|Argentina sends P&G back to Cincy.|
Well, for Procter & Gamble, finding ways of serving the Argentinian market is no longer a problem from this day forward since P&G has now been accused of tax fraud and has been told to suspend operations in the country:
Argentina has accused the world's No. 1 household products maker, Procter & Gamble, of tax fraud and suspended its operations in the South American country, according to a statement issued on Sunday by the AFIP tax authority.For a trip down the memory lane of the Latin left demonizing foreign MNCs, read the presidential office's announcement (in Spanish, of course). I would not be surprised to find out that P&G attempted to circumvent currency controls in a way Argentinian officials take offense to. Then again, I would not be surprised to find that the bulk of MNCs operating in Argentina are doing the same in using their international structures to minimize the impact of such controls. P&G, however, has the misfortune of being an American giant. In order to "set an example," who better to go after than these guys? The potential ramifications are much wider: if MNCs get the message they are not welcome and start leaving en masse, it will take both a change in administration and some time to reestablish operations in the country as its autarkic delusions take hold.
The accusation is that the company over-billed $138 million in imports to get money out of the country, according to the statement, which was published on Argentina's presidential website (www.prensa.argentina.ar)."P&G funneled currency abroad and hid income that was subject to tax in Argentina," it said. "We have to put an end to these tricks used by international companies," the statement added.
Venezuela, Argentina, Bolivia, Ecuador...the list of Latin left countries aspiring to North Korea-like isolation is astounding. Did they not get the message that the modern corporation is dying anyway and are not worth persecuting anymore? Even now, scapegoating foreigners for largely homegrown failings is still in fashion with these folks as they party like it's 1979. That is, if they are still in a mood to get down as their economies go to heck.
UPDATE: Barbie, watch out--you may be next on the hit list.