Rural Land Regulation Enacted

On February 28, 2012, through Decree 274/2012 (the “Decree”) published on February 29, 2012, the National Executive Branch regulated Law 26,737 which set limits on rural land ownership by foreigners (for further information on this law see “Limits on Rural Land Ownership by Foreigners” in Mining News, December 2011).

Said regulation provides the following rules:

1. Argentine provinces shall duly inform the following to the National Registry of Rural Lands (Registro Nacional de Tierras Rurales), within 60 days:

1. Its total surface area, its departments, municipalities or similar political divisions, distinguishing those which are rural from those which are urban;
2. All rural properties belonging to foreign individuals or entities, or possessed thereby, or a full detail of those who hold title to or possess rural lands, if available; and
3. A full list of foreign entities or local entities with foreign stockholders registered within their jurisdiction, as well as all additional information requested by the National Registry of Rural Lands for the enforcement of Law 26,737.

2. Regarding title holding and possession of rural property under joint ownership, joint owners will be deemed to hold a surface area proportional to their undivided share of the property.

3. The sworn statement form to be completed by the foreign entities’ management or legal representative in Argentina –as applicable-, in order to inform the National Registry of Rural Lands of the changes in their principals’ shareholdings, if any (see Exhibit A of the Decree).

4. Determines the “core area” for the Province of Buenos Aires.

5. As regards the total prohibition for foreign individuals and entities to hold title or possess property surrounding or adjacent to significant and permanent water bodies, it establishes that:

1. Water Bodies: are all fresh or salt waters in solid or liquid state, such as seas, rivers, streams, lakes, lagoons, wetlands, marshes, glaciers and aquifers which form the hydrological system of a geographic area, such as those contained in hydrologic works;
2. Significant: are those which on account of their size and/or depth, associated with their capacity to satisfy common use, are relevant to public policy in the region in which they are located; and
3. Permanent: are those which exist or re-emerge in a medium hydrological cycle.

6. The Interministerial Rural Land Council (Consejo Interministerial de Tierras Rurales) must determine the equivalent surfaces for core areas; and while such equivalent surfaces are not determined, the 1,000 hectare threshold (for rural land acquisition by foreign individuals or entities) is applicable throughout all territory pending such determination, for the granting of permits for transfer of property or possession of rural lands.

7. The form to be completed by foreign individuals or entities who hold title to or possess rural lands, in order to communicate the National Registry of Rural Lands of such title holding or possession (see Exhibit A of the Decree).

Lack of compliance with the obligations set forth in items 3 and 7 above will be informed to the corresponding public registry of commerce, the Federal Tax Authorities (Administración Federal de Ingresos Públicos) and the Financial Intelligence Unit of Argentina (Unidad de Información Financiera), for these agencies to verify that all registration, tax and money laundering prevention obligations are fulfilled by the individuals and entities involved, as well as their partners, managers and legal representatives.