Argentine Customs sanctioned multinational consumer goods corporation Procter & Gamble (P&G) this week for allegedly overstating imports worth US$68 million from 2019 to 2022. The corporation, which is set to be fined up to five times that amount, told the Herald that they “pay all their taxes”. 

According to official Customs sources, the corporation — which owns brands such as Pampers, Ariel, Gillette, Head and Shoulders, Pantene, and Oral B, among others — registered imports in Argentine ports at a value that exceeded 300 to 500 times their actual prices.

P&G was allegedly using an import system that allowed it to declare a temporary value for its imports at the beginning of the operation, and then modifying it as many times as it wanted until the goods reached the port. The corporation imported goods from Uruguay and billed successive sales within the same economic group. The third operator was Procter and Gamble International Operations, from Switzerland. 

As a result, Customs is seeking to fine the corporation US$ 68 million through its administrative judge, aiming to make it pay for the difference in the import duties it originally paid to match the actual prices.

Most damningly, P&G was the only corporation that worked under that system, which was created in July 2019 under former President Mauricio Macri’s presidential administration via an AFIP resolution (4419).

With these maneuvers, said Customs, P&G took “foreign currency from the Argentine government in an irregular manner, in a country where dollars are not abundant.” It has asked the government to repeal the resolution the AFIP resolution and will file a complaint against P&G for  “improperly sending foreign currencies abroad.” That constitutes a violation of article 954, subsection C of the Customs Code, which could result in a fine that represents one to five times the difference between the declared and the real values.

The Central Bank is actually going through an international reserve scarcity, which is putting pressure on the exchange rates, which saw a sharp rise this week and reached a record high of almost AR$ 500.

P&G has now ten working days to accept or reject the fine. When the administrative case is finished, the judge can establish the fine, which could range from the US$ 68 million Customs calculated to five times that amount. Customs said the judge will take into account the corporation’s record to decide the final amount. 

P&G told the Herald it takes “compliance with the laws in Argentina”, and in all the countries it operates, “very seriously.” 

“The company continues to work with the authorities to understand the concerns expressed and to resolve them constructively”, P&G said. “P&G pays all its taxes, in every country and jurisdiction, around the world.”