Trade Regulations and Antitrust Legislation

SYNOPSIS

 A. GENERAL RULES

1. Constitutional Provisions 20.101
2. Antitrust Legislation (Law No 22262) 20.111
3. Consumers´ Rights (Laws No 22802 and 24240) 20.121

A. GENERAL RULES

1. Constitutional Provisions

20.101 The Argentine Constitution has many provisions related to the matters treated in this chapter.

20.102 According to a numerical order, the first provision to be mentioned is that of article 10 that establishes free circulation within the Argentine Republic of national manufactured goods, as well as of goods dispatched from customs.

20.103 Article 14 enumerates the rights of the inhabitants of the Nation, among those the following are related the matters treated herein:

- right to work and exercise every lawful industry,

- to navigate and trade,

- to use and dispose of property and

- to associate for useful purposes.

20.104 Article 17 deals with the guaranty concerning the respect for private property. It states that "private property is inviolable and that no one can be deprived of it, except in case of judicial sentence based on approved legislation". Expropriation can only take place by reasons of public utility, dully qualified by law and with a previous indemnification.

20.105 The Constitution considers foreigners as equals to citizens. Foreigners are guaranteed the exercise of their industry, trade and profession; to own real estate, to buy and sell it and to navigate the rivers and coasts.

20.106 Article 42 establishes free competence protection against any manner of market distortion and monopoly control.

20.107 The Constitution vests Congress with the power to issue the Civil, Commerce, Penal, Mining and Labor and Social Security Codes. These laws, together with their complementary rules, will regulate the economic activity.

20.108 The Congress is also empowered to issue legislation on:

- bankruptcy;

- international and interprovincial commerce;

- mail service;

- industrial promotion.

20.109 Congress also approves or rejects treaties that the Executive Power has signed with other countries and with international organizations. Treaties constitutionally have a higher rank than laws.

20.110 The President can issue decrees of necessity and urgency only when exceptional circumstances impede compliance with the ordinary proceeding provided by the Constitution for the sanction of laws, except for tax matters that should be decided be decided through a general agreement of ministers that must sign them together with the Chief of Cabinet. Such decrees will be submitted to the consideration by the Permanent Bicameral Commission of the Congress that should treat them immediately.

2. Antitrust Legislation (Law No 22262)

20.111 Free competence and its protection against possible abuses or distortions is of vital importance regarding regulation of economic activities.

20.112 The Constitution expresses this idea by establishing in article 42, that "the authorities will provide for competence protection against any manner of market distortion, and the control of natural or legal monopolies.

20.113 Furthermore prior to the Constitutional amendment that included the provision transcribed in the previous paragraph, law 22262 was enacted to avoid such conducts.

20.114 This law forbids and punishes "acts or behaviors regarding transactions with goods or services that limit, restrain or distort competence or that imply abuse of a dominant position in the market, in such a way that it may result in a prejudice for the general economic interest".

20.115 Anyone injured by an anticompetitive act has a civil action for compensation, and the law also provides for an administrative procedure to penalize infractions.

20.116 For purposes of the enforcement of the law, the Federal Commission of Competence Protection is created, its composition and the requirements of its members is established.

20.117 The Commission’s powers can be exercised independently of the place within the country where the acts were done. The Commission has wide inspection powers, it can studies, require information from the authorities, summon those responsible, request witnesses testimony, ordain examinations, require reports, hold hearings, request the competent court order legal attachment on assets and impede that those presumably involved leave the country.

20.118 The Commission will keep a register of penalties, with the data of those responsible.

20.119 The acts and behaviors that can be considered as restraints or distortions of competence are:

a) To directly or indirectly fix, determine or vary through concerted actions, prices in a market.

b) Through concerted actions limit or control technical development or investments in the production of goods or services, as well as their production, distribution or marketing.

c) To establish, through concerted actions, the sale and marketing conditions, minimum quantities, discounts and other sale and marketing aspects.

d) To condition an agreement or the provision of supplementary operations that, due to their nature and according to commercial practice, have no relation with the purpose of such agreements.

e) To enter into agreements or undertake concerted actions, apportioning or accepting zones, markets, customers or supply sources, between competitors.

f) To impede or hinder, through concerted agreements or actions, one or more competitors access to the market.

g) To refuse, on occasion of a concerted action and without motive based on commercial practice, to satisfy concrete demands for the purchase and sale of goods or services, effected in current market conditions.

h) To impose, through concerted actions, discriminatory conditions for the purchase and sale of goods or services without any reason based on commercial practices.

i) To destroy, on occasion of a concerted action, products in any stage of elaboration or production, or the means to extract, produce or transport them.

j) To abandon harvests, cultivations, plantations or agricultural or cattle products, or to stop or hinder the functioning of industrial establishments or a mineral exploration and exploitation, on occasion of a concerted action.

k) To communicate to competing companies, on occasion of a concerted action, the prices or other purchase, sale or marketing conditions subject to which such companies should operate.

20.120 Penalties for such infringements may be fines and/or imprisonment from one to six years.

3. Consumers´ Rights (Laws No 22802 and 24240)

20.121 On September 22, 1993 Congress passed Law 24240, Consumer Protection Law and in 1994 the Constitution was amended, introducing in article 42 the rights of consumers and users of goods and services.

20.122 The Constitution establishes that consumers and users of goods and services have the right regarding this consumption to the protection of their health, security and economic interests, to a reasonable and truthful information to a free election and to equitable and dignified treatment.

20.123 It also establishes that government authorities must provide protection for these rights education for consumers, consumer right protection against market distortion, control of natural or legal monopolies, quality and efficiency in public services and the establishment of consumer and user associations.

20.124 With regards to public services the Constitution establishes that legislation should establish efficient proceeding to prevent and solve conflicts and that within the regulatory frame work the necessary participation of consumers and users associations, and the interested provinces in the controlling agencies should be considered.

20.125 With the sanction of Law 24240, consumers’ rights were unified in it different specific situations are considered as, for example, products or services that create risk, provisions relating to offers, effects of publicity, used, reconditioned or deficient goods, content of sale documents, guaranties and regulations for rendering services, provisions regarding public services, domiciliary or mail sales, credit sales and master agreements.

Interpretative principle

20.126 The law establishes an interpretative principle according to which any doubt in its interpretation must be decided in favor of the consumer.

20.127 The provisions of this law are applied with the different general and special rules applicable to the supplier-consumer legal relation, and specifically with the Fair Trade Law (22802) and the Competence Protection Law (22262).

20.128 The law establishes that its enforcement authority will be the Secretary of Industry and Commerce, that delegated this duty to the Federal Agency of Internal Trade, and that the Provinces and the Government of Buenos Aires City will be the local authorities in this matter and can delegate this duty to the municipalities within their jurisdiction.

20.129 The proceeding for conflicts solution consists basically in conciliation as a primary measure and if the parties reach to an agreement it is legally enforceable.

20.130 There are provision regarding administrative procedures and different penalties for suppliers that infringe the provisions of the law and do not reach an agreement in the conciliation hearing. Penalties are attention calls, fines, attachment of goods or products object of the infringement, closure of manufacturing establishments, suspension in the state suppliers register and the loss of concessions, privileges, special tax or credit regimes that the infringer might enjoy.

20.131 Malicious accusation in this proceeding is also sanctioned with fines.

20.132 The ruling establishes the requirements that consumer association must fulfill to act and invest the representation that the law and the Constitution grants them. In order to guarantee compliance with such requirement, a Register of Associations was organized where registration is mandatory.

Fair Trade

20.133 Law 24240 is complemented regarding consumer protection by the Antitrust Legislation and by the Fair Trade Law.

20.134 This latter law, Nº 22802 in its first chapter deals with goods identification. There it regulates the data that should be included in cases, coverings or labels of goods and products traded within the country, whether manufactured in same or not.

20.135 The second chapter refers to origin denominations defining this as the geographical name of a country, a region or a certain place, that designates a local product with characteristic qualities exclusively and essentially due to that geographical environment.

20.136 A third chapter regulates untruthful publicity and promotion through prizes.

20.137 The principle regulating promotion through prizes is to forbid all promotions that make it mandatory to purchase a product or contract a service in order to take part in a lottery or receive a prize.

20.138 The law establishes that the enforcement authority will be the Secretary of Industry and Commerce that delegated this to the National Agency of Internal Trade. It also states its powers and competence, the infringements and sanctions and the appeals that can be filed.