Argentina tax agency raiding grain company offices again

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BUENOS AIRES (Dow Jones)–Argentina’s tax agency has again raided the offices of leading multinational grain exporting companies, seeking evidence to back up charges that the companies cheated the government out of about 150 million pesos ($38 million) in taxes.

Agents of the national tax agency Afip raided 117 offices of 48 different exporters amid charges that they created shadow companies to hide grain sales, Afip said in a press release Tuesday.

A source close to the matter said that Nidera Handelscompagnie B.V., Bunge Ltd. (BG), Cargill Inc., and Noble Group Ltd. (N21.SG) were involved in the investigation.

Cargill is the leading exporter of grains in Argentina by volume, followed by Bunge, Archer Daniels Midland Corp. (ADM), the Argentine Cooperative Association, Noble Group, Louis Dreyfus Commodities, Nidera, Toepfer International GmbH, Aceitera General Deheza SA, and Oleaginosa Moreno SA.

Afip said that the companies are accused of creating phantom companies using the names of individuals with limited means and even some who had died.

The latest investigation comes amid a broader crackdown by Argentine officials on grain exporters, whom the government accuses of avoiding hundreds of millions of dollars of income taxes.

Agriculture exports were largely responsible for Argentina’s whopping $12.06 billion trade surplus last year, while taxes on farm exports accounted for a significant percentage of the federal government’s tax revenue. This country is the world leader in soymeal and soyoil exports, ranks No. 2 in corn exports, and third in soybeans.

Last year, Afip accused four of the country’s 10 largest grain exporters of using shell companies in neighboring Uruguay for accounting scams which left minimal profits on the books of their Argentine units.

In November, Afip said it was investigating Molinos Rio de la Plata SA (MOLI.BA) for possible tax evasion totaling $153 million on grain export profits.

That followed indictments in October against two executives from agricultural giant Cargill, freezing 100 million pesos of assets each for Cargill Argentina Chairman Hector Orlando Marsili and Cargill Uruguay executive Javier Gustavo Fernandez.

Afip said the Cargill executives conspired to defraud the government of millions of pesos in taxes from 2000 to 2003, charges the company denies and has vowed to fight.

Also in last year, tax inspectors raided the offices of global grains giant Bunge amid accusations that the company had bilked Argentine tax authorities out of ARS1.2 billion in income taxes. Bunge denies the charges and said it will defend itself in court.

Argentina tax agency raiding grain company offices again

by Jack Johnson on Mar 02, 2011

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