A recent National Commercial Court decision has set a favourable precedent for the aviation industry in Argentina. The court ordered the application of international conventions rather than local law and federal jurisdiction instead of commercial national jurisdiction. This application of international conventions by the Argentine courts is important, as it establishes the limited liability that is generally overlooked by domestic legislation.
A passenger filed a claim against Iberia Lineas Aereas de Espana SA for a breach of contract after her non-stop flight to Europe was modified due to overbooking. The claimant argued that the defendant had fraudulently failed to fulfil its obligations. The Civil and Commercial Court of Appeals rejected the punitive damages awarded by the first-instance court, but increased and maintained compensation for moral and material damages, respectively.
Under Resolution 706-E/2017, airlines must inform the Argentine National Civil Administration (ANAC) of how they will reimburse the discrepancy in airport fees paid by passengers who bought tickets in 2016 and travelled on or after January 1 2017, when a fee reduction was introduced. Most of the affected airlines have now proposed ways to comply with the resolution, which should avoid summary proceedings by ANAC for non-compliance.
Two Argentine consumer associations recently filed a collective action against the majority of airlines operating in Argentina in defence of passenger rights. The claimants alleged that the carriers should reimburse the difference between the airport fee paid by passengers in 2016 when their tickets were issued for flights in 2017 and the new airport fee, which was reduced from January 1 2017.
Following the issuance of Resolution 445/16 by the Civil Aviation Authority (ANAC), the National Directorate of Air Transport was tasked with establishing a system to evaluate airlines' compliance with their flight schedules. The aim is to increase air transportation efficiency for passengers and provide the ANAC with additional tools to evaluate the performance of scheduled carriers.
Since the Macri administration took office in December 2015, several resolutions have been passed to encourage and simplify foreign investments in Argentina. Two recent Central Bank regulations relate to the relaxation of additional foreign exchange restrictions and a new bank account regime which makes it easier for foreign financial institutions to invest in Argentina.
In 2016 there were several regulatory developments regarding the use of technology in the financial sector. The Central Bank of Argentina issued regulations aiming to integrate technological innovations in the financial sector to promote greater formalisation of the economy, increase access to banking services and facilitate access to and use of digital tools. These regulations highlight the Central Bank's intention to promote the use of new technologies for legal and financial transactions.
Since December 2015, a series of measures have been implemented to deregulate and implement progressively more flexible regulations regarding foreign exchange controls. Among other things, the changes relate to the acquisition of foreign currency, financial indebtedness and the repatriation of direct and portfolio investments by non-Argentine residents.
One of the major changes introduced by the amended General Companies Law is the possibility of setting up corporations formed by a single shareholder. While the introduction of single-shareholder corporations is a step in the right direction, the restrictions and requisites imposed therein evidence that this new type of organisation does not meet the expectations of the legal and business communities.
In its continued effort to promote the revival of the Argentine economy, the government recently submitted a bill to Congress to create a new type of simplified corporation. At present, in order to undertake a business venture in Argentina – no matter how small – an entrepreneur must set up a traditional company, which will be subject to the same rules and taxes applicable to well-established big businesses.
Argentina is one of Latin America's most innovative tech hubs and home to several pan-regional unicorn start-ups. However, until now, it lacked an adequate legal framework to fund start-ups through venture capital, crowdfunding platforms or seed capital. In order to boost local financing of new projects, Congress recently approved the long-awaited Entrepreneurship Law, which is set to change the start-up environment.
Argentina is slowly leaving behind a decade of over-regulation. As the country endeavours to make the transition from over-regulation to a private investment-friendly environment, expectations in the M&A sector are high. If the high-inflation and low-growth transition is overcome in the next few months, Argentina should regain significant attractiveness in the region and appeal to local and foreign investment.
The government is proposing an ambitious tax amnesty law which would allow taxpayers to disclose undeclared assets and extinguish any tax obligation relating to such assets by paying a penalty. The government proposal gives taxpayers the option to use the disclosed assets to subscribe to a three-year zero coupon bond and a seven-year 1% per year coupon bond.