Buy Argentine: Amendments to the Regulation of Productive Cooperation Agreements

The Executive Branch published Decree 509/2023 in the Official Gazette on October 6, 2023, introducing amendments to the “Buy Argentine and Supplier Development Program” Law No. 27437 and to Decree 800/2018—which regulates this law—regarding the requirements for Productive Cooperation Agreements (ACP). The Decree became effective the day after it was published.

According to the Buy Argentine Law, when entities subject to the framework acquire, rent, or lease goods not produced in Argentina for a value greater than a certain amount, successful bidders must enter into an ACP for a percentage of at least 20% of the total value of the offer. This percentage must be expressly included in the contract’s bidding terms and conditions.

Following the Decree’s recitals, the amendments aim to improve the fulfilment of ACPs and enhance their impact on the Argentinian industry, thus promoting the participation of bidders with local capabilities, investments, technology transfers, and encouraging micro, small and medium-sized Argentine companies to participate in global value chains. Accordingly, the Decree aims to guarantee greater concurrence of bidders in the contracting processes with the Government and give these bidders equal standing.

The Decree broadens the content of ACPs: it states that bidders can enter into local procurement under ACPs as companies producing local goods and/or providing local services. In all cases, bidders must acquire, contract, produce, or provide local goods and/or local services related to the object of the procurement process. The Decree explains that, as this was not established in the previous regulation, local bidders—as producers of local goods or providers of local services—were in disadvantage regarding bidders who could contract local goods or services from third parties to comply with their ACP obligations.

On the other hand, the Decree states that if it is not possible to reach the percentage of ACPs through contracting, provision, and/or production of local goods or services, the enforcement authority may authorize such percentage to be completed with investments, technological transfers, research, and technical training linked not only to the fulfilment of the contract’s scope (as the previous decree established) but also linked to the contract’s same productive sector and/or value chain.

It is reasonable to expect the enforcement authority to adopt specific regulations or interpretations.