The End of the Emergency

Upon a serious political and economic crisis, in January, 2002 the Argentine Congress passed Law No. 25,561 (the “Emergency Law”), which declared the emergency in social (the “Social Emergency”), economic, administrative, financial, exchange policy, contracts ruled by public law, occupational, alimentary and sanitary matters.

The Emergency Law, with some amendments, was successively renewed since its original enactment.  Its last renewal was passed in 2015, through Law No. 27,200, lasting until December 31, 2017.

At the end of last year, the Federal Congress decided only to extend the term of the Social Emergency until December 31, 2019, through the sanction of Law N. 27,345, thus ending the broad emergency that lasted until December 2017.

The declaration of the Emergency had caused an ample delegation of legislative faculties in the National Executive Power (the “PEN”).

The Emergency Law allowed the PEN to establish the system that fixed the exchange rate between the Argentine peso and foreign currencies, to issue exchange regulations, to restructure obligations affected by the modifications to the exchange rate, to temporarily regulate the prices of critical products, goods and services in case of prospective market distortions or monopolistic or oligopolistic policies, etc.

The main consequence of the expiring of the broad declaration of emergency is the Congress’ retrieval of a series of powers that had been delegated to the PEN during the effectiveness of such declaration of emergency.

Notwithstanding the ending of the broad declaration of emergency implies per se is a clear step forward for the effectiveness of the rule of law, it will be important to follow this new stage closely, especially the behavior of the PEN after the Congress’ retrieval –since January 1, 2018- of the delegated faculties.