Congress: The Ruling Party Pushes Reforms on Trade Regulation

Lawmakers for the ruling Victory Front (Frente para la Victoria) continue to add initiatives to tighten the rules governing trade.
On March11, Representative Juan Cabandié introduced a bill (the “Bill”) which provides for significant amendments to the Fair Trade Act No. 22,802 (Ley de Lealtad Comercial, the “LLC”).
The Bill is in addition to the initiatives already submitted before Congress, respectively, in January by Senator Aníbal Fernandez, which seeks to amend Section 45 of the Consumer Protection Act No. 24,240 (Ley de Defensa del Consumidor, the “LDC”), and in February by Representative Héctor Recalde, which aims to introduce major reforms to the LLC, the LDC and Supply Act No. 20,680 (Ley de Abastecimiento, the “Supply Act”), as was discussed in issue # 136 of Marval News.

1. Main Amendments Provided For in the Bill
The Bill:
(i) Empowers the enforcement authority of the LLC to close establishments provisionally, for a term of forty-eight hours, in order to cease conduct in violation of the rules of the LLC, or to secure evidence for verification of the infringement.
(ii) Introduces sanctions which are ancillary to the penalties already provided for in the LLC. In that sense, the Bill established the following sanctions (i) closing down an establishment for a term of ten days and (ii) confiscation of infringing goods (which, until now, was only applicable to cases of repeated infringement). It is also added that the aforementioned list of sanctions "is not exhaustive".
(iii) Broadens the scope of the concept of "repeated infringement" (while previously, the concept required two or more violations of the same kind, the concept now extends to include any two or more violations to the LLC, regardless of their kind) and reinforced penalties for repeat offenders.

2. Grounds and Objectives of the Bill
As grounds for the proposed amendments, the Bill cites the need to put greater emphasis on the control of commercial corporations. It claims that the current punitive system fails to deter companies from committing further infringements, and thus requires reinforcement of the penalties.
As described in the Bill, its objective is "to improve fair trade and the conduct of companies with respect to users and consumers".

3. Preliminary Comments
The Bill is part of a series of legislative initiatives put forward in recent months by lawmakers for the ruling coalition in order to reform the current legislation on trade regulation.
In light of the momentum that the Executive Branch has recently given to these initiatives, it is likely that the relevant congressional committees will start working on these bills in the coming weeks.
It will be important to follow the legislative process carefully and, if these initiatives are passed, analyze the approved texts, in order to determine the rights that may be affected and the legal remedies available, since several of the projected amendments may be challenged on constitutional grounds.