Bill for a New Argentine Public Ethics Law

The Bill, which proposes a new public ethics regime (the “Bill”) was drafted taking into account a preliminary bill drafted by the Anticorruption Office (the “AO”), which had previously been subject to a public consultation procedure during the months of February and March, 2018 (the “AO Bill”). Based on the AO Bill, the Bill incorporates suggestions analyzed by the AO and preliminary recommendations made by the World Bank’s Organisation for Economic Co-operation and Development. For further information on the AO Bill, please see Marval News on the AO Bill.   

I. Regulated Matters

1. Scope of Application

Unlike the AO Bill, which adopted the definition of “public function” provided by the Public Ethics Law No. 25,188 (the “PEL”), the Bill adopts a broader definition which includes “any activity in service of state interests or public powers”, comprising activities performed by state entities or non-public state entities in which the Federal Government participates in their governing or control bodies.  

2. Principles

The Bill includes new principles —equal treatment, reasonability, legality, liability and austerity— other than the ones already included in the AO Bill —impartiality, integrity, preservation of the public interest, prudence, transparency, accountability— all of which are now vested with full effectiveness.

3. Nepotism

The Bill grants legislative hierarchy to the nepotism regime created by means of Decree No. 93/2018 —which regulates nepotism within the Public Administration— and provides certain limits regarding appointment and supervision of public officers.

The Bill prohibits the appointment of spouses, partners, or relatives up to the second degree collaterally within the same jurisdiction for public officers of lower hierarchies (up to Secretaries), and within the whole public administration with regards to public officers of higher hierarchy.

On the other hand, the Bill provides that any appointment carried out in violation of its provisions will be null and void, notwithstanding the validity of the acts carried by the appointed —and removed— officer , and the applicability of any other sanctions which may be imposed on public officers liable for the appointment made in breach of the regime.

The regime is not applicable to: (a) those public officer s which were already performing duties before the other public officer took its office; (b) those public officers which undertook their public functions through (i) a proceeding which assured their merit and suitability; or (ii) an electoral proceeding.  

With regards to the supervision regime, the Bill includes a prohibition under which a public officer must not directly supervise another public officer to whom he or she holds a relationship in the terms explained above. In such a case, one of the public officers must be transferred without affecting his or her hierarchy.

4. Assets and Interests Sworn Statements Regime

The Bill adds a declaration of interests to the already existing asset sworn statement regime, so that it shows public officers’ assets situation and their past and current connections with the purpose of preventing and detecting unjustified capital increases and conflicts of interest.

As a novelty, the Bill provides that the sworn statement must be filed by means of a single electronic form applicable to all public officers. In addition, the information presented by a public officer and their spouse or partner and minor children or incapable offspring, must be made public though digital media which enables its online consultation (any information which precisely identifies declared goods must not be published though). If a public officer fails to comply with this provision, he or she must be sanctioned, amongst others, with a suspension of up to 20% of their salary until he or she correctly files the missing sworn statement.

In addition, under the Bill new individuals are subject to this obligation: (i) principal candidates which participate in national elections or whose appointment depends of the intervention of any of the Argentine Congress’s Chambers; (ii) members of collegiate bodies that run and manage health insurance companies; and (ii) members of direction and management bodies of labor unions regulated by Law No. 23,551; and (iv) members of political parties which manage their funds.

5. Conflict of Interests

Under the Bill, a conflict of interests exists when “a public interest which corresponds to the exercise of an office coexists with a private interest, whether it be economic in nature or not”. It also clarifies that it exists as “an objective situation, configured independently of the officer’s intent to achieve a benefit”.

Under the Bill, the conflict of interests categorization originally proposed by the AO Bill —“current”, “potential” and “apparent”— was reduced to just two categories; (i) “real”, when the coexistence of interests is direct and current (i.e., for example, when a public officer  performs private activities over which he or she has certain public powers as a result of his position, or when a public officer has an interest or participation in a contractor of the agency where he or she performs his or her public duties); and (ii) “potential”, when the coexistence of interests is circumstantial considering that it could eventually occur or not —such as, for example, when the public officer has to intervene in cases related to persons to which he had already provided goods or services, or companies in which he has participation or interest.    

6. Limitations after cessation of public function

The Bill imposes public officers with certain limitations after they have ceased in their public duties, such as to refrain from using information obtained while in office, and to refrain from (i) representing, sponsoring or performing any administrative management in favor of third parties before the entity or agency where he or she performed his or her public duties; and (ii) personally or through third parties, directly or indirectly providing goods, services or works to the entity or agency where he or she performed his or her public duties.

7. Regime of gifts to public officers

With regards to the regime of gifts to public officers, the Bill adopts the general terms of Decree No. 1179/2016 and other issues are addressed such as the extension of these regulations over gifts received by spouses, partners and minor child of certain public officers.  

II. Final comments

The Bill complements a series of legislative and regulatory amendments aimed at reinforcing transparency within public office —amongst others, the Corporate Criminal Liability Law and Access to Public Information Law. For further information, please see these Marval News articles: Corporate Criminal Liability Law Marval News and Access to Public Information Marval News.

Similarly to the AO Bill, the Bill updates the provisions of the PEL considering the technology improvements with the purpose of enhancing the tools which help to shed light on the exercise of public functions, and preventing ethic infringements which may lead to corruption acts. In addition, it specifies the measures to be taken to avoid infringements to its provisions and the applicable sanctions in case such infringements are committed, providing the regime of more effectiveness.

Although there are certain matters to be improved, such as a clearer definition of the legal status of the regulations which may juxtapose with the Bill —whether they are complementary to, or abrogated or superseded by the Bill— or the fact that no regulations on lobbying were included, the Bill as a whole updates the framework which regulates ethics within the exercise of public function.

Some matters will certainly require further regulation, particularly with the specific regulations of each one of the State Powers; but in general, the Bill promises to provide greater transparency, control and certainty on public officers’ ethical behavior when performing their duties.