Argentina tax agency raiding Argentina tax agency raiding grain company offices againgrain company offices again

By By Shane RomigShane Romig

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BUENOS AIRES (Dow Jones)–BUENOS AIRES (Dow Jones)–Argentina’s tax agency has again Argentina’s tax agency has again

raided the offices of leading raided the offices of leading multinational grain exporting multinational grain exporting

companies, seeking evidence to companies, seeking evidence to back up charges that the back up charges that the companies cheated the companies cheated the

government out of about 150 government out of about 150 million pesos ($38 million) in taxes. million pesos ($38 million) in taxes.

Agents of the national tax agency Agents of the national tax agency Afip raided 117 offices of 48 Afip raided 117 offices of 48

different exporters amid charges different exporters amid charges that they created shadow that they created shadow

companies to hide grain sales, Afip companies to hide grain sales, Afip said in a press release Tuesday. said in a press release Tuesday.

A source close to the matter said A source close to the matter said that Nidera Handelscompagnie that Nidera Handelscompagnie

B.V., Bunge Ltd. (BG), Cargill Inc., B.V., Bunge Ltd. (BG), Cargill Inc., and Noble Group Ltd. (N21.SG) and Noble Group Ltd. (N21.SG)

were involved in the investigation. were involved in the investigation.

Cargill is the leading exporter of Cargill is the leading exporter of grainsgrains in Argentina by volume, in Argentina by volume,

followed by Bunge, Archer Daniels followed by Bunge, Archer Daniels Midland Corp. (ADM), the Midland Corp. (ADM), the

Argentine Cooperative Association, Argentine Cooperative Association, Noble Group, Louis Dreyfus Noble Group, Louis Dreyfus

Commodities, Nidera, Toepfer Commodities, Nidera, Toepfer International GmbH, Aceitera International GmbH, Aceitera

General Deheza SA, and General Deheza SA, and Oleaginosa Moreno SA. Oleaginosa Moreno SA.

Afip said that the companies are Afip said that the companies are accused of creating phantom accused of creating phantom

companies using the names of companies using the names of individuals with limited means and individuals with limited means and

even some who had died. even some who had died.

The latest investigation comes The latest investigation comes amid a broader crackdown by amid a broader crackdown by

Argentine officials on grain Argentine officials on grain exporters, whom the government exporters, whom the government accuses of avoiding hundreds of accuses of avoiding hundreds of

millions of millions of dollarsdollars of income taxes. of income taxes.

Agriculture exports were largely Agriculture exports were largely responsible for Argentina’s responsible for Argentina’s

whopping $12.06 billion trade whopping $12.06 billion trade surplus last year, while taxes on surplus last year, while taxes on

farm exports accounted for a farm exports accounted for a significant percentage of the federal significant percentage of the federal

government’s tax revenue. This government’s tax revenue. This country is the world leader in country is the world leader in

soymeal and soyoil exports, ranks soymeal and soyoil exports, ranks No. 2 in corn exports, and third in No. 2 in corn exports, and third in

soybeans.soybeans.

Last year, Afip accused four of the Last year, Afip accused four of the country’s 10 largest grain exporters country’s 10 largest grain exporters

of using shell companies in of using shell companies in neighboring Uruguay for accounting neighboring Uruguay for accounting scams which left minimal profits on scams which left minimal profits on the books of their Argentine units. the books of their Argentine units.

In November, Afip said it was In November, Afip said it was investigating Molinos Rio de la investigating Molinos Rio de la

Plata SA (MOLI.BA) for possible Plata SA (MOLI.BA) for possible tax evasion totaling $153 million on tax evasion totaling $153 million on

grain export profits. grain export profits.

That followed indictments in That followed indictments in October against two executives October against two executives from agricultural giant Cargill, from agricultural giant Cargill,

freezing 100 million pesos of assets freezing 100 million pesos of assets each for Cargill Argentina each for Cargill Argentina

Chairman Hector Orlando Marsili Chairman Hector Orlando Marsili and Cargill Uruguay executive and Cargill Uruguay executive Javier Gustavo Fernandez. Javier Gustavo Fernandez.

Afip said the Cargill executives Afip said the Cargill executives conspired to defraud the conspired to defraud the

government of millions of pesos in government of millions of pesos in taxes from 2000 to 2003, charges taxes from 2000 to 2003, charges

the company denies and has the company denies and has vowed to fight. vowed to fight.

Also in last year, tax inspectors Also in last year, tax inspectors raided the offices of global grains raided the offices of global grains

giant Bunge amid accusations that giant Bunge amid accusations that the company had bilked Argentine the company had bilked Argentine tax authorities out of ARS1.2 billion tax authorities out of ARS1.2 billion in income taxes. Bunge denies the in income taxes. Bunge denies the charges and said it will defend itself charges and said it will defend itself

in court. in court.