Analysis of some amendments and measures for the deregulation of the economy in DNU 70/2023

On December 21, 2023, the newly elected President of Argentina, Javier Milei, signed the Emergency Decree N° 70/30 (the “Decree” or “DNU”) regarding the “Bases for the Reconstruction of the Argentine Economy” (Bases para la Reconstrucción de la Economía Argentina). This is an extremely comprehensive Decree that repeals several laws and amends numerous regulations in order to deregulate the economy. Among other things, it provides for far-reaching changes to public law, labor law and numerous regulations for trade, services and industry. These changes are still subject to a vote by the Argentinian parliament.

The most important aspects of the Decree and the possible legal consequences are explained below.

I. Reasons and Objectives of the Decree

Argentina is facing a deep economic, political, and social crisis. The preamble of the Decree refers to the current situation as a “terminal crisis” To avoid further deterioration, it is deemed necessary to immediately eliminate the “governmental obstacles and restrictions” hindering economic development. These obstacles are the laws that the new government seeks to repeal through the Decree. Accordingly, the Decree is intended to lay the foundation for the reconstruction of the economy. The Decree has three main objectives (Art. 1 to 3 DNU):

Declaration of Emergency: The Decree declares a “public emergency” in the areas of economy, finance, taxation, administration, social security, customs, health, and social affairs until December 31, 2025.
Deregulation of the Economy: It expressly provides for “broad deregulation of trade, services, and industry” throughout Argentina.
Increased Integration of Argentina into World Trade: The Decree also states that the Executive will adopt international standards in trade in goods and services. The Mercosur is mentioned by name, as well as WTO and OECD recommendations.

Can laws be repealed by Decree in Argentina?

Yes, the power of the President to issue a Decree of necessity and urgency is regulated in Article 99, paragraph 3 of the Argentine Constitution. The DNU is a legal instrument that allows the head of state to take legislative measures under “extraordinary circumstances.” However, the procedure is complex and requires approval by the Parliament. The legislative control procedure is regulated by Law 2622 and is implemented through a statement by the permanent bicameral commission, which must be presented to both chambers of Parliament (Senators and Deputies) simultaneously, and they must either approve or reject the Decree in its entirety. The Decree is considered rejected even if only one chamber does not accept it.

According to Law 26122, a DNU remains in force until explicitly rejected. Rejection resulted in the repeal of the Decree. However, rights acquired or granted during the validity of the DNU are not affected by a possible repeal, according to Law 26122.

The use of this instrument is prohibited in some areas, such as tax, electoral, and criminal matters. The DNU of the new government is so comprehensive that it even repeals laws with tax aspects. This could lead to it being declared unconstitutional by the Parliament or the courts. However, the law was enacted by the President of the country and jointly signed by all State Ministers, as required by the Constitution.

II. Changes and Measures of the Decree

Below are the most important legal changes and measures enacted.

Transformation of State-Owned Enterprises

The reforms contained in the Decree regarding the transformation of state-owned enterprises lead to profound changes in the corporate structuring possibilities of state-owned enterprises. Accordingly, the regulations preventing the privatization of companies in Argentina are to be repealed. Namely, these are: Law No. 13,653 on state-owned enterprises, Decree-Law No. 15,349 on mixed economy enterprises, and Law No. 20,705 on state-owned enterprises. The Decree expressly provides that all state-owned enterprises in which the federal government holds shares shall be converted into joint-stock companies so that they can subsequently be privatized (Art. 48 et seq. DNU).

It also provides that the newly structured companies:

are subject to Law No. 19,550 on general companies, which applies to companies in which the federal government is not involved,
do not receive public-law privileges, are not granted advantages in the procurement of goods and services, and are not entitled to preferential treatment or the granting of benefits in their legal relations,
are subject to the control of the competent authority,
only be subject to Law No. 24,156 on financial management and control systems of the public sector and the implementing provisions if the federal government holds a majority stake in the company.

In addition, the Decree provides that newly established joint-stock companies may participate in a program to transfer their shares to their employees or in another privatization process according to the foregoing provisions. For this purpose, the Decree amends the regulations provided for in Law No. 23,696 on state reform for the ownership participation program. Furthermore, certain restrictions preventing the privatization or transfer of the shares held by the federal government are lifted.

The Decree sets a deadline of 180 days from the date of publication for companies to implement the changes and register with the competent authority.

Changes to Civil and Commercial Code

Legal regulations regarding foreign currencies

The Decree provides that monetary amounts owed under contract must be settled in the currency agreed upon between the parties. Performance by an equivalent in the national currency is only possible if expressly agreed upon between the parties.

Private autonomy

The changes to the Civil and Commercial Code strengthen the legal validity of the parties’ will regarding contract formation. However, the Decree also contains provisions that affect the private autonomy of the parties, as judges still have a considerable amount of legal discretion granted to them by the authorization law. “Freedom of contract: The parties are free to conclude a contract and determine its content within the limits set by law or public policy. The legal provisions always apply supplementary to the intention expressed by the parties in the contract, even if the law does not expressly provide for this for a particular type of contract, unless the provision is mandatory. However, the provisions must always be interpreted restrictively.”

The immediate effect is the deletion of the reference to morals and good manners contained in the original text. However, the assumption now made, that these are supplementary and not mandatory laws, contradicts Article 962. Article 962 states: “Character of legal provisions. Legal provisions on contracts supplement the will of the parties, unless their wording, content, or context indicates otherwise.” It remains to be seen how this contradiction will be addressed in practice.

Powers of Judges

In its original wording, Article 960 empowered judges, upon request of a party and with the existence of a legal authorization (e.g., in case of harm or hardship), “or ex officio in case of an obvious impairment of public order” to modify contract provisions. The latter alternative has been deleted. This change further strengthens private autonomy, as judicial intervention ex officio due to an impairment of public order is no longer possible.

Integration of a void clause into the contract

Article 989(2) of the Civil and Commercial Code obligated the judge, in the case of a void contractual clause, to integrate his decision on the void clause into the contract if the purpose of the contract could not continue to exist without the disputed clause. However, this legal provision was in contradiction with the principles of general civil law. If a contract cannot continue to exist without an ineffective clause, there is no partial invalidity but total invalidity. However, this problem is not entirely resolved by the Decree, as the second paragraph of Article 989 remains. This article is similar in content to the repealed part of Article 989: “In case of partial invalidity, the judge, if necessary, must integrate the act according to the type of case and the interests that can reasonably be considered to be pursued by the parties.” It remains to be seen how the courts will resolve this in practice.

Changes in Corporate Law

The Decree primarily aims at the strong deregulation of the Argentine economy and the change in the legal status of companies in state ownership by transforming state-owned companies into joint-stock companies under the provisions of the General Companies Law (“LGS”) No. 19,550, T.O. 1984 and the amendments made therein, with the aim of improving transparency and corporate governance within these companies.

To facilitate the implementation of certain reforms in other areas, the Decree has made changes to corporate law in the following areas:

With regard to their subsequent privatization, the legal status of public companies is changed by converting them into joint-stock companies falling within the scope of the LGS. This provision applies to state-owned enterprises without legal form, state-owned enterprises, joint-stock companies with a state majority interest, mixed economy enterprises, and all other corporate organizations in which the state participates in capital or decision-making and have not been founded as joint-stock companies. Similarly, the repeal of Decree-Law No. 15,349/46 on mixed economy enterprises, Law No. 13,653 on the legal regulation of state-owned enterprise activities, and Law No. 20,705 on state-owned enterprises was decided upon.
Likewise, Article 299 of the LGS has been amended to remove the reference to mixed economy companies and joint-stock companies with a state majority interest (Section VI of the LGS) and to include joint-stock companies with state participation, regardless of whether it is the participation of the National State, Provincial States, the Autonomous City of Buenos Aires, municipalities, and/or state bodies legally authorized for this purpose. These companies are subject not only to regulatory supervision during their establishment but also during their operation, dissolution, and liquidation by the supervisory authority. Section VI of the LGS, which regulates companies with a majority state interest, has not been repealed.

Due to the purpose of Law No. 20,655, aimed at introducing new corporate forms for the establishment of companies within the “sistema institucional del deporte y la actividad fisica” and expanding the corporate law possibilities of these companies, the following sections of the LGS have been changed:

Article 30, which allows non-profit associations and corporations to become part of joint-stock companies and participate in all company contracts.
Article 77, paragraph 1, which provides that civil associations may convert into a commercial company or decide to join a joint-stock company, requiring a two-thirds majority of the shareholders.

Changes in Labour Law

Registration of the employment contract

A new simple, agile and expeditious labor registration system is ordered to be created, which must be defined by regulation through a simple electronic registration mechanism.

The Decree establishes that, in the case of intermediation (temporary service companies, contractors, fictitious employer, etc.), the registration by any of the parties involved in the intermediation chain is sufficient and legal for the purpose of evaluating whether the obligation to register the worker has been complied with.

Repeal of fines

Fines for lack of or deficient labor registration are repealed. The law repeals, on the one hand, the most severe fines arising from the Employment Law 24013. Law 25,323, which contemplated a fine for lack of registration or defective registration (article 1) and a fine for forcing the worker to file an administrative or judicial claim to collect the corresponding indemnity (article 2), are repealed. This amendment will reduce litigation as it eliminates an important economic incentive for the initiation of lawsuits against companies.

Deficient or irregular registration

The employee may denounce the lack or deficient registration before the AFIP (Federal Agency of Public Revenues). In the event of legal proceedings, the Judge will send the records to the AFIP, which will determine the relevant debt in respect of social security dues and contributions. The corresponding debt will take into account the contributions paid by the worker as self-employed or as a single taxpayer.

Certificates of employment

Article 80 of the Labor Contract Law (“LCT”) is amended and a new system for the delivery of labor certificates is created through the uploading of such digital documents to an official site or virtual platform to be designed by the administration, to which the employee may access with a password.

Contracts for works, services or agency:

Article 2 is amended and it is introduced that the LCT does not apply to contracts for the contracting of work services or agency contracts regulated by the National Civil and Commercial Code.

Unavailability of labor rights

The law amends Article 12 of the LCT, providing for the possibility that the employer may agree with the employee the modification of essential aspects or conditions of the employment contract. These agreements, as well as the termination agreements of article 241 LCT (mutual agreement), may be submitted to the enforcement authority (SECLO, Secretaries of Labor, etc.) for approval.

Probationary period

The probationary period (art. 92 bis LCT) is extended from 3 to 8 months.

Maternity Leave

The prohibition for pregnant women to work during the 45 days before and after childbirth is maintained, but they are granted the option to reduce the pre-birth leave to 10 days (previously 30 days).

Working hours

Article 197 bis is incorporated to the LCT, providing for the possibility that within the framework of collective bargaining and respecting the minimum 12-hour rest period between working days, the parties may agree on extensive overtime schemes, bank of hours, compensatory time off, etc.

Justifiable dismissal

The power of the parties to the employment contract to terminate it with just cause in the event of breaches which, due to their seriousness, make the continuation of the employment relationship impossible is maintained. However, the Decree introduces to article 242 of the LCT the following conducts that are considered objective causes of dismissal with just cause:

participation in blockades or takeovers of establishments;
when participation in strikes: 1) affects the freedom of work of those who do not participate in the measures of force, or 2) prevents or obstructs the entry of persons or things to the establishment; or 3) causes damage to persons or things belonging to the company or third parties.

Seniority compensation (Unjustified dismissal)

In this regard, it is expressly provided that neither the Supplementary Annual Salary (SAC) nor the semiannual or annual payment items (mainly prizes or bonuses) will be included in the salary basis for the calculation of the seniority indemnity.

Changes in the Healthcare Sector

Amendment of Legal Framework for State Laboratories

Article 264 of the Decree abolishes Law No. 27,113, which declared the activity of public production laboratories involved in the research and production of pharmaceuticals, pharmaceutical raw materials, vaccines, supplies, and medical devices as a matter of national and strategic public interest. The repeal aims to strengthen the competitiveness of state laboratories by relieving them from additional regulations compared to private laboratories. With the repeal, the National Agency for Public Laboratories (ANLAP) is also abolished. Its duties included shaping public policy for the research and public production of pharmaceuticals, pharmaceutical raw materials, vaccines, supplies, and medical devices, as well as their distribution in the health system.

Article 265 repeals Decree No. 743/2022, which, among other things, stipulated that private health insurance companies were required, from January 1, 2023, to offer their policyholders the same benefits they had offered their policyholders at the time Decree No. 743/2022 came into effect, without requiring any additional payments from policyholders.

Mandatory Prescription of Medications Using Generic Names

Article 266 abolishes the option of prescribing medications under their brand names. The Decree replaces Section 2 of Law No. 25,649, titled “Promotion of the Use of Medications by Their Generic Name.” The new wording of Section 2 stipulates that all medical prescriptions must be issued exclusively using the generic name of the medication, followed by the dosage form, dosage/strength, and concentration details. Previously, it was possible to include the brand name of the medication on the prescription alongside the generic name. In such cases, upon the consumer’s request, the pharmacist was obliged to replace the brand name of the prescribed medication with a cheaper alternative. This mechanism is now abolished as prescribing using the brand name of the medication is now prohibited.

Amendment of Legal Framework for Private Health Insurance

Article 267 of the Decree abolishes the following subsections of Law No. 26,682, known as the “Regulatory Framework for Private Health Insurance Providers.”

Subsection 5.g) authorized the Ministry of Health of the country, through the Health Regulatory Authority (“HRA”), to approve and review fees for private health insurance contracts. Subsection 5.m) authorized the HRA, in case of insolvency or cessation of activity of a health insurance provider, to transfer the insurance coverage of its members to another insurance provider with similar insurance coverage and similar fees.
Subsection 18 established that the HRA sets the mandatory minimum fees to be charged by public and private providers to ensure their efficient services.
Subsection 19 required private health insurers to adopt the contract models established by the HRA.
Subsection 25.a) stipulated the payment of an annual fee by various entities as one of the sources of financing for the goals of the law.
Finally, subsection 27 established an advisory body, the so-called Permanent Concertation Council, composed of representatives of the parties involved (Ministry of Health of the country, HRA, users, service providers, among others).

Article 268 inserts Article 30a into Law No. 26,682, stating that the law applies only to voluntary members insured by insurers not covered by Law No. 23,660, the “Regulation for the Application of Public Health Insurance.”

Article 269 replaces Article 17 of Law No. 26,682. In its previous version, Law No. 26,682 authorized the HRA to monitor the adequacy of contributions for benefit plans and, if necessary, to approve contribution increases. This has been abolished, retaining only the possibility for service providers to set different prices for benefit plans depending on the age group of the insured at the time of contracting, with the price for the oldest age group not exceeding three times the price for the youngest age group at maximum.

Amendment of Legal Framework for Public Health Insurance (Law No. 23,660)

Article 270 of the Decree extends the regulation applicable to public health insurances to all entities falling under Law No. 26,682, the “Regulatory Framework for Private Health Insurance” (i.e., private health insurance, cooperatives, mutual associations, civic associations, and foundations whose purpose, wholly or partially, is to provide users with prevention, protection, treatment, and rehabilitation of human health).

Article 271 replaces Section 2 of Law No. 23,660. According to the new provisions, different types of entities will be subject to special legal regulations. The corporations mentioned in subsections c), d), and h) of Section 1 will operate as non-governmental public law corporations with legal, financial, and administrative independence and will have the status of a legal entity within the framework established by the Civil and Commercial Code of the country for legal persons; the corporations mentioned in subsections a), b), and f) will operate with administrative, accounting, and financial independence and will have the status of a legal entity as defined in Section 148 of the Civil and Commercial Code of the country.

Article 272 amends the wording of Section 3 of Law No. 23,660. Previously, this section applied only to public health insurances. The new wording includes “all establishments mentioned in Section 1,” thus extending the scope to establishments falling under Law No. 26,682.

Article 273 replaces Section 4 of Law No. 23,660. Previously, this section applied only to public health insurances. In the new version, all establishments mentioned in Section 1 are included, extending the scope to establishments falling under Law No. 26,682. Additionally, some aspects of the documentation to be submitted have been changed.

Article 274 abolishes Section 5 of Law No. 23,660, which stipulated that public health insurances must allocate at least 80% of their gross income to providing health services to the beneficiaries covered by the insurance.

Article 275 replaces Section 6 of Law No. 23,660. Previously, this section applied only to public health insurances. The new wording includes all establishments from Section 1 and thus extends its application to establishments falling under Law No. 26,682.

Article 276 replaces Section 7 of Law No. 23,660, replacing ANSSAL with the HRA as the authority empowered to make binding decisions for establishments that exclusively concern their status as health insurance representatives.

Article 277 replaces Section 8 of Law No. 23,660. Previously, this section applied only to public health insurances. The new wording includes all establishments from Section 1, thus extending its application to establishments falling under Law No. 26,682.

Article 278 replaces the last paragraph of Section 9 of Law No. 23,660, replacing the national Directorate of public health insurances with the HRA as the entity authorized to approve the inclusion of relatives in ascending or descending line (family members) of the main beneficiary in the insurance plan.

Article 279 replaces subsection e) of Section 10 of Law No. 23,660 regarding seasonal workers who are insured during periods of non-employment. This insurance coverage ends when the worker becomes the main beneficiary according to Section 8 of the law due to another employment contract.

Article 280 of the Decree abolishes Section 10.f) of Law No. 23,660. This provision had already become obsolete as it provided that individuals required to perform military service did not have to pay contributions without losing their insurance coverage.

Article 281 replaces Section 11 of Law No. 23,660. Previously, this section applied only to public health insurances. The new wording includes all establishments from Section 1 and thus extends its application to establishments falling under Law No. 26,682.

Article 282 of the Decree replaces Section 12 h) of Law No. 23,660. Previously, this section applied only to public health insurances. The new wording includes all establishments from Section 1, thereby extending its application to establishments falling under Law No. 26,682.

Article 283 replaces Section 15 of Law No. 23,660. The new wording replaces ANSSAL with the HRA as the body with supervisory and control powers over public health insurance providers.

Article 284 replaces Article 19 of Law No. 23,660. According to the new wording, the employer, as a withholding agent, must deposit the contribution for which they are responsible, along with the contributions they should have withheld from the personnel under their jurisdiction, within fifteen (15) calendar days from the day of payment of the remuneration to the entity chosen by the beneficiary and through the appropriate mechanism of the entity responsible for collection.

Article 285 introduces subsection 19a into Law No. 23,660, stipulating that establishments that receive additional contributions beyond those provided for in paragraphs a) and b) of Article 16 (6% employer and 3% employee contribution) must deposit 20% into the solidarity fund.

Article 286 replaces Article 21 of Law No. 23,660 and replaces the national Directorate of public health insurances with the national Insurance Supervisory Authority. The latter is responsible for monitoring and controlling the obligations arising from the law, and its inspectors and officials have the powers and duties assigned by law to the inspectors and officials of the national Directorate for the collection of pensions.

Article 287 replaces the first paragraph of Article 23 of Law No. 23,660. The current wording refers not only to public health insurances but to establishments in general. It provides that the corresponding funds must be deposited in banking institutions and may only be used for providing services and fulfilling obligations, as well as covering administrative costs of management.

Article 288 of the Decree replaces the first paragraph of Article 24 of Law No. 23,660. Previously, this section applied to public health insurances. The new wording includes all establishments and thus extends its application to establishments falling under Law No. 26,682.

Article 289 replaces Article 25 of Law No. 23,660, eliminating the national Directorate of public health insurance providers created by the law in its original version. Its functions are now within the purview of the HRA.

Article 290 of the Decree replaces Article 26 of Law No. 23,660. According to the new wording, the HRA is tasked with promoting, coordinating, and integrating the activities of establishments not subject to the National Health Insurance System Law and also serves as the supervisory authority for the administrative and accounting aspects of public health insurance providers. Originally, these tasks fell within the purview of the national Directorate of public health insurance providers.

Article 291 replaces Article 27 of Law No. 23,660. The Decree does not change the powers of the implementing authority but adjusts the wording by replacing the national Directorate of public health insurance providers with the HRA.

Article 292 includes Article 28 of Law No. 23,660, stating that despite the Decree, which includes all establishments regulated by Law No. 26,682 in the scope of Law No. 23,660, the sanction regime of Law No. 26,682 still applies to them.

Article 294 abolishes Article 42 of Law No. 23,660. Article 42 stipulated that the functions and powers of the national Directorate of public health insurance providers would be assumed by the national Institute of public health insurance until Law No. 23,660 was regulated and the new organization commenced its activities.

Changes Regarding the National Health Insurance System

Article 295 of the Decree amends the last paragraph of Article 2 of Law No. 23,661, the “National Health Insurance System” law. According to the current wording, the establishments mentioned in subsection i) of Law No. 23,660 (i.e., all establishments falling under Section 1 of Law No. 26,682) are considered insurance representatives.

Article 296 replaces Article 5, a) of Law No. 23,661. Previously, insurance coverage applied to all beneficiaries mentioned in the “Law on Public Health Insurances.” With the new formulation, it refers to all beneficiaries mentioned in Law 23,660.

Article 297 replaces Article 15 of Law No. 23,661 and expands the reference to natural insurance representatives by mentioning not only public health insurers but also all establishments mentioned in Law No. 23,660 (including those mentioned in Section 1, subsection i).

Article 298 of the Decree replaces Article 17. a) of Law No. 23,661. The new wording refers to the establishments mentioned in Law No. 23,660, not the “health insurance funds mentioned in the Public Health Insurance Law.”

Article 299 of the Decree replaces the last paragraph of Article 17 of Law No. 23,661 concerning the national register of insurance providers. It stipulates that registration enables the authorized person to allocate the funds intended for health services in accordance with Law No. 23,660. The previous wording referred to the allocation of health services as provided in the “Public Health Insurance Law.”

Article 300 of the Decree replaces Article 21 a) of Law No. 23,661 and specifies that the system to guarantee the services provided for in the law is based on the scope of services that the establishments mentioned in Law No. 23,660 must provide to their beneficiaries.

Article 301 replaces Article 22a) of Law No. 23,661, which concerns the funds comprising the solidarity redistribution fund. The Decree specifies that the funds mentioned in Law No. 23,660 and its amendments are included as a source of financing.

Changes to the Regulation on Traceability Verification and Technical Suitability of Active Medical Devices

Article 302 of the Decree repeals sections 6, 7, 8, and 11 of Law No. 26,906. Sections 6 to 8 established the procedures for the approval, qualification certification, and technical testing of active medical products in Argentina. Article 6 empowered the enforcement authority to establish the identification mechanism for these products. Article 7 stipulated that health authorities should issue qualification certificates in accordance with technical testing requirements. Article 8 excluded technical testing upon renewal of devices whose manufacturers could demonstrate performance characteristics during the warranty period, but allowed biomedical services to conduct testing and monitoring even during the warranty period.

On the other hand, Section 303 incorporates sections 51 and 52 into Law No. 26,906, which stipulate that the regulatory authority determines the active medical products approved for use in the country. Active products not approved by the regulatory authority may not be used. Additionally, users of active medical devices must inform the regulatory authority about the installation and use of such devices. Furthermore, the regulatory authority establishes the requirements and procedures for the use of active medical devices and reserves the right to verify compliance.

Finally, Article 306 replaces Article 16 of Law No. 26,906. Among the tasks of the regulatory authority is the power to approve active medical products for use throughout the country and to establish the application conditions for each approved medical product. The requirement to maintain a register for repair and maintenance services is now eliminated.

Digitization of Prescriptions

Handwritten prescriptions are abolished by the Decree, and new provisions regarding the issuance of electronic prescriptions are introduced.

Regarding Law No. 27,553 on electronic or digital prescriptions, the Decree emphasizes the need for its reformulation to fully transition to the use of electronic prescriptions. This change aims to increase industry efficiency, minimize costs, and consequently enhance competitiveness in the market.

Article 307 of the Decree replaces Article 1 of the Electronic or Digital Prescription Law, so that the prescription and dispensing of medications, as well as any other form of prescription, must be done exclusively through properly authorized electronic platforms. The requirements of Law No. 26,529 on Patient Rights must be preserved.

Article 308 replaces Article 3 of Law No. 27,553, and establishes that the national executive will set the necessary deadlines for the complete digitization of prescription and dispensing of medications, as well as any other form of prescription. This deadline cannot be extended beyond July 1, 2024. Additionally, the use of telemedicine platforms in healthcare is regulated.

Finally, Article 309 replaces Article 13 of Law No. 27,553. In this way, the reference to handwritten signatures in the prescription and dispensing of medications is eliminated, restricting it to electronic or digital signatures.

Right to Choose Health Insurance Provider (Public and Private)

Article 311 of the Decree replaces Article 13 of Decree 504/1998. Under the previous wording of Article 13, workers had to remain in the public health insurance of their sector for at least one year before they could exercise the right to switch providers. According to the new wording of Article 13, workers can exercise the right to choose the insurance provider at the beginning of their employment, without having to wait one year.

Article 312 replaces Article 14 of Decree No. 504/1998. The previous wording of Article 14 required members who exercised the right to switch to remain with the chosen public health insurance for at least one year to exercise the right to choose again. The new wording of Article 14 provides that the regulatory authority establishes the minimum duration that members must remain with the chosen public health insurance institution. However, the minimum duration must not exceed one year.

Changes to the Legal Framework for the Practice of Pharmaceutical Activities and the Authorization of Pharmacies, Wholesalers, and Specialty Medicinal Herbal Shops

Article 313 of the Decree replaces the first and second paragraphs of Article 1 of Law No. 17,565 (“Pharmacy Law”). The new wording of the first section establishes that the issuance of prescriptions, the dispensing of prescription drugs, and prescription pharmaceuticals can only be done in authorized pharmacies. This obligation does not seem to extend to products for which a prescription is not required, such as over-the-counter medications.

Article 314 adds a final paragraph to Article 2 of Law No. 17,565, providing for the possibility that pharmacies may be established in any legal form permitted under current law.

Article 315 replaces Article 4 of Law No. 17,565 and eliminates the requirement for prior approval by the health authority for the partial or complete transfer of a pharmacy, as well as approval by registration of the contract in the public commercial register.

Additionally, the obligation to inform the health authority about reforms, expansions, temporary or permanent closures, or reopenings of pharmacies is eliminated. Finally, the last paragraph of Article 4, which provided that any pharmacy closed for more than 30 consecutive days would be considered a new establishment upon reopening, is struck.

Article 316 replaces Article 6 of Law No. 17,565, specifying that pharmacies may determine their opening hours themselves and may operate without any restrictions, with the sole obligation to notify these hours to the health authority and comply with business hours.

Article 318 replaces Article 10 of Law No. 17,565. Under the previous wording, records (or digital archives) had to be kept for a) prescriptions, b) narcotics controls, c) psychotropic drug controls, d) inspections, and e) other records deemed relevant by the authority.

The new wording stipulates that records must be kept digitally. It is established that electronic books, electronic or digital signatures, and other technical and legal requirements must comply with the guidelines of the competent authority to ensure the integrity of the records.

Article 319 repeals sections 13, 20, 27, 40, 41, 42, 43, and 44 of Law No. 17,565, which included the following:

Article 13 prohibited the establishment of optician shops in pharmacies.
Article 20 prohibited the simultaneous practice of the professional title of a doctor or dentist alongside the professional title of a pharmacist. It was also stipulated that a pharmacist who also holds the title of biochemist cannot act as the technical director of a pharmacy while simultaneously serving as the technical director of a clinical analysis laboratory. The prohibition of establishing a medical or dental practice within the premises of a pharmacy was also lifted.
Article 27 regulated the procedure for the extraordinary and temporary absence of the technical director of the pharmacy. This provision was eliminated.
With the repeal of Articles 41 through 44, the entire regulatory framework of the Law for Herbal Shops is repealed. Consequently, the requirement for prior approval by the health authority, the requirement of a technical director subject to pharmacy regulations, the restriction on advertising, and the obligation to keep a logbook are eliminated.

Article 320 replaces Article 25 of Law No. 17,565 and lifts the ban on pharmaceutical professionals holding the technical direction of more than one pharmacy. In this sense, it is established that a pharmaceutical professional who is the technical director of more than one pharmacy is required to supervise the preparation and dispensing of medications in all pharmacies under their supervision and to sign the prescription book daily after the last prescription dispensed.

Additionally, Article 321 replaces Article 26 of Law No. 17,565, abolishing the obligation for the continuous presence of the technical director in the pharmacy unless there are exceptional circumstances. Instead, it is established that in the absence of the technical director in the pharmacy, the pharmacy may be managed by: a) an assistant pharmacist authorized to issue prescriptions in these cases; or b) dispensing assistants who may issue prescriptions only with the approval of the technical director, as provided for in the regulations.

Article 322 replaces section 28.d) of Law No. 17,565, which excludes the obligation of the technical director to possess a plan of the approved premises of the pharmacy. In the current version, this provision is replaced by the obligation to only present evidence of the approval of the operation.

Article 323 replaces Article 36 of Law No. 17,565 and, in its new wording, lifts the ban on wholesalers issuing prescriptions.

Article 324 replaces Article 38.a) of Law No. 17,656. The Decree establishes that the holder of the authorization for a wholesale establishment and its technical director must ensure that the drugs and products included in the establishment’s activity are acquired exclusively by persons authorized to sell them and that they, in turn, are only dispensed to pharmacies and laboratories or directly to the public if they also decide to constitute themselves as public retail pharmacies. This inclusion grants wholesalers the possibility of direct sales to the public if they decide to establish themselves as retail pharmacies.

Article 325 replaces the last paragraph of Section 40 of Law No. 17,565. Under the previous wording, the books that wholesalers had to keep had to be numbered and bound, written legibly, without altering the sequence of sales records, and no notes could be erased. Under the new wording, these books must be kept electronically without changing the sequence of sales documents.

Changes to the Argentine Digital Law and the Law on Audiovisual Communication Services

The amendments to Law No. 26,522 on audiovisual communication services and Law No. 27,078 on digital media in Argentina aim to facilitate the optimal development of communication services.

Article 326 modifies Article 45 of Law No. 26,522, specifying limits for granting licenses for audiovisual communication services at the local level while allowing for ownership of more licenses than before. These limits include one Amplitude Modulation License (AM) for sound broadcasting, one FM Sound Broadcasting Concession or up to two licenses under certain conditions, and one open television broadcasting authorization. However, the total number of licenses in a main coverage area or a predominantly overlapping group of licenses must not exceed four.

Article 327 lifts the restriction in Article 46 of Law No. 26,522, which prevented the convergence of licenses for satellite direct broadcast services and mobile broadcasting services with licenses for other protected services of a different kind or nature.

The changes incorporated into Law No. 27,078 on digital media to provide more alternatives in the field of Information and Communication Technologies (“ICT”) include the following:

Article 329 amends Article 10 of Law No. 27,078 to expand the definition of “subscription broadcasting” to include subscription broadcasting services via satellite connection. Consequently, there is no longer differential treatment based on the type of connection, with such services now exclusively regulated by Law No. 27,078.

In line with the aforementioned definition of “subscription broadcasting,” subscription broadcasting services over any connection can be registered by ICT licensees.

Additionally, the provision of satellite facilities will be free, with no requirement for authorization, but owners of satellite communication systems must register for their operation to coordinate the use of radio frequencies and avoid interference with other systems, as regulated by the application authority. However, the provision of any ICT services via satellite remains subject to the general regulations for the provision of ICT services, as established in Article 34 of Law No. 27,078.

Under the amendments to Law No. 25,877 on labor law, telecommunications services, including internet and satellite communication, have been classified as essential services, and radio and television services as activities of paramount importance. This change was introduced to ensure a minimum level of service coverage during collective labor dispute actions.

Changes to the Rental Law

The Decree repeals Law 27,221 on the leasing of real estate for tourism and the lease law 27,551. It also includes amendments to the Civil and Commercial Code that affect the rental of housing.

The most relevant changes in the field of real estate rental:

The parties can determine the amount of the security deposit and the currency in which it should be made. The parties can also decide on the method of refunding the deposit at the end.
Lease agreements can be concluded in the legal currency or in foreign currency. The tenant cannot demand payment in a currency other than that stipulated in the contract.
The parties can agree on the adjustment of the rental value. Any index agreed upon by the parties can be used, regardless of whether it is a public or private index, and in the same currency in which the rents were agreed. If the chosen index is no longer published during the term of the contract, an official index published by the National Institute of Statistics and Census with similar characteristics will be used if the price is set in the legal currency, or an index that performs the same function in the country issuing the agreed payment currency.
The parties can determine the due date of the rent payments. However, there must be at least one month between each rental payment.
The term of the lease agreement must be determined by the parties, and if no term is specified, the following rules apply: (1) For fixed-term leases, the term is determined by local customs where the rental property is located. (2) For leases of residential properties, furnished or unfurnished, the duration is two years. (3) For leases not intended for residential purposes, the duration is three years.
The tenant is entitled to terminate the contract at any time by paying 10% of the remaining amount of the future rent from the date of termination until the contractually agreed termination date.
The landlord may terminate the contract for reasons attributable to the tenant for any reason specified in the contract, except for those already established in Article 1219 of the Civil and Commercial Code.
The landlord is obliged to maintain the property in a condition suitable for its intended use, unless the damage was directly or indirectly caused by the tenant.
The tenant can no longer offset the costs and claims of the landlord with the fees from the lease contract.
The landlord’s obligation to cover necessary improvements to the leased property for the tenant, even if they were not agreed upon, when the contract is terminated without fault of the tenant – except for destruction of the property – has been repealed.
The article that provided the possibility of notifying the other party within the last three months of the lease and inviting them to extend the contract within a period of up to 15 calendar days has been deleted. Also, the tenant’s possibility of terminating the contract in advance due to the silence or refusal of the landlord without payment of compensation has been repealed.
Real estate lease contracts for tourist, vacation, or similar purposes with a duration of less than three months (by a single contract or by consecutive contracts) are no longer subject to the regulations applicable to lodging contracts.

Repeal of the Rural Lands Law

With the repeal of Law 26,737 on rural lands, certain restrictions applicable to foreign natural or legal persons wishing to acquire rural lands within Argentine territory are lifted.

The following restrictions are removed:

Foreigners may not own or possess more than 15% of rural lands throughout the national territory or within the area of the respective province, municipality, or equivalent administrative unit where the property is located;
Individuals of the same foreign nationality together may not own or possess more than 30% of the aforementioned 15% of rural lands;
One single foreign individual may not own more than one thousand hectares within the Argentine core zone (north of the Province of Buenos Aires and south of the Provinces of Córdoba and Santa Fe) or an equivalent area of these one thousand hectares in the rest of the country;
Foreigners may not own land containing or adjacent to “large and permanent bodies of water” (such as rivers, seas, lakes, etc.).

As a result of the repeal of these restrictions, foreigners are now able to acquire rural lands for any purpose. However, this possibility is limited by a provision from Decree 15,385/1944, which stipulates that foreigners wishing to acquire rural and/or urban properties within the Argentine border strip (150 km if the border runs over land, and 50 km if the border runs over the sea) must first obtain approval from the National Directorate for Technical Border Affairs (an authority currently under the Ministry of the Interior).

Reforms in the Energy Sector

The energy section of the Decree repeals a law on electricity transmission, specific provisions regarding the regulation of decentralized electricity generation from renewable energy sources, certain emergency Decrees related to the electricity sector, and a regulation on maximum terms in contracts for the supply of fuels to gas stations. Since these changes apply to specific circumstances, they do not fundamentally alter the energy sector. The most important aspect for this industry is likely the effective enforcement of legal regulations for hydrocarbons, natural gas, and electricity, as well as a specific incentive scheme for the production and export of hydrocarbons.

The Decree authorizes the Energy Secretariat to adjust the structure of existing subsidies for public gas and electricity supply companies under federal jurisdiction in accordance with the state of emergency declared for the national energy sector by Decree 22/2023 and the tariff revision established therein.

There are also a series of provisions that, while not falling under the energy sector, can still have significant impacts on the industry. These include, in particular, regulations on national procurement, repeal of the supply law, specific amendments to the Civil and Commercial Code and the Customs Code, labor regulations, and land regulations.

Changes to the Legal Framework for Air Transport

The new measures represent the most significant change in decades regarding the liberalization of the air transport market. The Decree repeals important regulations on air transport policy and introduces significant changes to the Aeronautical Code. The changes are justified by the assertion that Argentine air transport policy has hindered the development of the commercial aviation industry, which is a fundamental pillar for federal integration and the economic and tourist development of the country. The changes aim to increase competition in the market by relaxing many of the previously applicable restrictions.

The Decree repeals decree-Law 12,507/56 (national aviation policy), Law 19,030 (national policy for commercial air transport), and all essential regulations of the previous regulation.

Moreover, the Decree provides for the amendment of several provisions of the Aeronautical Code, which in many cases will be the subject of further implementing regulations to be issued in the future. The main changes to the Aeronautical Code include the following:

The new text of Article 2 qualifies commercial civil aviation as an essential service. In this context, it is important to note that, through a previous reform of the labor law provisions of Law 25,877, commercial aviation and air traffic control were qualified as essential services, guaranteeing a supply of no less than 75%, even in the event of collective bargaining disputes.
Furthermore, the Decree allows for the significant liberalization of domestic and international air transport. The aim is to promote access to the transport and operation of aircraft for general and commercial aviation by opening up the market to international companies. Additionally, the requirements for airport service providers are made more flexible. The aviation authority must regulate these according to the principles of safety, free competition, and market access (new Article 29a).
The requirements for owning an Argentine aircraft are also made more flexible; potential individuals and co-owners now only need to prove a “legal” Argentine domicile, not an “actual” one (new Article 48).
Regarding contracts for the use of aircraft, the parties may determine the content and form themselves; only contracts transferring the role of operator require written form and registration (new Article 68).
Article 95 provides that approval for the exercise of commercial air transport activities for foreign flag carriers is subject to international standards and agreements, and that the executive branch will strive to ensure compliance with the principles of reciprocity.
With regard to domestic air transport operations, Article 97 deletes the paragraph that restricted the ability of foreign airlines to transport passengers, cargo, or mail within Argentina.
Additionally, the requirements for establishing companies operating domestic air transport services are relaxed (new Article 99).
Air transport services are no longer subject to concession by the executive branch, only to approval. Approval includes permission to use different flight routes within Argentina and is unlimited in time. A concession merely granted permission to use certain flight routes for a limited period, and an extension of the concession had to be requested. The new wording also does not require a public hearing for the granting of the concession (new Article 102).
The granting of these approvals promotes healthy competition in accordance with the principles of market freedom (new Article 104).
The granting of approval for the operation of aircraft within Argentina by foreign companies through the executive branch is made more flexible. However, it must still be ensured, according to the reciprocity agreement and the agreement on double surveillance of operational safety, that these aircraft are manned, operated, and maintained by Argentine personnel (new Articles 107 and 113).
Under the new regulation, companies can freely set their tariffs (Article 109).
Inter-company agreements are subject to antitrust law and no longer require prior approval (new Article 110).
A new Article 128 is inserted, stating that the executive branch will develop and implement civil aviation policy promoting the growth of the sector based on principles of safety and trade freedom. This policy aims to enable free mutual access to air transport markets and support international as well as domestic connectivity between national and foreign operators.

To strengthen the autonomy of air transport law and achieve a proper balance between the interests of passengers and aviation companies, the Decree includes a new article providing that the aviation authority will issue regulations on the protection of passenger rights.

The new provisions also take into account the modernization of the aviation industry. Thus, the existence of unmanned aircraft and the possible regulation of aircraft controlled by artificial intelligence are considered. The digitization of aviation procedures and documents is also promoted.

Changes in Customs Procedures

The Decree includes a series of amendments to the Customs Code (Law No. 22,415), which aim to make the options available to economic operators more flexible when declaring goods and focus on the digitization of processes. Customs procedures are also to be simplified to allow for more efficient customs controls and clearances.

The following changes are particularly significant:

The inclusion of Article 120 bis in the Customs Code, which mandates the digitization of all processes and procedures carried out before the customs authorities, introduces digital signatures, and allows paper only in exceptional cases.
With new Article 120 per, more legal certainty is provided to economic operators. It requires the mandatory publication of all customs regulations and states that there must be a sufficient period between the publication of regulations and their entry into force.
Another change that provides security to foreign trade companies are the reforms regarding advance decisions on imports (Article 226) and exports (Article 323). An advance decision is to be qualified as a binding agreement between economic operators and the customs authority on the classification, origin, value, and all other elements necessary for the application of applicable customs and tax regulations.
In this context, the bond regime has also been made more flexible to expedite customs clearance. It has been stipulated that economic operators may provide guarantees and request clearance when facing tax issues and/or anticipating fines for alleged violations of customs regulations. Surrender of goods is thus no longer required. In case the customs refuses to provide such security, a new appeal procedure applies. Furthermore, the cases in which the system is applicable can be expanded by regulations.
The Decree allows importers to submit the customs declaration up to five days before the arrival of goods (Section 279) to expedite customs clearance.
Article 153 provides that the national executive must seek to join existing international agreements that imply innovation and less bureaucracy in administrative and control procedures in the customs area. The aim is to reduce costs and promote Argentina’s integration into the international market.

Further measures for economic deregulation in the customs area include allowing any natural or legal person to declare customs operations without needing to be registered in a special registry and without having to involve a customs officer for these operations. For this purpose, Article 37 of the Customs Code is amended. It stipulates that natural or legal persons may carry out customs clearance and determination of goods themselves or through an authorized person. Under the previous wording, natural persons had to have the goods declared with the involvement of a customs officer.

In this sense, Article 92 of the Customs Code has also been amended, stating that all natural and legal persons may apply for customs clearances and conduct foreign trade transactions without having to register in a registry. This change means the abolition of the Importers and Exporters Registry maintained by the General Customs Directorate.

III. Validity of the Decree and Possible Scenarios

The Decree became effective 8 days after its publication in the Official Gazette, on December 29, 2023. However, to remain valid, the Argentine Senate and the Chamber of Deputies must first adopt the Decree. Neither of the two legislative chambers can reject the text of the Decree, add new articles, or remove parts of the original text. The Decree is reviewed in its entirety and may be rejected or adopted by the parliament.

From a legal perspective, there are three possible scenarios:

If neither of the two parliamentary chambers rejects the Decree, it remains in force;
If only one of the parliamentary chambers approves it and the other rejects it, the Decree also remains in force;
If both parliamentary chambers reject it, the Decree is nullified.

Since the enactment of Law 26,122 in 2006, no DNUs have been rejected by both chambers of Congress.