reduce risk and make cross-border deals more secure. Our team at Ayala Law routinely advises on international contracts and litigation risks, and we’d be happy to review your proposed agreement and help safeguard your payment rights.

If your company is negotiating deals in Latin America, contact one of our experienced business attorneys in Miami at 305-570-2208.

You can also contact our founding attorney Eduardo A. Maura at eduardo@ayalalawpa.com.

Schedule a case evaluation online here.

[The opinions in this blog are not intended to be legal advice. You should consult with an attorney about the particulars of your case].