28 Jun 24 The Ley Bases was approved
On June 28, 2024, the bill titled Law of Basis and Starting Points for the Freedom of Argentina (the “Law”) was approved.
Below, we detail the more important points of the Law:
1. Emergency: A public emergency is declared in administrative, economic, financial and energy matters for a period of 1 year. Likewise, legislative powers are delegated to the National Executive Branch (the “PEN” for its acronym in Spanish), in the terms of article 76 of the National Constitution, which must report monthly and in detail to the Congress about the exercise of said delegated powers and the results obtained.
2. State reform: Regarding the reorganization of the State, the Law establishes the bases of legislative delegations. Namely: i) Improve the functioning of the state; ii) Reduce the oversizing of the state structure; and iii) Ensure effective internal control in the national public administration. The PEN is empowered to modify, transform, merge, split, intervene or transfer to the provinces or the City of Buenos Aires certain bodies and entities of the central or decentralized administration, companies and state-owned companies and public trust funds, not expressly excluded in the Law.
Likewise, the companies wholly or majority owned by the State subject to total or partial privatization are: Energía Argentina S.A.; Intercargo S.A.U.; Agua y Saneamientos Argentinos S.A., Belgrano Cargas y Logística S.A., Sociedad Operadora Ferroviaria S.E. (SOFSE), and Corredores Viales S.A.
In addition, reforms and modifications were introduced to laws 19,549 (National Administrative Procedures), 25,164 (Regulation of National Public Employment), and 24,185 (Collective Labor Agreements).
3. Contracts in force and transactional agreements: The PEN is empowered, for emergency reasons, and whenever it is financially or economically convenient for the public interest, to renegotiate or terminate public works contracts, public works concession contracts, construction or provision of goods and services contracts and their annexed and associated contracts whose amounts exceed 10,000,000 modules established in article 28 of Decree No. 1030/2016, or the one that replaces it in the future, and that have been executed before December 10, 2023.
Contracts signed under the privatization processes authorized by Law 23,696 and those that have been signed within the framework of activity promotion regimes, investment or production stimulus programs or that to date are 80% executed are excluded.
4. Concessions: Several modifications are introduced to Law 17,520 (public works). The PEN may grant concessions for public works and infrastructure for a fixed or variable term to private or mixed companies or public entities for the construction, conservation or exploitation of public works or infrastructure and for the provision of public services through the collection of rates, tolls or other remunerations. This seeks to encourage the participation of national and international private individuals, not only in the execution of the works, but also in the proposal (through the private initiative regime) and in its financing.
5. Promotion of registered employment: Employers may regularize labor relations – unregistered or poorly registered – in force in the private sector before the approval of the Law. The regulation of the effects that this regularization will have -which may include, broadly speaking: i) the extinction of criminal action, condonation of infractions, fines and sanctions and crimes related to unpaid or unfulfilled social security resources to the date of entry into force of the Law ; ii) removal from the Registry of Employers with Labor Sanctions; and iii) forgiveness of debt for capital and interest when it arises from non-payment of contributions- is delegated to the PEN. The forgiveness percentages to be applied, which will be determined by the regulations, will in no case be less than 70% of the amounts owed.
Workers included in the regularization described will have the right to compute up to 60 months of services with contributions or the smallest number of months for which they are regularized. Meanwhile, the regularizations shall be carried out within 90 calendar days from the date of entry into force of the regulation of the Law.
Debts that are disputed in administrative, contentious-administrative or judicial proceedings may be included as long as the employer acquiesces or desists, in whole or in part, and renounces all actions and rights, assuming payment of legal costs and expenses. Finally, the Federal Administration of Public Revenues (“AFIP” for its acronym in Spanish) and the social security institutions will refrain from formulating, ex officio, determinations of debt and from issuing infringement reports for the same causes and periods included in the regularization corresponding to the social security subsystems, as well as tax adjustments.
6. Labor modernization: Different modifications are introduced to laws 24,013 (Employment), 20,744 (Labor Contract Law) and 26,727 (Agricultural Labor). Likewise, Law 25,323 (Labor Indemnities) is repealed.
7. Energy: Different modifications are included to laws 17,319 (Hydrocarbons), 24,076 (Natural Gas) and 26,741 (Fiscal Oil Fields). The National Gas and Electricity Regulatory Entity is created, replacing the Electricity Regulatory Entity (“ENRE”) and the Gas Regulatory Entity (“ENARGAS”).
On the other hand, the PEN is empowered to adapt Laws 15,336 (Electrical Energy) and 24,065 (Electrical Regulatory Framework). Likewise, the PEN is empowered to prepare, with the agreement of the provinces, a harmonized environmental legislation for the purposes of compliance with article 23 of Law 27,007, which will have as its priority objective the application of the best international environmental management practices to exploration, exploitation tasks and/or transportation of hydrocarbons in order to achieve the development of the activity with an adequate care of the environment.
8. Incentive regime for large investments (RIGI): The so-called “Incentive Regime for Large Investments” (“RIGI”) is created, which establishes a regulatory framework aimed at promoting investment in productive projects in Argentina. This regime will provide incentives, certainty, legal security and protection of acquired rights for vehicles holding projects that meet the established requirements. It is stated that Large Investments under the RIGI are of national interest and will benefit the country, the provinces, the Autonomous City of Buenos Aires and the municipalities. Its objectives are: to encourage “large investments”, foster economic development, strengthen competitiveness, increase exports and services, create jobs, provide stability to investments and coordinate powers between the National State, the provinces and the enforcement authorities in natural resources.
Throughout the articles, the deadlines and subjects authorized to participate, the specific requirements to be included in the RIGI, and the conditions under which said inclusion cannot be requested are regulated as well as the specific functions and responsibilities of the Enforcement Authority; tax and customs incentives for Utility Project Vehicles (“VPU”), as well as exchange regulation incentives; stability, compatibility with other regimes and assignments within the framework of the RIGI; the termination of incentives under the RIGI; the infringement and recursive regime applicable to the VPU; the provisions on the Law Enforcement Authority; the provisions on jurisdiction and arbitration in case of disputes related to the regime; and the declaration of national interest and the invitation to local jurisdictions to join the regime. More information here
9. Fiscal measures: called “Palliative and Relevant Fiscal Measures”, its purpose is the exceptional regularization of tax, customs and fiscal obligations, in order to achieve voluntary payment of obligations by taxpayers and responsible parties, who, if joining the regime, will obtain different benefits depending on the modality of enrollment and the type of debt they have.