Page 17 - MONTT LATIN AMERICAN MAGAZINE, MARCH, 2018, ENGLISH

The approval by the Senate of the “Buy Argentine” Law is expected by next April. It already received, at the end of last year, the backing of the Chamber of Deputies and seeks to benefit the small and medium companies of the country.
The Government invests five percent of the Gross Domestic Product in the acquisitions of products and services of these entities, an important amount, which will increase in 2018. Among the most interesting aspects of this disposition are:
• The margin of difference in favour of small and medium companies rises to 15 percent over the values of other offers in the State’s purchasing processes. For large organization, it will be five to seven percent.
• If a foreign company wins a tender, it must subcontract domestic companies to cover 20 percent of the value of that work.
• Penalties for non-compliance will range from a warning to fines of between five and 50 percent of the contract amount. The penalty can be reduced by up to half if the sanctioned company rectifies its lack immediately.
• A product of national origin will be produced “in the territory of the Argentine Republic, provided that the cost of imported raw materials, inputs or imported materials does not exceed 40 percent of its gross value of production”.
•Creation of a Bicameral Commission to Follow-up Public- Private Participation Contracts to verify compliance with the obligations and requirements of the law, in particular for the effective participation of national production. The text, agreed by Cambiemos,
the Justicialista bloc and the Frente Renovador was modified to expand the margins in favour of Small and Medium companies (from 12 percent of the original project, to 15 percent); change the strip for large companies (from five to seven percent against the original proposal, from five to eight percent), and incorporate other key companies that participate in government purchases, such as the YPF oil company, in the scheme to subcontract national companies at 20 percent of the value of the work. Government authorities argued that in the next eight years, the public sector will invest 200 billion dollars in infrastructure, energy and mining, among others. If an integration of national products of 40 percent is achieved in the large projects that the State will carry out, 70,000 new highly qualified jobs could be generated, thanks to the this legal body.
Antitrust Law
On the other hand, it is expected that in the next weeks, the Senate will approve another priority initiative for the government of President Mauricio Macri: the Antitrust Law, which creates a National Authority to combat situations of abuse of dominant position of the market. This provision establishes new regulations to avoid distortions on competition, such as the formation of monopolies, oligopolies and cartelization.
The new authority that will create the law will be decentralized and autonomous from the Executive power and will be in charge of the
implementation of fines to natural or legal persons that engage in unfair economic concentration. This body will be integrated by the Competition Defense Tribunal and two secretaries: the head of the Secretariat for the Instruction of Anticompetitive Behaviors and the head of the Secretary of Economic Concentrations.
It is proposed that the members of the enforcement authority be appointed by the Executive Branch (with the consent of the Senate), after a public examination. Among the economic sanctions, heavy fines are foreseen (those that are current were out of date, since the current legislation dates from 1999) of up to 100 million Mobile Units Adjustable by the Consumer Price Index (CPI) .
Clemency Program
The project includes a “Clemency Program” with benefits of exemption or reduction of administrative and civil penalties for the companies that adhere, “insofar as they provide evidence to sanction the members of the cartel”.
In the meantime, a control of the mergers and acquisitions of companies is available, requiring prior notification to the enforcement authority.
On the other hand, a specialized competence room is created within the Civil and Commercial Chamber, with the possibility that the decisions of the application authority are “appealable”.
Montt Latin American Magazine p17