Thresholds and Fines are Updated under Argentina’s Antitrust Law

Via Resolution No. 151/2021 issued by the Secretariat of Domestic Trade (the “Resolution”), published in the Official Gazette on February 22, 2021, the value of the Adjustable Unit set out by Article 85 of Antitrust Law No. 27,442 (the “Antitrust Law”) has been fixed at fifty five pesos and twenty nine cents (ARS 55.29).

Based on the new value of the Adjustable Unit, the amounts set out in the Antitrust Law are automatically increased as follows:

Merger Control Threshold: Economic concentrations in which the aggregate volume of business generated in Argentina by the involved companies (acquiring group and target or merging entities) in a transaction exceeds 100,000,000 Adjustable Units, equivalent to ARS 5,529,000,000 (USD 61,949.579 based on the relevant exchange rate), will require the approval of the National Competition Authority.

(A) If the company’s turnover is generated in Argentina by means of a local subsidiary, we recommend referring to the local financial statements which are issued in local currency, thus avoiding any distortion regarding exchange rates.

(B) If the company exports to Argentina (and, thus, has no local financial representation here), the Antitrust Law sets out that the exchange rate to be used must be the sellers’ exchange rate published by the Banco de la Nación Argentina for the day corresponding to the end of the preceding fiscal year. For the fiscal year ended on December 31, 2020, the relevant exchange rate was USD 1 = ARS 89.25 (Source: Banco de la Nación Argentina).

The “de minimis” threshold: If a notification is triggered, the “de minimis” exemption could apply if neither the total local assets of the target company or the local amount of the transaction exceed 20,000,000 Adjustable Units, equivalent to ARS 1,105,800,000 (USD 11,701,587 based on the current exchange rate). This exemption would not apply, however, if any of the companies were involved in economic concentrations above these figures in the same relevant market in the last 12 months or 60,000,000 Adjustable Units, equivalent to ARS 3,317,400,000 (USD 35,104,761 based on the current exchange rate) in the last 36 months.

(A) In this case, for the calculation of the assets, we also recommend referring to the local financial statements that are issued in local currency, thus avoiding any distortion regarding exchange rates.

(B) For the calculation of the value of the transaction, the exchange rate available at the time of the closing should be taken into account.

Late Filing Fine: When the other methods of calculation established in the Antitrust Law are not viable, the responsible parties that did not comply with the mandatory notification will be subject to a fine of up to 750,000 Adjustable Units per day of delay, equivalent to ARS 41,467,500 (USD 438,809 based on the current exchange rate).

Fines for anticompetitive conducts: When the other methods of calculation established in the Antitrust Law are not viable, the parties that have carried out anticompetitive conducts will be subject to a fine of up to 200,000,000 Adjustable Units, equivalent to ARS 11,058,000,000 (USD 117,015,873 based on the current exchange rate).

The value set out by this Resolution will be effective as of February 23, 2021 and will remain in force until the value for the year 2022 has been published by the Secretary of Domestic Trade or the National Competition Authority.

The Resolution does not provide for any other change with respect to merger control proceedings. As such, the current non-suspensory regime continues to apply, by means of which the parties to a transaction are able to close and carry out the notification either before or up to one week after the closing.

However, important developments towards the implementation of a suspensory regime have been seen in the first part of 2021.

On November 17, 2020, a new bill for the amendment of the Antitrust Law was submitted to the Argentine Congress. The bill includes a series of relevant changes pertaining to the National Competition Authority as well as to merger oversight and anticompetitive conducts regimes. One of the key amendments proposed by the bill is the entry into force of the suspensory regime for the notification of economic concentrations 90 days after its publication in the Official Gazette. The bill was discussed and approved by the Senate on February 4, 2021 and has now been passed to the House of Representatives.