FIU - New LA / FT Prevention Guidelines for Credit Card Operators
On July 29, 2019 the Financial Information Unit (“FIU”) issued Resolution No. 76/2019 (the “Resolution”), establishing the guidelines for preventing money laundering and terrorist financing (“ML/TF”), which shall be applicable to all operators in the credit and purchasing card sector, as well as to travelers checks issuers.
The Resolution adopted guidelines similar to those previously established by FIU Resolution No. 30-E/2017, applicable to financial institutions. Consequently, credit and purchasing card operators, and travelers checks issuers, must develop a self-assessment risk system, in compliance with the risk factors and risk mitigation determined by the Resolution. They shall also comply with the “know your client’s profile policy” as well as be in possession of detailed records reflecting a deep knowledge and profile of their clients.
Additionally, the obliged subjects shall (i) maintain a procedures manual in order to prevent ML/TF, as well as with appointing a compliance officer; and (ii) provide the requiring clients all their information and documentation concerning their identification and the origin of the funds.
Regarding to its enforcement, the Resolution establishes a progressive implementation schedule, starting on December 31, 2019, so as to complete with all requirements on February 28, 2020.
Finally, within 10 days of publication of the Resolution, the obliged subjects must report the FIU with the appointment of a person responsible to address urgent matters.
For further information, please do not hesitate to contact Eugenia Pracchia or compliance@trsym.com.
Public Tender for the Construction of the Gas Del Centro Natural Gas Transportation System
By means of Resolution No. 437/19 (the “Resolution”), the Secretary of Government of Energy (the “SGE”) has called for a public bidding procedure for purposes of awarding a new natural gas transport license (the “License”). This new infrastructure project entails the design and construction of a natural gas pipeline that will: (i) connect a facility located in the Neuquén’s Subzone with another facility located in the city of Salliqueló, Province of Buenos Aires; and (ii) interconnect the Salliqueló’s facility with TGN’s gas transportation system in a spot near the city of San Nicolás, Province of Buenos Aires. This new transportation system has been officially named as Transporte Gas del Centro (the “Project”).
The Resolution also approved the definitive version of the bidding terms and conditions (the “Terms and Conditions”) and its annexes. Finally, the Resolution scheduled the submission of bids date on September 12th, 2019.
Below are the Terms and Conditions’ most important aspects:
(a) Required Works
The Project includes:
(1) Phase 1: construction of 570 km of a 36 inch pipeline with an initial capacity of 15 MMm3/day of natural gas (9.300 kcal/m3) and a future minimum capacity of 40 MMm3/day, which will connect a gas facility located near Tratayén, Neuquén, with a facility located near to the city of Saliquelló, Buenos Aires (“Phase 1”); and
(2) Phase 2: construction of 470 km of a 30 inch pipeline with a minimum capacity of 20 MMm3/day of natural gas (9,300 kcal/m3) which will connect the facility located near city of Saliquello, Buenos Aires with a gas pipeline located near the city of San Nicolás de los Arroyos, Buenos Aires (the “Phase 2”).
(b) Schedule (main milestones and occurrence expected time pursuant to the Terms and Conditions)
| Milestone | Expected Date |
| Consultation Period | Until August 29th |
| Publishing by the SGE of circular letters (amendment and clarification) | Until September 5th |
| Bids’ Submission | September 12th |
| Offers’ Opening | September 12th |
| Offers Assessment | September 26th |
| Bids’ Qualification | October 3rd |
| Economic Offer’s Opening | October 8th |
| Award Date | October 21st |
| Execution of the License | November 20th |
Additionally, the following milestones, regarding the execution of the works, are scheduled (terms shall begin on the License’s execution date):
| Milestone | Phase 1 | Phase 2 |
| Presentation of the final project | 2 months | 42 months |
| Financial Close | 6 months | N/A |
| Partial Operation | 18 months | N/A |
| Commercial Operation | 24 months | 60 months |
(c) Economic Offer: CAMMESA’s Transportation Agreement
Bidders must bid a monthly fee regarding the CAMMESA’s Transportation Agreement (as this term is defined below) for the contracted Phase 1’s transport capacity corresponding to 10 MMm3/day. The bidder proposing the lower amount shall be awarded.
Jointly with the execution of the License, the awardee shall execute the Offer Letter attached as Annex IV of the Terms and Conditions (“CAMMESA’s Transportation Agreement”).
(d) Financing provided by ANSES’ Guarantee
Fund Pursuant to the Terms and Conditions, the awardee is entitled to apply for a financing facility from ANSES’ Guarantee Fund. Main terms of the financing conditions are summarized below:
(1) Validity Term of the Financing Commitment¸ the first one to occur between:
- Fourteen (14) months since the execution of the Commitment Letter by and between the ANSES and the SGE; or
- Ten (10) months since the awarding date.
(2) Type of Titles: Securities issued under the Argentine Offer Public Regime.
(3) Maximum Amount: US Dollars four hundred million (USD 400,000,000).
(4) Securities’ Maturity: fourteen (14) years.
(5) Interest Rate: Linked to (i) sovereign yields for similar maturity terms; and (ii) Project’s risk.
For further information, please do not hesitate to contact either Nicolás Eliaschev or Javier Constanzó.
Natural Gas Exports: Regulatory Updates
On July 26, 2019, Resolution No. 417/19 (the “Resolution”), issued by the Secretary of Government of Energy of the Ministry of Treasury has been published in the Official Gazette with important implications regarding natural gas exports. This Resolution approves a new procedure that must be complied with by those interested in exporting natural gas.
The Resolution revokes prior Resolution No. 104/18 issued by the former Ministry of Energy on August 22, 2018.
This Resolution also entrusts the Undersecretary of Hydrocarbons and Fuels to: (i) enact the applicable framework that shall rule mechanisms for energy substitution for natural gas exports on a firm basis - notwithstanding Resolution’s applicability until such mechanisms are enacted-, and (ii) the elaboration and further approval of the mechanisms applicable for natural gas exports which shall apply upon shortage of natural gas in the local market.
The Resolution’s most relevant aspects are outlined below:
- Type of authorizations: The Resolution foresees four (4) kinds of authorizations:
- Firm or uninterruptible: natural gas purchase agreements which contemplate delivery and reception of gas by the contracting parties that are mandatory and cannot be carved-out except for force majeure events;
- Interruptible: natural gas purchase agreements which do not contain mandatory delivery and/or reception provisions which bind the contracting parties;
- Operational exchanges: agreements executed for purposes of attending operational requirements (back-up fuel) and/or emergency scenarios and others of similar nature, to the extent the enforcement authority requires the exporting party to reimport equal amounts of natural gas (or equivalent electricity quantities) within twelve (12) months as of the first event of exportation;
- Assistance agreements: for providing support to neighboring countries under critical situations and/or declared states of emergency. The exporter shall not be required to import equivalent volumes of the exported natural gas nor its equivalent in power. These exports are excluded from the procedure provided in the Resolution.
- Simplification of the procedure to request the authorization: The export filing request shall be made digitally through an online remote platform.
- Unconventional natural gas: The volume of exported natural gas produced by a project benefited from the Government’s Incentive Program will be offset from the project’s total production, prior to the determination of the project’s Included Production volumes. Former Resolution No. 104/18 provided that exported gas could not be employed within the Government’s Incentive Program approved for unconventional gas.
For further information, please do not hesitate to contact either Nicolás Eliaschev or Javier Constanzó.
Relevant News on the Renewable Energy Sector
On July 11th, 2019, Decree No. 476 (the “Decree”) of the National Executive was published in the Official Gazette, with relevant news regarding the renewable energy regime.
The Decree has partially amended Decree No. 531/2016 (regulating) Laws No. 26,190 and No. 27,191. Most relevant aspects of the Decree are summarized below:
- Simplification of the process to obtain the Inclusion Certificate
The Secretary of Government of Energy—in its capacity as enforcement authority of the renewable energy regime—is empowered to: (i) analyze and approve the renewable projects that may apply for the Inclusion Certificate; and (ii) grant, to each of the approved projects, amounts requested as tax benefits, without the prior intervention of the Secretary of Treasury. In addition, the Decree eliminates the Ministry of Treasury’s intervention which is now no longer required.
- Execution of Power Purchase Agreements (“PPAs”) with public-owned entities
The Decree entitles CAMMESA (Wholesale Electric Market Management Company) to enter into PPAs with public-owned entities (either national, provincial and/or City of Buenos Aires’ owned). Prior the Decree, such entities were allowed to execute PPAs with CAMMESA insofar they participated in public tender procedures. The Decree now allows them to execute PPAs without participating in those procedures, to the extent that the following requirements are met: (i) the generation facility is owned by such public entities; (ii) those projects are able to access better financing conditions in comparison with the ones that the Federal or Provincial State could access to; and (iii) the investment projects have a relevant impact in local development.
Assignment, transfer or subcontracting of the PPAs are forbidden.
The agreed price under the PPA must be in line with those arising from public tendering called by the Secretary of Government of Energy, which implies that these agreements must be entered on a market condition basis.
As of this measure, public-owned entities are now eligible to enter into PPAs: (i) within the term market (approved by Resolution No. 281/17), and/or (ii) directly with CAMMESA, either directly (based on the Decree) or after being selected as such after a competitive procedure is carried out.
- Expectations for the Round 4 of the RenovAr Program
Senior officers of the Secretary of Government of Energy have announced that they are working in the design of the future Round 4 of the RenovAr Program, which is expected to be officially launched on November 2019.
Unlike the other rounds of the RenovAr Program, this new round is believed to require the bidders, in addition to their generation projects, the execution of works for the extension of the transmission capacity of some main lines of the Argentine electricity sector.
For further information, please do not hesitate to contact either Nicolás Eliaschev, Javier Constanzó or Juan Pablo Filippini.
Vaca Muerta: The Contracting Process for the Construction of an Essential Natural Gas Pipeline has Begun
On July 10th, 2019, Decree No. 465 (the “Decree”), issued by President Macri, has been published in the Official Gazette. By means of the Decree, the Secretary of Government of Energy (the “SGE”) has been instructed to call a public national and international tender with the purpose of awarding a new natural gas transport license for a new facility. This new infrastructure project entails the design and construction of a natural gas pipeline that will connect the Neuquén’s Subzone with the cities of Salliqueló and San Nicolás, both located in the province of Buenos Aires.
Pursuant to the Decree, the new transport license shall include a special regime lasting 17 years as from commercial operation date. The main terms of this special regime are summarized below:
- The licensee’s remuneration shall be freely negotiated with the users of the gas pipeline;
- The licensee’s remuneration shall not impact in the natural gas residential end users’ rates;
- The terms and conditions of the tender to be called by the SGE shall provide a partial award of pipeline’s capacity. The remaining capacity shall be assigned through public tenders, in compliance with the applicable regulations.
Finally, the Decree provides that Law No. 24,076 -that rules natural gas’ transportation and distribution-, shall be the project’s legal framework, instead of the Law No. 17,319 -that recognizes the operating concessionaire’s right to transport its hydrocarbons-. However, as long as the special regime remains effective, Law No. 24,076, Title IX, Chapter I provisions to the extent they contradict the Decree, shall not be applicable.
For further information, please do not hesitate to contact either Nicolás Eliaschev, Javier Constanzó or Juan Pablo Filippini.
20 Minute Insight
📺 👉🏼 Our partner Nicolás Eliaschev was interviewed by Jamie Dowswell, Programme Director of AIREC, about the outlook for Argentina's Renewable Energy Sector for this year.
Regulatory Updates: New Terms and Conditions for Hydrocarbon Transport Concession's Public Tendering
On July 1st, 2019, Resolution No. 357 (the “Resolution”), issued by the Secretary of Government of Energy (the “SGE”), has been published in the Official Gazette, with important implications in regards to public tendering procedures which shall be carried out in order to grant concessions for hydrocarbon’s transportation. Tenders of this nature may rely on project’s submitted by private entities, as further described below.
Pursuant to Annex I of the Resolution, those tenders may comprise:
- Concessions for hydrocarbon’s transportation, which have been reverted from the former concessionaire to the pertaining governmental body or entity.
- Projects submitted by private entities, which shall contain minimum standards such as a general description of the project’s nature and aspects involved in its execution, land matters, etc.
- New hydrocarbon transportation projects required to satisfy demands of the users.
The Resolution also foresees that all public tenders launched by the SGE in order to grant a hydrocarbon transport concession shall contain a bid document containing main terms and conditions of such competitive procedure.
In addition the Resolution further stipulates requires that all projects submitted by any private entity to the relevant governmental authorities must clearly specify land matters-related issues involved in such project.
The Resolution also authorizes foreign corporations (not registered in Argentina’s registries of commerce as of the date on which the Resolution is issued) to submit proposals of this nature for purposes of being evaluated and subject to a public tendering thereafter. However, foreign entities are bound to register before the mentioned registries’, to the extent that their proposal is admitted and prior to the public tender being issued.
Furthermore, the Resolution indicates that the governmental authorities shall provide their ruling regarding project’s feasibility no later than thirty (30) business days from the project being submitted thereof.
Finally, the Resolution requires prior registration of the interested companies before the Hydrocarbon Transport Registry for their participation in the public tenders.
For further information, please do not hesitate to contact either Nicolás Eliaschev or Javier Constanzó.
Changes to the Fair Trading Act: extension of the unfair competition acts
On April 22th 2019, the necessary and urgent decree No. 274/2019 was published on the Official Gazette, by virtue of which Law No. 22,802 (the “Fair Trading Law”) was abrogated, and a new rule of law regarding fair trade was enacted (the “Decree”) which shall enter in force as from April 30th 2019.
The purpose of the Decree is to ensure fairness and transparency in commercial relationships and the access to essential information of products and services that are commercialized, through physical or digital means, extending the previous provisions contained in the Fair Trading Law.
The Decree is divided into a preliminary title and 8 titles which regulate: (i) unfair competition; (ii) advertising and promotions; (iii) trade information; (iv) enforcement authority, administrative procedures, as well as the remedies and sanctions; (v) legal actions; (vi) general provisions; (vii) consumer protection; and (viii) final provisions.
The main change that the Decree includes is the enumeration of acts that constitute an unfair competition,: (i) acts of deception; (ii) acts of confusion; (iii) breach of legal regulations; (iv) abuse of a depending economic situation; (v) Improperly obtaining of commercial conditions; (vi) sale below cost; (vii) improper exploitation of others’ reputation; (viii) acts of unfair imitation; (ix) acts of denigration; and (x) violation of secrets. The Decree defines in its article No. 10 unfair competition in a very broad way and systematically includes situations that shall constitute an unfair competition, such as acts of denigration, violation of secrets and the improper exploitation of others’ reputation. Such situations shall be deemed exhaustive, for the purposes of the imposition of sanctions by the Secretariat of Internal Commerce of the Ministry of Production and Labor, acting as the enforcement authority, and enunciative for the purpose of promoting legal actions by affected ones. With the Decree, the maximum amounts of the fines are substantially increased to an amount of 10,000,000 mobile units (approx. AR$ 264,000,000), the procedural rules for infringements are established and new legal actions are provided for those affected by unfair competitions acts.
Additionally, the requirements for the identification of products commercialized, the provisions for misleading advertising, and the regulations on sales promotions that contain pizers or gifts, among other issues, are maintained.
Regarding advertising as unfair competition, a definition of comparative advertising is incorporated, which states that advertising is to be considered comparative when explicitly or implicitly refers to a competitor, its brand or the products or services offered by it.
Additionally, the Decree incorporates to the Consumer Protection Law No. 26,993 (the "Consumer Protection Law"), article 1 bis, which provides the inclusion of the Electronic Dispute Resolution System, as a previous, optional and free procedure for users and consumers. for access to the Prior Reconciliation Service in Consumer Relations (COPREC for its acronym in Spanish), through which the individual or collective consumers and users’ claims shall be resolved, instructing the authority of the Consumer Protection Law to regulate its scope.
Finally, it should be noted that the provisions of the Decree are considered to be public policy rules, as stated in article 2; the principles of the national administrative proceedings law o No. 19,549 are applicable to the procedure provided in the Decree; and that the provisions of the National Civil and Commercial Code shall apply.
Any further information, please do not hesitate to contact Juan Pablo Bove, Federico Otero, Julián Razumny, or corporate@trsym.com.
Simplification of requirements for foreign companies
On April 3rd, 2019, the National Securities Commission (the "CNV") issued General Resolution Nº 789/2019. It amended prior CNV rules in order to facilitate the registration processes with this authority.
In such respect, CNV established that:
- the attendance of an attorney in fact duly authorized will suffice for a foreign company to participate in a shareholder meeting. In this regard, an attorney in fact shall be considered duly authorized as follows:
- the legal representative appointed for the Argentine Republic;
- any person with a power granted by the legal representative in the Argentine Republic or by a person authorized in accordance with the rules of the country of origin under the terms of Section 239 of the Law Nº 19,550; and
- any person with a power granted abroad by an authorized person in accordance with the legal requirements of the country of origin and with applicable rules for foreign documents in Argentina.
- Furthermore, companies whose register of entry shares were issued in accordance with Section 208 of the General Corporations Law, may replace the Stock Registry Book and the Book of Assembly Attendance traditional paper format by a new computerized system by applying for an authorization before the CNV. The original documents must be kept in paper format at the registered office.
Any further information, please do not hesitate to contact Juan Pablo Bove, Federico Otero, Julián Razumny, or corporate@trsym.com.
New works and expansion of existing infrastructure – Neuquén basin gas pipeline and PPP Power transmission
On March 8, 2019, two resolutions issued by the Secretary of Government of Energy (the “SGE”), containing relevant rules in connection with infrastructure works of the electricity and gas industries, were published in the Official Gazette:
(1) Resolution SGE No. 81/2019 (“Resolution 81”), related to the construction and further operation of the 500-kV high-voltage line, the future substations Río Diamante and Charlone, and complementary works, under a public-private partnership structure (“PPP”). By means of this Resolution 81, call for bids set out in 2018 have been relaunched; and
(2) Resolution SGE No. 82/2019 (“Resolution 82”), related to the construction of a new gas pipeline or the significant expansion of existing transport capacity for the transportation of natural gas produced in the Neuquén basin towards the metropolitan area of the province of Buenos Aires.
The most relevant aspects of both resolutions are summarized below:
- Resolution SGE No. 81/2019 – PPP Power transmission works
Resolution 81 calls for a two-stage national and international tender procedure for the construction and further of the 500-kV high-voltage line, the future substations Río Diamante and Charlone, and complementary works.
Such works also comprise the electrical interconnection in 500-kV of the future substations Río Diamante, Charlone, and complementary works, as well as operation and maintenance of these facilities.
The tender’s terms and conditions and its annexes are published on the website of the Undersecretary of Public-Private Partnership, together with the rest of the preliminary tender documents.
The most important dates to keep in mind are:
Date and time Activity May 10, 2019 Public consultation period due date May 27, 2019 Deadline for bids June 27, 2019 Publication of the Prequalification Ruling (Dictamen de Evaluación de Precalificación) July 2, 2019 Opening of envelope no. 2 July 10, 2019 Publication of the Economic Offers’ Evaluation Ruling (Dictamen de Evaluación de las Ofertas Económicas) July 12, 2019 Resolution awarding PPP Contract August 14, 2019 Due date for PPP Contract execution - Resolution SGE No. 82/2019 – Vaca Muerta gas pipeline
Resolution 82 calls for expressions of interest in connection with: (i) the construction of a new gas pipeline; or (ii) the development of a significant expansion of the current transport capacity.
Expressions of interests aim to enhance transportation of natural gas produced in the Neuquén basin towards the metropolitan area of the province of Buenos Aires and the littoral area.
Interested parties in participating in this procedure shall submit their expressions of interest no later than April 8, 2019.
- Scope
With respect to the construction of a new transport system, a public tender procedure for the construction, operation and maintenance of the new infrastructure shall be called on a later stage.
Capacity expansions of one or all existing transport systems shall be authorized in accordance with section 16 of law No. 24.076. Expansions which generate an additional capacity of 10 MMm3/d shall be considered as “significant expansions”.
In all scenarios a technical description of the proposed project shall be issued. Such description must include the necessary works, design, nominal transport capacity to be added and construction and launch dates. Moreover, information to evaluate the potential demand associated to the project shall be issued.
- Rate structure
Interest parties may propose a rate scheme applicable for the new facilities.
For expansions, criteria set forth in Resolution No. 1483 issued by the Ente Nacional Regulador del Gas (ENARGAS) shall be applicable (incremental cost criteria).
- Access to the facilities by third parties
Open access and no third-party discrimination shall be applicable. Moreover, long-term agreements with parties acting as gas traders may be executed, in the event that the proposed rate scheme requires so.
- Scope
Desde TRSyM, estamos siguiendo este proceso con mucha atención y estamos a disposición para ampliar cualquiera de los puntos aquí tratados.