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Relevant measures adopted by the new Government for the reconstruction of the Argentine economy.

The Executive Power of the Argentine Republic issued the Decree of Necessity and Urgency 70/2023, which was published in the Official Gazette on 21 December 2023 and entered into force on 29 December 2023. This Decree declared a public emergency in our country in economic, financial, fiscal, administrative, social security, tariff, health and social matters until 31 December 2025.

Through the implementation of a far-reaching deregulation plan, the government plans to rebuild Argentina’s economy by immediately eliminating state barriers and restrictions that impede its normal development, while at the same time it aims to promote greater insertion world trade.

In an extensive development of more than 300 articles, measures related to various economic, customs, foreign trade, legal, labour, corporate and social aspects, among others, have been established. These measures seek to promote the deregulation of trade, services and industry, as well as to eliminate all restrictions on the supply of goods and services. The aim is to implement an economic system based on free decisions, adopted in an environment of free competition, with respect for private property and the constitutional principles of free movement of goods, services and labour.

Although the different regulations and methodologies through which the measures will be implemented are still being made known, we share with you some relevant aspects that will surely have an immediate impact on the industry and maritime transport sector, foreign trade, energy and labour. This could also result in a change of course that will promote investment opportunities in our country, providing greater legal certainty for those who intend to invest in it and fostering the development and growth of trade relations with different countries around the world.

 

⇒ Foreign Trade and Custom

The Decree establishes a substantial reform of several sections and articles of Law 22,415 (Customs Code -CA-), introducing modifications that consist of elimination of restrictions and barriers to trade, operational facilitation of formalities and procedures, removal of powers of the Executive Branch, among other changes, in order to streamline trade, facilitate operations and ensure transparency. Below, we briefly share some of them:

– The requirement to engage a customs clearance agent to carry out the clearance and destination of goods is eliminated, and all individuals are empowered to carry out these operations personally (art. 99 of the DNU amending art. 37 of the CA).

– The Register of Importers and Exporters is eliminated in order to be able to register Import and Export Destinations, empowering all individuals and legal entities to apply for these destinations and carry out foreign trade operations, except for those who are subject to the prohibitions established in Article 94 of the CA. (NOTE: In connection with this, the Secretariat of Commerce and the AFIP, by means of Joint Resolution 5478, published in the Official Gazette on 10/01/2024, eliminated the requirement of Financial Economic Capacity, which restricted and limited the permits to carry out foreign trade operations).

– It is established that the customs service agents and, when appropriate, the security and police forces that conduct customs control in their area, must preserve the continuity of import and export operations that are in progress, and may only interrupt them if there is evidence that leads to a reasonable presumption that a customs offence has been committed or is in the process of being committed (art. 111 of the DNU, which amends art. 119 of the CA).

– The National Executive Branch is instructed to adopt procedures and mechanisms that simplify the fulfillment of its obligations with the different actors involved in foreign trade activities, including the extended use of information, automation and communication technologies for the electronic exchange of information (art. 112 DNU incorporating art. 120 bis of the CA).

– It is stipulated that the state agencies involved must process the destinations and permits inherent to the destinations through the Single Window for Argentine Foreign Trade (VUCEA) (art. 114 DNU incorporating art. 120 quater of the CA).

– Changes are introduced and deadlines for the application for import and export customs declarations are modified.

– The concept of “advance ruling” is created, modifying articles 226 and 323 of the CA, and establishing the possibility of requesting, prior to the import and export of the goods, an advance ruling from Customs that determines the customs treatment to be granted to the goods at the time of import/export.

– The National Executive Power is prohibited from imposing prohibitions or restrictions on exports or imports for economic reasons, which may only be determined by law. In addition, the articles that empowered the Executive Power to establish specific import duties are repealed.

– The Articles outlining the arrangements applicable to the price equalisation tax are repealed.

– The minimum value for appealing customs decisions in court is updated.

– The National Executive Power is urged to seek accession to existing international agreements that mean for the customs sector an innovation and debureaucratisation of administrative and control procedures, with the aim of reducing costs and promoting Argentina’s inclusion in the international market.

 

⇒ Energy

Law 27,424 on the Regime for the promotion of distributed generation of renewable energy integrated into the public electricity grid is simplified, repealing articles 16 to 37 that established the creation of the Fund for the Distributed Generation of Renewable Energies (FODIS) and the promotional benefits to be implemented through it, as well as the Promotion Regime for the National Manufacture of Systems, Equipment and Inputs for Distributed Generation from renewable sources (FANSIGED).

-The SECRETARIAT OF ENERGY of the MINISTRY OF ECONOMY is empowered to redetermine the structure of subsidies in force in order to ensure end users’ access to the basic and essential consumption of electricity and natural gas, and to define the specific mechanisms that materialise the allocation and effective collection of subsidies by users.

-Necessity and Urgency Decree 1060/2000, which established the maximum duration of exclusive fuel supply contracts and the maximum percentage of ownership or direct operation of oil companies and/or fuel suppliers in the total network of service stations that market the brands they own, is repealed.

-Necessity and Urgency Decree 1491/02, referring to export contracts for Firm Power and Associated Electrical Energy, and the Generation Commercialisation Agreements related to certain exports and their exclusion from the provisions of Law 25,561 and Decree 214/2002 are repealed.

-Decree 634/2003, entitled “Extensions of High Voltage Electricity Transmission and Trunk Distribution,” is repealed.

-Law 25,822 of the Federal Electric Transport Plan is repealed.

-Decree 311/06, which approved the granting of refundable loans from the National Treasury to the Unified Fund created by Law 24,065, for the undistorted maintenance of the price stabilisation system in the wholesale electricity market, is repealed.

 

⇒ Mining

-Law 24,523, which created the National Mining Trade System under the organic and functional dependence of the National Mining Secretariat, is repealed.

-Law 24,695 on the creation of the National Mining Information Bank on Equipment and Human Resources is repealed.

 

⇒ Airline industry

The regulations governing the airline industry are amended in order to make the industry more flexible, promote private sector participation and attract investment, through measures such as the following:

-Law 19,030 on the rules of application in air transport is repealed.

-Decree Law 12,507/56 on National Aeronautical Policy is repealed.

-Decree of Necessity and Urgency 1654/02, which declares a state of emergency in air transport, is repealed.

-Laws 26,412 and 26,466 are amended, and the transfer of shares of Aerolíneas Argentinas S.A. and Austral Líneas Aéreas – Cielos del Sur S.A., and their subsidiaries, to the employees of these companies is enabled through a Participated Ownership Programme.

In addition, the following amendments, among others, are introduced to Law 17,285 (Aeronautical Code):

-Aerocommercial civil aeronautics is defined as an essential service.

-The regulatory and supervisory authority shall supervise air navigation service providers by applying the principles of ensuring safety, free competition and market access.

-The aeronautical authority will regulate and supervise airport services, and will regulate essential airport services under the principles of guaranteeing safety, free competition and market access.

-Ramp services in general are defined as essential airport services.

-Manned and unmanned aircraft are defined as devices or mechanisms that can move in airspace and are capable of transporting persons or goods.

-Any aircraft acquired by means of any type of contract concluded in the country or abroad, whereby the seller reserves ownership of the aircraft until the total payment of the sale price, the completion of the term or the fulfillment of the respective condition, may be provisionally registered in the name of the buyer.

-The National Aircraft Register is public and will be available for access through electronic means.

-Article 60 on aircraft privileged credits is amended and the period for their extinction due to maturity, counted from their registration, is extended to two years if they are not renewed.

-The exploitation of any commercial air activity by foreign flag companies shall be subject to the international rules and agreements to which the Argentine Nation is a party and that the Executive Power shall try to obtain reciprocity principles.

-The requirement to be Argentinean and to maintain domicile in the Republic is eliminated in the case of human persons who operate internal air transport services, and it is sufficient to prove legal domicile in the country.

-Some requirements related to domicile and nationality of those who may join and/or exercise control and management of companies providing domestic air transport services are eliminated.

-The authorisation to operate on a route does not imply exclusivity and that the competent authorities will promote healthy competition rules, in accordance with the principles of market freedom.

-Regarding aerocommercial services, it is maintained that the personnel performing aeronautical functions must be Argentinean, but it empowers the National Executive Power to authorise a percentage of foreign personnel, establishing a gradual replacement procedure. However, the National Executive Power shall allow the use of foreign-registered aircraft, trying in such case to obtain reciprocity principles and agreements of double surveillance of operational safety where it is guaranteed that such aircraft will be manned, assisted and maintained by Argentine personnel, with the authorisations required by law.

-The tariffs will be freely set by the companies and without any restriction, and must be registered with the competent authority only in order to make known the terms, conditions, penalties and restrictions of each one of them.

-The consignment note may be made out in physical or electronic format.

-The National Executive Power will regulate and carry out a civil aviation policy that allows its growth, under the principles of security and market freedom, in accordance with agreements with third states and that, within the framework of domestic and international air commercial permits, free reciprocal access to air commercial markets and international and domestic connectivity will be encouraged among domestic and foreign air commercial operators.

-The penalties and amounts of fines applicable to infringements for non-compliance with the provisions of the Code, applicable laws and regulations are amended.

 

⇒ Labour

On the labour front, in order to simplify registration processes and provide greater legal certainty to labour relations, significant modifications are introduced, among which we highlight the following:

-With regard to the National Employment Law 24,013, articles are repealed that established fines to be paid by the employer in the case of absence or deficiency in the registration of the employment relationship, and articles are incorporated to make the registration of the employment contract more flexible and expeditious, through electronic means.

-The fine established by Article 9 of Law 25,013 is repealed in the case of non-payment in due time and without justified cause by the employer of the compensation for unfair dismissal or of an approved termination agreement.

-Law 25,323, which established the increase to double the severance pay provided for in Law 20,744, in the case of an unregistered or poorly registered employment relationship, is repealed. Furthermore, it eliminates the 50% increase in severance pay for dismissal and notice, in the event that the employer does not pay the severance pay, notice and month’s severance pay within the legal term and forces the worker to initiate legal action or any other prior compulsory action to receive them.

-In the case of Law 20,744 on Employment Contracts, amendments are incorporated that reinforce the exclusion from the scope of application of the Law of contracts for work, services, agency and all those regulated in the Civil and Commercial Code of the Nation. The trial period is increased from three to eight months; the fine for failure to deliver the work certificate is eliminated and its delivery is provided for through a virtual platform to be incorporated by the Executive Power, and the obligation to deliver it is also considered fulfilled when the information is updated and available to the worker through the social security website. In terms of compensation, several important changes have been made, among which we highlight the following: a) Christmas bonuses and bonuses, prizes or concepts of annual or half-yearly periodicity are excluded from the indemnity base; b) the possibility of agreeing by collective labour agreement on the replacement of the current indemnity regime by a “severance fund” is established; c) it empowers the employer to contract a private capitalisation system at its own cost, in order to pay the indemnity of article 245 of the Law on Employment Contracts and/or the sum that may be agreed upon in the event of termination by mutual agreement in accordance with article 241 of the Law on Employment Contracts; d) it incorporates a specific rule for cases of dismissal motivated by a discriminatory act; e) for persons included in Law 24,467, it establishes the possibility of paying the court sentence in up to 12 instalments, adjusted according to the Consumer Price Index (CPI) plus a pure interest rate of 3% per annum.

-Law 23,551 on Trade Union Associations is amended, limiting the right to hold assemblies so that the normal activities of the company are not affected or third parties are not affected. In addition, it incorporates the typification of what will be considered prohibited actions, among which are affecting the freedom of work of those who do not adhere to a measure of force, causing blockades, taking over an establishment and preventing or obstructing the entry or exit of people and/or things to the establishment, and causing damage to people or things belonging to the company or third parties located in the establishment (facilities, merchandise, supplies and raw materials, tools, etc.) or unduly withholding them.

-Law 25,877 is amended, providing for a minimum percentage of 75% coverage for essential services (including customs services and other services related to foreign trade), and 50% coverage for essential services (including maritime, river, land and underground transport of people and/or goods by the different means used for this purpose).

 

The issues highlighted above are a synthesis of those aspects that we consider relevant and have the greatest impact on the international maritime and air transport and trade sectors. Without prejudice to this, it should be noted that other changes and measures have been established with the intent to contribute to the growth of the industry, international trade and investments, as well as to the better positioning of Argentina in the world.

The full text of the Decree can be found at the following link.

It should also be noted that these were the first measures adopted as a matter of urgency by the new Government, but that, during these days, a draft bill (called “Omnibus Law”) referring to other aspects of the aforementioned matters and which includes amendments to other important laws, such as the Fisheries, Hydrocarbons and Companies Laws, among others, is currently under consideration by the Congress of the Nation. We will keep you informed on the progress of this legislative treatment.

We are at your disposal to assist you and to provide you with precise and detailed information on the various changes introduced by the Decree and which may be of interest to you.

The team of IT&L