On December 21, 2023, President Javier Milei released Emergency Decree No. 70/2023 (the “Decree 70”), which establishes the “Foundations for the Reconstruction of Argentina’s Economy”. Decree 70 has entered into force on December 29.
While emergency decrees are constitutionally required to go through Congress, they are binding until they’re overturned.
Decree 70 states that the Argentine Republic is undergoing a situation of unprecedented hardship, generating deep imbalances with a negative impact on the entire population and, especially, on social and economic aspects.
One of the most relevant measures adopted by Decree 70 was the abrogation of state-owned act (Law No. 20,705), and an amendment to companies Law No. 19,550.
In that respect, Decree 70 orders the transformation of wholly or partially state-owned companies into private entities (even in cases where they are wholly state-owned enterprises (SOE)). These new entities shall be ruled by Law No. 19,550.
A maximum transition period of one hundred and eighty (180) days is provided to proceed with the transformation and registration of the transformed companies in the corresponding Public Registries.
In addition, Decree 70:
- Revokes Decree-Law No. 15,349/1946 and Law No. 13,653, that provided a separate regime for wholly-owned SOE, allowing the State to enter into industrial or commercial activities or operate public utilities trough such SOE;
- Partially abrogates Law No. 18,875, that foresaw a specific regime for purchases made by the National State; and
- Amends Law No. 23,696, on matters related to employees’ share participation program on SOE.
For additional information, please contact Nicolás Eliaschev, Javier Constanzó, Pablo Arrascaeta, Daiana Perrone, Rocío Valdez, and/or Victoria Barrueco.