Updated Value of Thresholds and Fines under Argentine Antitrust Law

By means of Resolution No. 13/2020 issued by the Secretariat of Domestic Trade (the “Resolution”), published in the Official Gazette on January 27, 2020, the value of the Adjustable Unit set out by Article 85 of the Antitrust Law 27,442 (the “Antitrust Law”) has been fixed at the sum of FORTY PESOS AND SIXTY ONE CENTS (ARS 40.61).

According to this new value of the Adjustable Unit, the amounts set out in the Antitrust Law are automatically increased as follows:

Merger Control threshold. Those economic concentrations in which the aggregate volume of business generated in Argentina by the Involved Companies (acquiring group and target or merging entities) in a transaction exceeds 100,000,000 Adjustable Units, equivalent to ARS 4,061,000,000 (USD 64,460,317 according to the officialexchange rate),[1] will require the approval of the Antitrust Commission.

         (A) If the company’s turnover is generated in Argentina by means of a local subsidiary, we recommend referring to the local financial statements which have to be issued in local currency, thus avoiding any distortion regarding exchange rates.

             (B) If the company is present through exports into the country (and, as such, has no local financial statements), the Antitrust Law sets out that the exchange rate to be used must be the sellers’ exchange rate published by the Banco de la Nación Argentina for the day corresponding to the end of the preceding fiscal year. For a financial year ending on December 31, 2019, the rate was 1 USD = 63 ARS (Source: Banco de la Nación Argentina).

The “de minimis” threshold.  If a notification is triggered, the “de minimis” exemption could apply if the total local assets of the target and the local amount of the transaction would each not exceed 20,000,000 Adjustable Units, equivalent to ARS 812,200,000 (approximately USD 12,700,000 according to the exchange rate currently available) provided, however, that it would not apply if any of the companies were involved in economic concentrations in the same relevant market for an aggregate of ARS 812,200,000  in the last 12 months or 60,000,000 Adjustable Units, equivalent to ARS 2,436,600,000 (approximately USD 38,000,000 according to the exchange rate currently available) in the last 36 months.

             (A) In this case, for the calculation of the assets, we also recommend referring to the local financial statements which have to be issued in local currency, thus avoiding any distortion regarding exchange rates.

             (B) For the calculation of the value of the transaction, the exchange rate available at the time of the closing should be taken into account.

Late filing fine. When the other method of calculation established by the Antitrust Law is not viable, the parties that did not comply with the mandatory notification will be subject to a fine of up to 750,000 Adjustable Units per day of delay, equivalent to ARS 30,457,500 (approximately USD 476,000 according to the exchange rate currently available).

Fines for anticompetitive conducts. When the other methods of calculation established by the Antitrust Law are not viable, the parties that have conducted anticompetitive conducts will be subject to a fine of up to 200,000,000 Adjustable Units, which represent ARS 8,122,000,000 (approximately USD 127,000,000 according to the exchange rate currently available).

The value set out by this Resolution became effective as from January 28, 2020 and will remain in force until the value for 2021 is published by the Secretariat of Domestic Trade or National Competition Authority. 

Finally, the Resolution does not provide for any other change as regards merger control proceedings. As such, the current non-suspensory regime continues to apply, by means of which the parties to a transaction are able to close it and carry out the notification either before or up to one week after the closing. The suspensory regime will enter into force one year after the effective creation of the National Competition Authority.