Approval by the Senate of the Framework and Starting Point for the Freedom of Argentinians Bill
Public Law department report | Approval by the Senate of the Framework and Starting Point for the Freedom of Argentinians Bill
In the early hours of today, June 13th, the Federal Senate approved the new bill titled “Framework and Starting Point for the Freedom of Argentinians” bill (“the Framework Bill”).
Although the Framework Bill had already been approved by the Federal Chamber of Deputies, the Federal Senate introduced amendments. Therefore, the Framework Bill must now be sent back to the Federal Chamber of Deputies, which can enact it into law if approved by an absolute majority.
The subjects addressed in the Framework Law include the following:
1- Emergency
The Framework Bill maintains the declaration of a public emergency, now limited to administrative, economic, financial, and energy matters, for a period of one (1) year. The delegation of legislative powers to the National Executive Branch is upheld—in accordance with Article 76 of the National Constitution—with the addition that the Executive Branch must now report monthly and in detail to the Honorable National Congress on the exercise of the delegated powers and the results obtained.
2- State Reform.
Regarding State reform, the Framework Bill retains the chapters related to:
– Administrative reorganization, granting the Executive Branch the authority to modify, transform, merge, split, or intervene in bodies and entities of the central or decentralized administration, state-owned companies and corporations, and trust funds. National universities, bodies or agencies of the National Judicial Branch, the Legislative Branch, the Public Prosecutor’s Office, and all entities dependent on them are excluded from these powers. Certain decentralized entities are also excluded.
– Regarding the privatization of state-owned enterprises, the Framework Bill declares certain entities “subject to privatization,” either wholly or partially. This applies to companies and corporations that are wholly or majority-owned by the state, as listed in its annexes. Among the state-owned corporations subject to privatization are entities such as Energía Argentina S.A., Aguas y Saneamiento Argentino S.A. Belgrano Cargas y Logística S.A., Sociedad Operadora Ferroviaria S.E (SOFSE) and Corredores Viales S.A.
However, Aerolíneas Argentinas S.A., Radio y Televisión Argentina S.E., and Correo Oficial de la República Argentina S.A. have been removed from the list of entities subject to privatization.
– Amendments to Laws 19,549 (National Administrative Procedures), 25,164 (National Framework Law on Public Employment Regulation), and 24,185 (Collective Bargaining Agreements).
3- Existing Contracts and Settlement Agreements
The Framework Bill maintains the authorization for the National Executive Branch to renegotiate or terminate, for emergency reasons and under certain conditions, contracts for public works, public works concessions, construction or provision of goods and services, and their related and associated contracts that exceed certain amounts and were entered into before December 10, 2023. Contracts signed under the privatization processes authorized by Law 23,696 are expressly excluded, as well as those entered into under regimes promoting activities or investment/production stimulus programs.
Furthermore, the authorization remains for the National Executive Branch to reach prejudicial, judicial, or arbitral settlement agreements in any dispute or administrative, judicial, and/or arbitral claim arising between a contractor and the Public Administration based on alleged breaches of state contractual obligations where there is a certain possibility of recognizing their validity.
Additionally, amendments to Law 17,520, on Public Works Concessions, are also maintained.
4 -Promotion of Registered Employment
The authorization for employers to regularize existing private sector employment relationships initiated prior to the law’s promulgation date is maintained. Regularization may include unregistered employment relationships or inadequately registered ones. The National Executive Branch will regulate the effects of the regularization of these employment relationships.
A period of ninety (90) days is established from the effective date of the regulations issued for this purpose for such regularization to take place.
5- Labor Modernization
The Framework Bill also maintains amendments to Laws 24,013 (Employment), 20,744 (Labor Contract Law), and 26,727 (Agricultural Labor).
Additionally, the repeal of Laws 14,546 (Commercial Travelers), 25,323 (Labor Indemnities), Articles 8 to 17 and 120, section a), of Law 24,013 (Employment), Article 9 of Law 25,013; Articles 43 to 48 of Law 25,345 (Prevention of Tax Evasion); Article 15 of Law 26,727 (Agricultural Labor); and Article 50 of Law 26,844 (Domestic Service) is maintained.
6- Energy
Under Title VI (“Energy”), the amendments to Laws 17,319 (Hydrocarbons), 24,076 (Regulatory Framework for Gas), and 26,741 (Self-Sufficiency in Hydrocarbons, which provided for the expropriation of YPF S.A. and Repsol YPF Gas S.A.) are also maintained.
Additionally, the authorization remains for the National Executive Branch to adjust Laws 15,336 (Electricity) and 24,065 (Electricity Regulatory Framework), as well as to develop, with the agreement of the provinces, harmonized environmental legislation aimed at complying with Article 23 of Law 27,007 (aimed to apply international best practices in environmental management to the tasks of exploration, exploitation, and/or transportation of hydrocarbons, ensuring appropriate environmental stewardship).
The creation of the National Regulatory Entity for Gas and Electricity is mandated, which, once established, will replace and assume the functions of the National Electricity Regulatory Entity (ENRE), established by Law 24,065, and the National Gas Regulatory Entity (ENARGAS), established by Law 24,076. The National Executive Branch is tasked with issuing all regulations and acts necessary to implement the creation of the new entity and to draft the corresponding consolidated texts of Laws 24,065 and 24,076.
7-Investments
The Framework Bill maintains, now under Title VII, the creation of the “Regime of Incentives for Large Investments” (RIGI), which establishes certain incentives, legal certainty, and an efficient system for the protection of acquired rights for legal entities undertaking a single project that meets the prescribed requirements. In this regard, it is declared — in accordance with Article 75, section 18 of the National Constitution — that “Large Investments” qualifying and realized under RIGI are of national interest and contribute to the prosperity of the country, the advancement and well-being of all provinces, the Autonomous City of Buenos Aires, and municipalities.
Regardless the legitimate exercise of local jurisdictions and competencies, any regulation or action that limits, restricts, undermines, obstructs, or distorts the provisions established in this title by the Nation or the provinces, individually or through their municipalities, or by the Autonomous City of Buenos Aires, which have adhered to RIGI, shall be null and void with absolute and incurable nullity. The competent judicial authority must immediately prevent its application.
Regarding eligible legal entities (Chapter II), it is now stipulated that adherence to RIGI will no longer apply to “any sector” — as originally established in the Bill approved by the Chamber of Deputies — but specifically to those in the “forestry industry, infrastructure, mining, energy, and technology” sectors that meet the necessary requirements.
Regarding the exchange incentives under RIGI (Chapters IV and V), the obligation to liquidate foreign currency in the exchange market is limited to the currencies received from exports of products generated by the projects. This obligation will be 20% after two years from the start of the investment, 40% after three years, and 100% from the fourth year onwards.
The chapters related to the stability regime of RIGI and its compatibility with other regimes (Chapter VI), the termination of incentives under RIGI (Chapter VII), the infractional and recursive regime (Chapter VIII), the creation of the Implementing Authority (Chapter IX), the jurisdiction and arbitration regime (Chapter X), and the invitation to local jurisdictions to adhere to the regime (Chapter XI) are also maintained.
Juan Antonio Stupenengo