Ministry of Productive Development – Mining Secretariat: Resolution No. 26/2021.
CIRCULAR
Mining Law Department Report | Ministry of Productive Development – Mining Secretariat: Resolution No. 26/2021
Dear Sir or Madam,
Resolution No. 26/2021 (the “Resolution”), published in the Official Gazette today, establishes the procedure related to the Federal Mining Investment Law No. 24,196 (the “Procedure”), regarding sections 28 (false or delayed filings) and 29 (sanctions).
The Resolution establishes that the Procedure will be initiated when there are facts or circumstances that indicate –prima facie– non-compliance with the obligations established by Law No. 24,196 (the “FMIL”), the regulatory decree, and the subsequent resolutions issued by the Enforcement Authority.
The Procedure seeks to guarantee: (i) the right of defense of the beneficiaries registered before the FMIL´s Registry and, (ii) the celerity in the process, which contributes to promoting conducts adjusted to the regulations in force, simplify the administrative interventions to resolve equitably and timely thus avoiding the use of tax benefits by those who do not comply with the obligations arising from the promotional regime established under the FMIL.
Pursuant to Section 2, the preliminary investigation leading to the Procedure will be ordered by means of an administrative act of the Enforcement Authority on the basis of the audit and inspection reports, partially or totally unfulfilled notices, and/or the relevant evidence. The administrative act will have to clearly indicate the fault that prima facie is imputed to the beneficiary company registered before the Registry of the FMIL.
The imputed company will be notified of the act of preliminary investigation and will be given ten (10) days to present its defense, submit any documentation and offer any evidence it deems necessary to submit.
Pursuant to Section 4, once the notice has been answered -or the term to do so has expired-, if there is evidence offered, the Authority shall rule on its admissibility and, if applicable, shall set a term to provide it, which shall not exceed twenty (20) administrative working days. This decision shall not be subject to appeal, without prejudice to its discussion at the time of filing an appeal against the final definitive act. Within the same term, the proceedings ordered ex officio shall be ordered.
The time limit for taking evidence may be extended by means of a substantiated decision of the Authority if its production has been delayed for reasons not attributable to the accused, or for any other matter considered by the Authority that is essential for the settlement of the procedure.
The accused company may waive the use of evidence offered in its defense unless the Authority considers that it is conducive to arrive at the material truth of the case.
If the accused company admits the infringement, the Authority shall prepare the final report and without further proceedings, after the intervention of the legal department, the corresponding administrative act shall be issued. The acknowledgment shall be considered for the purposes of the sanction graduation.
Section 5 establishes that when the Procedure had been initiated due to non-compliance with formal obligations, no evidence shall be admitted other than the evidence of filing before the Enforcement Authority, prior to the expiration of the term established or, if applicable, of the term granted in the summons issued to the applicant. Said documents must be sealed as received by the Enforcement Authority, clearly showing the date and the agency if they are on paper, or the complete file number if they have been submitted electronically.
In the event that the accused company proves that it complies with its obligations in due time and form, the Procedure shall be concluded without further proceedings, and the Authority’s final report shall order the immediate filing of the proceedings and, if applicable, the lifting of any preventive measures that may have been ordered.
Under Section 6, at the end of the probationary period, the Authority will prepare a final report. The Authority’s report shall indicate whether the accused company has incurred a reproachable offense falling under any of the cases provided for in Section 28 of the FMIL or, on the contrary, whether it is appropriate to declare the non-existence of the offense, releasing the defendant from liability.
In the event that the Authority considers the infraction to have been committed, it shall indicate in its report the sanction that in its judgment is applicable to the accused company, taking into consideration the circumstances that may mitigate or aggravate the conduct and the history of previous sanctions.
Likewise, in the event that the accused company has made use of the right to defend itself, the Authority shall decide whether or not it is appropriate to accept it in whole or in part.
The Enforcement Authority, after the intervention of the permanent legal department of the Secretariat of Domestic Trade, shall issue the applicable administrative act resolving the procedure.
In the appropriate cases, the administrative act shall be notified to the Federal Tax Authority (“AFIP”) and/or to the provincial or national authorities with competence in the matter, in accordance with Section 8 of the Resolution.
During the course of the Procedure, the Competent Enforcement Authority may order the precautionary measures it deems appropriate to protect the tax interest, which -if applicable- shall be notified to the AFIP pursuant to Section 9 of the Resolution.
Under Section 10 of the Resolution, the Abbreviated Procedure is established. Thus, when the beneficiary company incurs -prima facie- in any of the infringements provided for in the FMIL, Section 28, subsection c), the Procedure shall be governed as follows:
Upon expiration of the term provided for compliance with the obligations inherent to the condition of the beneficiary of the FMIL, the use of the benefits derived from the promotional regime shall be automatically suspended and the registered company shall be notified for a term of ten (10) days. For such purposes, no evidence shall be admitted other than the proof of having complied with the obligation before the Enforcement Authority in due time and form, that is to say, prior to the expiration of the legally established term or of the term granted in the notice issued.
Once it is proved that the registered company has complied with its obligations as indicated above, the suspension of benefits shall be immediately lifted, and the proceedings shall be filed without any further formalities.
If the registered company does not submit proof of having complied with its obligations on time or if the term to do so expires, a final report shall be prepared and, after the intervention of the Permanent Legal Department, an administrative act shall be issued to impose a fine, which shall be graduated according to the seriousness of the offense, which shall be assessed in the final report. The suspension of the use of the benefits will continue until the payment of the fine and the fulfillment of the corresponding obligation is accredited.
The recurrence of the non-compliance with the formal obligations in isolated fiscal years will be considered as an aggravating factor for the determination of a new sanction.
This procedure may only be used in up to three (3) opportunities per registered company and provided that no more than five (5) consecutive periods are owed at a time, and in all other cases a proceeding shall be carried out under the terms of the Resolution, Section 5.
Furthermore, under the Resolution, Section 11 establishes the possibility of keeping the proceedings of the Procedure confidential. In this regard, it establishes that exceptionally and based on justified grounds, it may be requested that the file or documents contained in the Procedure be declared confidential proceedings when, in the opinion of the authority, the confidentiality of the proceeding is essential for the purposes of the development of the preliminary investigation.
The request shall be initiated at the request of the Mining Investment Directorate and/or the Federal Mining Investment Directorate, with a report justifying the need for the measure, the circumstances of the case, and the consequences that publicity would imply for the investigation.
After the intervention of the Permanent Legal Department, the authority with a rank no lower than an Undersecretary shall issue the administrative act declaring the confidentiality, establishing the term for which the measure is in force and, if applicable, identifying the documents that are considered confidential or secret.
In any case, the confidentiality will always be temporary in order not to affect the right of defense of the beneficiary company.
Following the technological changes implemented by the Mining Secretariat, Section 12 of the Resolution establishes that the Procedure will be digital and will be processed through the “Remote Procedures” (TAD) platform of the Electronic Document Management System (GDE).
When the proceedings were being processed on paper at the date of publication of this document, they will be digitalized, and their processing and notifications will continue electronically. The order instructing the digitalization shall be notified to the electronic address constituted under the terms of Section 19, paragraphs b) and d) of the Regulations on Administrative Procedures, by means of Decree No. 1.759/72 – T.O. 2017.
If the accused company has not set up an electronic office under the terms of subsection d) of Article 19 of the above-mentioned regulation, it will be notified -with the indication of the file number for which the proceeding or the abbreviated procedure has been filed- at the domicile established before the Registry of the Mining Investment Law or at the last tax domicile registered before the Federal Administration of Public Revenues to set up an electronic office and, if applicable, to complete its registration before the Ministry of Production Single Regime (R. U.M.P.), within ten (10) days, under penalty of considering it as not submitted and continuing the proceedings without its intervention.
At any time, the registered company may set up an electronic address and present itself in the file of the same Procedure, continuing the proceedings in the procedural status in which they are.
Section 13 of the Resolution establishes that the administrative act of proceeding may be issued by the Directors of the Mining Investment Directorate, the Federal Mining Investment Directorate, or the Undersecretariat of Mining Development.
The act resolving the proceeding or abbreviated procedure shall be issued by the head of the Mining Secretariat.
Likewise, Section 14 resolves that the proceedings that were in process at the time this Resolution was issued must adapt their proceedings to the procedure established herein, except for those proceedings in which the hearing of the proceedings had already been notified under the terms of Resolution No. 169, Section 2, subsection f), dated September 29, 1993, of the Secretariat of Mining.
Under Section 15, Resolution No. 169/93 of the Mining Secretariat is repealed.
Finally, pursuant to Section 16, the Resolution shall enter into force as from the day following its publication in the Official Gazette (01/29/2021).
Please, do not hesitate to contact us should you require any further information on this matter.
Sincerely,
Marcos Moreno Hueyo
Dolores Reyes