A good Court decision

At the beginning of 2007, the Secretary of Domestic Trade and the Secretary of Mining enacted Resolutions Nºs 288 and 130 ('Resolutions SDT 288 and SM 130'), which instructed the Argentine Customs Bureau to collect export taxes from companies which had obtained their certificates of fiscal stability (stated in Law Nº 24.196; 'Mining Investments Law') before taxes on mining exports were imposed (Resolution Nº 11/2002 of the Ministry of Economy and Infrastructure; 03/05/2002). The Government's rationale to impose export taxes on exempt mining companies is the following: at the time tax stability certificates were granted, prices of minerals were far below from the prices of 2007; therefore, tax stability was built on the value of minerals at the time mining projects were filed. Due to the increase of the value of minerals, which in some cases was three times the value at the moment the stability certificates were granted, the stability guarantee was no longer applicable. Minera del Altiplano Ltd. had obtained several stability certificates, with different territorial and fiscal extents, from May 26, 1998 to May 30, 2000. Therefore, at the time taxes on mining exports were imposed (03/05/2002), Minera del Altiplano Ltd. had the certificates which granted that the tax burden upon the beneficiary cannot increase. However, Resolutions SDT 288 and SM 130 disregarded the Mining Investments Law and ordered the Argentine Customs Bureau to get from Minera del Altiplano Ltd. the payment of the taxes of mining exports. Minera del Altiplano Ltd. filed an 'amparo' -a summary proceeding- which purported to leave the Government's behavior without effect.

On August 13, 2009, the Federal Court of Appeals of the Province of Salta rendered a decision in the case "Minera del Altiplano S.A. c. Estado Nacional - PEN y Otros s/ Amparo" (File Nº 345/08) accepting the claim promoted by Minera del Altiplano S.A. This is the first precedent from a Court of Appeals which admits the claim on the merits of the case from a mining company under the protection given by the Mining Investments Law. Hence, its legal significance.

The Court considered that, since the plaintiff had obtained the stability certificates set in the Mining Investments Law, all the requirements contained in said Law were complied with. Moreover, the Court declared that at the time taxes on mining exports were imposed (Resolution MEI Nº 11/2002), the Argentine Customs Bureau enacted General Instruction Nº 19/2002, which clearly established that previous regulations granting fiscal exemptions (such as the fiscal stability contained in the Mining Investments Law) for the payment of export taxes will continue to be in force. The Court also mentioned that the plaintiff should not have challenged the regulations which created taxes on mining exports, since said regulation was not applicable as the company was already exempt from new taxes. The Government itself recognized said exemption through General Instruction Nº 19/2002 of the Argentine Customs Bureau.

On the other hand, the Court denied the Government' argument regarding the fact that the plaintiff should have filed its claim to the competent fiscal agency, since it was proved that Resolutions SDT 288 and SM 130 increased the plaintiff' tax burden. The Court also stated that, since the Government contradicted stoppel, it should have proved that the tax burden had not increased as a result of said Resolutions. The Court concludes that, not even in the file did the Government demonstrate such fact. The impossibility of proving such a fact is obvious since the tax burden was indeed increased by the Resolutions.

Finally, the Court accurately held that it was not necessary to analyze the fact that the rate of return of the project was not modified as a result of the imposition of taxes on exports because the increase of the price of traded commodities does not authorize infringing the fiscal stability.

We consider that the Court has correctly applied the aforementioned rules and has reached a fair solution. The attempt of the Argentine Government to impose new taxes on companies under the Mining Investments Law can be qualified, at the very least, as unfortunate. The Government should promote new investments which benefit the economy as a whole. Mining investment demands large quantities of money, is a high-risk activity and, as such, requires being developed in a stable legal framework. The response of the courts has been appropriate, which allows foreseeing an encouraging scenario to future investors locating in the country.