Doing Business in Argentina 2023

Destacado

Investments in Argentina are booming, despite the international and macroeconomic challenges.
Understanding the internal market is key to undertakings and development plans. From CYT we provide you with key information to be able to know the current factors and dynamics.
Regarding the economic and political sector, it should be noted that 2023 is an electoral year, where in Argentina the president will be elected in the month of October. However, the agreement with the IMF (International Monetary Fund) reached in March 2022 allows and gives the country the opportunity to obtain liquid funds to go through the post-pandemic recovery, being an ideal time for new foreign investments.
Argentina has multiple attractive investment projects that capture the interest of international investors, especially China. The country has a large base of talent and human capital, which facilitates business promotion, a well-educated general population, and an active community of entrepreneurial businesses that could enable exponential growth if managed consistently and efficiently. As an example, the technology sector -specialization area of our firm- is experiencing exponential growth, exporting services and talent to the whole world in areas like artificial intelligence, software implementation and development, and general outsourcing.
It is also worth noting the ease of implementation of the projects, due to the exchange gap between the dollar and the Argentine currency (peso), which turns investors into dynamic players with strong business capacity.


From CYT Abogados we elaborate global strategies for the implementation of new businesses, helping and guiding in the different areas of the market: legal, accounting and tax. 2023 is presented as a challenging year, although extremely profitable for starting new businesses. Our consulting, advisory and implementation services will allow you to develop your business in our country. We care to accomplish.

New Achievement – International Compliance Certification

We are proud to announce that CYT has received LPEC certified in Ethics & Compliance.

As part of ECI (Ethics and Compliance Initiative), LPEC certification shows that we have the requisite, working knowledge to build and sustain thriving E&C programs to the highest possible standard guaranteeing our clients high level models in Compliance Programs.

ECI Certification empowers Organizations to build and sustain the programs that are proven to increase integrity in Organizations. In CYT, we help leaders create strong Ethical Workplace Cultures and successful businesses

JULIAN COSSO Abogado (UBA), Lawyer, founding partner of CYT Abogados, with a practice area advising companies.

Nueva titulacion obtenida – Ethics and Compliance Initiative

Nos complace informarles que el estudio ha obtenido la titulación internacional LPEC (Leadership Professional in Ethics and Compliance) otorgado por la ECI internacional.

Dicha titulación nos posiciona a la vanguardia del Compliance logrando brindar a nuestros clientes cada día mas y mejores servicios.

Por JULIAN COSSO
Abogado (UBA), Magister (UCA) Diploma de honor y premio al mérito académico, especialista en derecho empresarial.

Law for the defense of competition

Law for the defense of competition

Some practical considerations for its understanding, in light of recent regulations.

a) The regulations aim to prevent and punish the cartelization of the market and the abuse of a dominant position. Consequently, agreements between competitors, economic concentrations and any act or conduct intended to falsify or distort competition or market access are prohibited.

b) The parties: creates the National Competition Authority (ANC), a decentralized and autarchic body within the scope of the National Executive Power, with headquarters in the CABA although with the possibility of acting throughout the national sphere. Within the ANC, the Court for the Defense of Competition (TDC), the Secretariat for the Investigation of Anticompetitive Conduct (SICA) and the Secretariat for Economic Concentrations (SCE) will function.

c) It typifies behaviors (practices), presuming them as generating a detriment to the general economic interest (Arts. 2 and 3).

d) Submits to the provisions of the law both natural and legal persons, public and private, who carry out economic activities in the national territory and abroad. For the latter case, the activities or agreements must produce effects in the local market. It is established, for the purposes of the law, that “in order to determine the true nature of the acts or behaviors and agreements, the economic situations and relationships that are actually carried out, pursued or established will be taken into account” (Art. 4). It remains to be seen whether practice allows for greater certainty about this statement, which, a priori, should be taken following the contextual harmonization of the legal body.

e) Provides a complete statement of (what is to be understood by, and how to be understood by) the so-called dominant position in the market (Art. 5) and economic concentration (Art. 7).

f) Article 9. Prior notification. Assumptions: orders that, prior to perfecting the act that may imply an economic concentration (for example, a merger between companies), the ANC must be notified. For the assumption to be configured, the sum of the total business volume among the companies as a whole must exceed 100 million mobile units (MU). There are two (2) cases for which the Article requires, as a prior precaution, notification to the ANC: 1) Improvement of the act “per se”: the acts typified in Art. 7, such as the transfer of goodwill of one or several companies, or a merger. 2) Materialization of the takeover: although the law does not deal with it, the Regulation is in charge of stipulating the definition, indicating that “these are all those acts that, in any way, in fact or law, grant substantial influence to the acquirer or any of the members of its control group over the object of the operation”. The regulation of the law, on the other hand, delves into the cases in which it must be notified in advance. In all cases -it provides-, the notification will be optional for the selling party, although the TDC may require its participation in the process. Finally, the regulation stipulates that the acts of economic concentration that are concluded in non-compliance with the provisions of Art. 9, will not produce legal effects, without prejudice to the responsibility that may correspond to the natural or legal persons who ordered them or contributed to them. its execution.

g) At the request of a party, the TDC may issue advisory opinions on whether an act falls within the obligation to notify the ANC, as stated above. The decision is unappealable. Likewise, the TDC can act ex officio or upon a complaint by the interested party to assess whether an act (not notified) falls within said obligation.

h) The TDC, in all cases of prior notification, must decide by well-founded resolution: Authorize the operation. Subordinate the act to the fulfillment of conditions, to be established by the same authority Deny the authorization. On the other hand, Art. 14 authorizes the TDC, prior to making a decision, to notify the parties involved of its objections and summon them to a special hearing to consider possible measures to mitigate the (suspected) negative effects on competition. In this way, the parties are given the possibility of replying to the potentiality or doubt about the operation.

i) Access to jurisdiction: Outside of the ex officio action, those interested in initiating proceedings before the ANC must pay a fee that «may not be less than 5,000 nor exceed 20,000 UM» (Art. 33). Bearing in mind that the initial value of the UM is established at 20 pesos (conf. Art. 85), the jurisdiction will be restricted to a minimum payment of $100,000. It remains to be seen how this route is implemented for individuals or small companies that cannot afford the tariff.

j) Some procedural issues: The procedure is initiated ex officio or by complaint made by both individuals and legal entities, public or private. The complaint must contain the same assumptions as those contemplated in Art. 330 CPCCN. In principle, the breadth of evidence governs, although the TDC must decide on the admissibility of the evidence, granting that which is pertinent and rejecting that which it considers inadmissible. Said decision-making is irrevocable, although an appeal for reconsideration of the evidence measures ordered in relation to relevance, admissibility, suitability and conduct may be raised (Art. 42). The TDC may enforce conditions or order the cessation of conduct in order to prevent it from causing harm. It may order the measures it deems pertinent to prevent injuries to the competition regime (Art. 44). Although nothing more is added about this kind of precautionary measures, it is clarified that an appeal may be filed against the resolution, with devolution effect. Commitment: until (the time of) the resolution issued by the TDC, the alleged perpetrator may commit to the immediate or gradual cessation of the facts under investigation. Said commitment must be approved by the TDC, in order to suspend the procedure. After 3 years of fulfilling the commitment, without recurrence, the proceedings will be archived.

k) The leniency program. Relevant aspects: closely related to the recent changes in compliance and corporate criminal liability, Chapter VIII of the LDC allows any person (individual or legal entity) who has incurred or is incurring in a conduct of the (exhaustively) listed in Art. 2, can reveal it and recognize it before the TDC, availing itself of the benefit of the exemption or reduction of fines. Said benefit may be requested prior to the notification to the alleged perpetrators of the proceedings initiated by the TDC.

Requirements: for the benefit to be applicable, whoever requests it must meet each and every one of the following requirements, namely:

  • Exemption: in the event that the TDC does not have information, the alleged responsible party must be the first among those involved in providing such information and evidence. In the event that the TDC has previously initiated an investigation, but until the date of presentation of the request does not have sufficient evidence, it must be the first among those involved to provide evidence and information.

From the foregoing, it would seem to be evident that the scheme is exclusive to the first one who arrives. However, the chapter itself specifies that “the Court for the Defense of Competition will establish a system to determine the order of priority of applications to avail themselves of the benefit established in this article” (Art. 60). It remains to be seen in practice how the evidence and/or information will be merited in the event that they are presented by more than one person, and if the exemption can be asserted when the elements provided do not allow a single beneficiary to be established with certainty.

  • Immediate cessation of the action: the TDC may ask the applicant for the benefit to immediately cease his participation in the violating practice, or it may, on the other hand, request him to continue with the violating action or conduct in those cases in which he does so. I deem convenient in order to preserve the investigation.
  • Full cooperation: continuously and diligently with the Court for the Defense of Competition.
  • That it does not destroy, falsify or hide evidence of the anti-competitive conduct, nor would it have done so.
  • That he does not disclose or that he has not disclosed or made public the intention to avail himself of the benefit.

Notwithstanding the aforementioned exemption, reductionsor complementary benefits are established for those who provide additional information or evidence of conviction or usefulness to those already possessed by the TDC, as long as the remaining requirements listed are met. Finally, it is clarified that the beneficiary of the leniency program will also be jointly and severally liable before 1) its direct and indirect buyers or suppliers; 2) other injured parties, only when it is impossible to obtain full compensation for the damage caused.

l) The law authorizes the reparation of damages that could affect both natural and legal persons. Said action, when it takes place against the resolution of the TDC that -once signed- makes res judicata on the matter in which the LDC deals, will be processed by the summary process.

m) TDC resolutions are appealable. The appeal must be filed and founded before the TDC, who must submit the proceedings to the (yet to be created) Specialized Chamber for the Defense of Competition, of the National Chamber of Civil and Commercial Appeals. The regulations of the LDC establish that until the aforementioned Chamber is created, the National Chamber of Civil and Commercial Appeals of the Federal Capital will be competent to hear the appeal.

n) For cases not provided for or contemplated in the LDC, the Penal Code and the Nation’s Code of Criminal Procedure shall be of supplementary application.

o) The regulation of Law 27,442 adds the General Syndicate of the Nation and the General Auditor of the Nation as enforcement authorities, «supervising the actions of the National Competition Authority.

»JULIAN COSSO Abogado (UBA), Lawyer, founding partner of CYT Abogados, with a practice area advising companies in situations of insolvency and crisis.

Analysis of the ruling of the Supreme Court “Editorial Río Negro SA”

Analysis of the ruling of the Supreme Court “Editorial Río Negro SA”

In a brief jurisprudential elaboration, due to the considerations that will be discussed below, last Thursday, August 29, the Supreme Court ruled that the company Editorial Rio Negro SA is not jointly and severally liable for labor debts incurred by a dealer.

As background to the case, the Superior Court of Justice of Rio Negro had ruled in favor of the plaintiff, in a claim for labor debts filed against both the employer -Distributor of the Rio Negro Newspaper- and the Publisher that publishes it. At this point, the Court invoked Article 30 on the grounds that it was inexplicable to publish the newspaper without conceiving its distribution.

It is necessary to remember that Article 30 of the Labor Contract Law (LCT, hereinafter) provides for different assumptions of solidarity, which have given and are the subject of continuous doctrinal and legal discussion to date.

The Provincial Court, within the elements of the articles, was based and considered that the substance should be circumscribed around the configuration of the second of its hypotheses: Editorial Rio Negro delegated to the distributor, at least in part, its normal and specific activity of your establishment. Additionally, it was highlighted that the paper newspaper, as a product ready for the consumption of journalistic information, was not perfected except with its specific assembly (work that in the case in question was carried out by the distributor, who had to intersperse the various sections of the journal into a main body).

Based on what was said, it was concluded that the delegation of the last part of the productive execution unit of the newspaper verified solidarity. This is so, since the distributor does not receive a finished product, but rather participates in a product process that corresponds to the publisher. This is how, at the discretion of the Provincial Court, the hypothesis of provision by a third party of a normal and specific activity of the publishing establishment is configured.

As a defense at the time of filing the Extraordinary Federal Appeal, the Editorial jointly and severally convicted relied on the arbitrariness of the sentence, alleging that the product (the activity of the publishing house, specifically) began with the publication of the information, and ended with the Dispatch of the product to the distributor, who only has to order the material and put it in conditions to be consumed by the public.

Regardless of whether the case was received by the Supreme Court, the analysis carried out is, to say the least, controversial, where it is only highlighted that «the conclusion (of the Superior Court of Rio Negro) only finds support in an inordinate extension of the scope of application of Art 30 LCT , in a way that its text does not consent to, distorting its content by assigning it a meaning that unacceptably exceeds its purposes and therefore must be discarded” (cf. paragraph 5 of the ruling). This is how, without further guidelines than those mentioned above, the complaint is granted, declaring the Extraordinary Appeal admissible, and leaving the appealed judgment without effect.

The -necessary- criticism that must be made of the ruling under analysis is that a good opportunity is lost for our Supreme Court to set an objective criterion on how to interpret or, rather, how far the factor of joint and several liability goes that sets the LCT in its article 30. The Court did not take any argument from the doctrinaires who for years have been promoting different interpretative solutions, either within the so-called strict positions or the so-called broad ones. As an example of the first, which the Court could have applied to the «Editorial Rio Negro» case, Dr. Julio Grisolia has been able to point out that «those tasks that, although necessary for the operation of the establishment, are incidental and perfectly separable from the activity carried out by the contracting party, as they are not part of the normal and specific (proper) line of business of the company”.

Thus, the interpretation and scope of Art. 30 LCT may be broader or more restricted, depending on the legal protection it provides, but the Supreme Court must necessarily be reproached for reversing a sentence on the sole grounds of alleged arbitrariness, for understanding «an excessive extension of the scope of application of Art 30». Strictly speaking, the focus should have been on whether or not the task carried out by the plaintiff was a potential subcontracting of the Editorial, corresponding to the normal and specific activity of the establishment. It would have been all the more interesting to establish, or at least attempt, interpretive guidelines of what should be understood as normal and specific activity, and for the Court to shed a cloak of light with respect to broad or restrictive doctrines in interpretive matters.

In sum, the Court’s doctrine on outsourcing, from “Rodríguez v/ Compañía Bottling” to “Benitez v/ Platform Cero”, has fluctuated enough to justifyEditorial Rio Negroits interventionIt is worth remembering that where the “Rodríguez” ruling resolved on the merit of interpreting article 30 of the LCT that it was not appropriate to claim joint and several liability for labor credits from an employer who supplied another with a specific product, expressly disassociating himself from its further processing, preparation and distribution, the «new criterion» of the Court for judging joint and several liability based on «Benitez» implied abandoning the restrictive criterion of extension, holding that in order to define the acceptance or rejection of solidarity, the existence of » a technical execution unit between the company and its contractor, according to the implicit reference made by the regulation in question (art. 30), to art. 6 of the same legal system”. It was then inferred from «Benitez» that solidarity depended on the proof of that unit, referring to the establishment, which is specified in art. 69 of the LCT as a segment of the company, which serves its purposes.

What is valuable, and what must be meant from the “Rodriguez” and “Benítez” rulings, is that beyond the effects of one and the other, the Court truly wanted to establish doctrine, establishing criteria and guidelines for the assessment of the matter of Article 30. This was how, ultimately, he urged the judges to consider the facts and evidence of each specific case.

Contrary to what has been said, in “Editorial Rio Negro” the Provincial Court wanted, precisely, to analyze the facts and merit the activity in question, where the Court only branded the reasoning of the Superior Court of Justice of Rio Negro as “excessive”. In other words, and we could well maintain, it was inconsistent with the doctrine that had been in force since “Benitez”.

As a corollary, we must say that the trigger question of this opinion article remains (unfortunately) unfinished and open as a result of the commented ruling. We understand that the Supreme Court has not carried out a detailed analysis of the newspaper distribution and sale activity, on the one hand, nor has it sought to deal with the different edges that, from Rodriguez to Compañía Embotelladora, persist without unified criteria until the day of the date.

JULIAN COSSO Abogado (UBA), Lawyer, founding partner of CYT Abogados, with a practice area advising companies in situations of insolvency and crisis.