Congress Rejects Merchant Navy Regime Reform

On August 21, 2025, Argentina’s Senate rejected Emergency Decree 340/2025, issued by the Executive Branch in May of this year, which introduced significant reforms in the federal cabotage legal framework (see our comments in “New Merchant Navy Regime”). The House of Deputies had done the same on August 6, 2025. Both rejections were published in the Official Gazette on August 25, 2025 (Resolutions 39 and 57).

Under Law 26122, which regulates the legislative process and the scope of Congress's intervention regarding emergency decrees issued by the Executive Branch, the rejection of the Decree by both Houses of Congress implies its repeal.

The Decree had been based on a declared emergency in the sector, with the stated objectives of contributing to the progressive development of the Argentine Merchant Navy, promoting competition between domestic and international operators, and aligning local regulations with international best practices.

Among its central provisions, the Decree created a Special Regime for the Argentine Merchant Navy, allowing shipowners to request the provisional suspension of the Argentine-flag registration of vessels to register them under foreign registries for up to ten years. It also facilitated the possibility for foreign-flagged vessels to obtain Argentine-flag treatment to operate in Argentine cabotage.

During the months it was in force, the Decree was subject to multiple constitutional challenges (amparos), mainly before labor courts, which led to precautionary injunctions that suspended certain sections of its provisions, especially those restricting strike rights and amending crew members’ contracts regulations.

The rejection by both Houses of Congress is a rare occurrence in Argentina. There are few precedents of bicameral rejection of an Emergency Decree. The repeal of the Decree, however, does not affect the rights that were acquired while it was in force (article 24 of Law 26122).

Given this new political scenario, it will be important to evaluate the government’s reaction in view of its intention to the modernize and give new impetus to a sector that is so crucial for the Argentine economy.