Prohibition from Disconnecting Certain Users for Lack of Payment

Pursuant to Executive Decree No. 311/2020 (“DNU 311”) the Argentine Executive (the “PEN” after its acronym in Spanish) prohibited companies that provide electricity, natural gas, water, phone (landline and mobile), internet, and cable TV services from disconnecting certain users for lack of payment of up to 3 bills (consecutive or alternate), due as from March 1.

The prohibition from disconnecting users has a 180-day term as from its publication (March 25) and, with respect to residential users, is limited, among others, to (i) beneficiaries of the state benefits Asignación Universal por Hijo (AUH) or Asignación por Embarazo; (ii) beneficiaries of non-contributory pensions with a monthly gross income of up to 2 minimum wages (Salario Mímino Vital y Móvil); (iii) users within the Social Simplified Tax Regime for Small Taxpayers (Régimen de Monotributo Social); and (iv) retirees, pensioners and employees with a monthly gross income of up to 2 minimum wages; etc.

With respect to non-residential users, the prohibition from disconnecting includes: (i) Micro, Small and Medium-Sized Enterprises (MiPyMES, after its acronym in Spanish); (ii) work cooperatives and restructured companies; (iii) health institutions; and (iv) welfare non-profit organizations (entidades de bien público) that contribute to the production and distribution of food during the sanitary emergency.

DNU 311 also establishes that service providers must grant installment plans to their users so they may cancel the debts accrued during the 180-day term.

The prohibition established by DNU 311 is applicable to the service providers subject to the jurisdiction of the PEN, but DNU 311 invites the Provinces and the City of Buenos of Aires to adhere to this regulation.

Notwithstanding the ongoing sanitary emergency, taking into consideration the broad scope of DNU 311 and the difficulties related to its enforcement, it is important that the PEN implements the provisions of DNU 311 to guarantee the continuity and sustainability of the services included within the prohibition.