Relevant aspects of the "Ley de Bases y puntos de partida para la libertad de los argentinos"

In November 2023, a paradigm shift took place in the Argentine Republic. In the runoff election held on the 19th of that month to elect a president for the next 4 years, the self-proclaimed anarcho-capitalist economist Javier Gerardo Milei emerged victorious with 56% of the votes. This result meant that the majority of society demanded a change, a shift from the prevailing model to one that proposed, among other campaign promises, greater freedom. And the changes were not long in coming. 

After the questioned mega Executiva Order 70/23 and an exhausting bargaining, the Ley Bases[1] was finally issued on 6/27/2024, and published under number 27.742.

The Ley Bases introduces major changes in various legal areas, both directly and indirectly.

After declaring a one-year state of emergency in administrative, economic, financial, and energy matters, the Law proposes the following measures to address these issues:

• An administrative reform of the State (Title II);
• Changes in public infrastrcture projects and concessions (Title III);
• Modifications to labor regulations (Titles IV and V); and
• Changes in energy policies (Title VI).

It is important to note that modifications related to tax amnesty, the tax debt regularization regime (including tax, social security, and customs obligations), the Personal Property Tax, Income Tax, and the Investment Incentive Regime for Large Investments (RIGI) were addressed in a Special Tax Alert issued by BDO Argentina’s Tax Department.
 
I.- STATE REFORM
The State Reform includes different aspects:

• The administrative reorganization of the State (Chapter I);
• The privatization of companies and entities wholly or majority-owned by the National Government (Chapter II);
• The reform of Administrative Procedure Law No. 19.549 (Chapter III); and
• The reform of the National Public Employment Regulatory Framework Law No. 25.164 (Chapter IV).

ADMINISTRATIVE REORGANIZATION

The legislative delegations established in Chapter I of Title II of the Act aim to:

a) Improve State´s performance to achieve transparent, agile, efficient, effective, and high-quality public administration for the common good;

b) Reduce the oversized governmental structure to reduce the deficit, ensure spending transparency, and balance public accounts; and

c) Guarantee effective National Public Administration´s internal control to ensure transparency in public financial management.

Upon the law’s issuing, the Federal Executive Branch - concerning the central or decentralized administrative bodies – is entitled to:

• To modify or eliminate legally established competencies, functions, or responsibilities deemed unnecessary; and
• To reorganize, modify, or transform their legal structure, centralize, merge, split, fully or partially dissolve, or transfer them to the provinces or the City of Buenos Aires, subject to prior agreement ensuring proper resource allocation.

However, the law explicitly excludes:

• National universities;
• Other powers of the State; and
• Other Government organizations.

Regarding State-owned or majority-State-owned companies, the Executive Branch is also authorized to privatize themand to:

• Modify or transform their legal structure[2]; and
• Merge, split, reorganize, reconfigure, or transfer them to the provinces or the Autonomous City of Buenos Aires, ensuring proper resource allocation.

Additionally, the Executive Branch may:

• Modify, transform, unify, dissolve, or liquidate public trust funds following the rules set forth in the Ley Bases (Article 5); and
• Intervene in decentralized agencies, companies, and corporations mentioned in Article 8 of Law No. 24.156, except for those explicitly excluded by the Bases Law (Article 6).

PRIVATIZATIONS

Chapter II of Title II establishes that state-owned companies and entities are "subject to privatization" under the terms and effects of Chapters II and III of Law N° 23.696. The Law also outlines the mechanism for executing these privatizations.

The entities listed in Annex I are:

Privatization:

• ENERGÍA ARGENTINA S.A.
• INTERCARGO S.A.U[3].

Privatization/Concession:

• AGUA Y SANEAMIENTOS ARGENTINOS S.A.
• BELGRANO CARGAS Y LOGÍSTICA S.A.
• SOCIEDAD OPERADORA FERROVIARIA S.E. (SOFSE)
• CORREDORES VIALES S.A.

Additionally, specific considerations are established for:

• Nucleoeléctrica Argentina Sociedad Anónima (NASA)
• The Carbon, Railway, Port, and Energy Complex operated by Yacimientos Carboníferos Río Turbio (YCRT).

ADMINISTRATIVE PROCEDURE

Chapter III of Title II amends the Administrative Procedures Law (Law No. 19.549), which governs the actions of the National Public Administration and its interactions with citizens.
The amendments:

• Modify deadlines for filing administrative appeals and judicial actions;
• Eliminate the prior payment requirement for fines; and
• Introduce the concept of "positive silence" for certain authorizations[4].

PUBLIC EMPLOYMENT

Chapter IV of Title II modifies the regulatory framework for National Public Employment, establishing availability and dismissal provisions for public employees affected by restructuring measures that eliminate entities, organizations, or their functions, or reduce excess staffing.
 
II.- PUBLIC INFRASTRUCTURE PROJECTS AND CONCESSIONS

Regarding public infrastructure projects and concessions, the Ley Bases:

• Authorizes the Executive Branch to renegotiate or terminate public infrastructure project contracts due to force majeure (Chapter I);
• Allows the Executive Branch to settle disputes (Chapter I);
• Amends the Public Infrastructure Projects & Concessions Law No. 17.520 (Chapter II).

1. Promoting registered employment
2. Modernizing labor legislation

• Amendments to the Employment Law No. 24.013 regarding registration requirements;
• Amendments to the Labor Contract Law No. 20.744, extending trial periods (up to six months or more), allowing alternative dismissal compensation schemes, and defining workplace blockades, facility takeovers, and sabotage as serious misconduct;
• Amendments to the Agrarian Labor Contract Law No. 26.727;
• Supression of fines and increased severance payments under various Labor laws.

• Modifications to the Hydrocarbons Law No. 17.319 to promote liberalization and international trade;
• Authorization for natural gas transport and export under the Natural Gas Regulatory Framework Law No. 24.076;
• Adjustments to the YPF Nationalization Law No. 26.741;
• The creation of the National Gas and Electricity Regulatory Entity, which will replace the current ENRE and ENARGAS.