The Government Orders the enforcement of the Supply Act in Light of Coronavirus

In the context of the declaration of the coronavirus (COVID-19) sanitary emergency, the Argentine Government resorted to a law that grants vast powers to regulate the economy.

In recent days, the Argentine Government issued the following measures involving the enforcement of the Supply Act (Law No. 20,680) to guarantee the regular supply of essential products to the market:

1. The empowerment of the Ministry of Health and the Ministry of Productive Development to set maximum prices for sanitizing gel, face masks and other critical materials and to adopt the necessary measures to prevent their shortage (Decree No. 260/2020, Section 2).

2. The enforcement of the Supply Act to sanitizing gel (and other similar products for the cleaning of hands that include alcohol as their main element), reverting its prices to the values of February 15, 2020, setting reference prices for consumers and requesting that companies included in the production, distribution and commercialization chain of sanitizing gel and the materials necessary to produce it increase their production to their full capacity, and to inform their sale prices on a weekly basis for a 90-day period (Resolution No. 86/2020 of the Secretariat of Local Commerce, Sections 1-4; and Resolution 115/2020, Sections 1 y 4).

3. The enforcement of the Supply Act to companies included in the production, distribution and commercialization chain of “contact thermometer” (setting prices that cannot exceed their prices on March 6) and non-surgical and/or one layer face masks (setting maximum prices of ARS 40); and limited the sale of N95 type, surgical and three layer sanitizing masks to professionals, staff and entities of the health sector (Resolution 114/2020 of the Secretariat of Local Commerce, Sections 1, 2 and 4).

4. The suspension of the exclusion of micro, small and medium-sized enterprises (“MIPyMES”, after their acronym in Spanish) from the scope of the Supply Act while the coronavirus sanitary emergency lasts (Decree No. 287/2020, Section 2). Therefore, these companies could now also be subject to its provisions.

5. The enforcement of the Supply Act upon anyone who “puts at risk the general well-being of the Argentine people” (Resolution No. 98/2020 of the Secretariat of Local Commerce, Section 8).

6. The obligation of those who participate in the production, distribution and commercialization chain of certain products, for a 30-day period (renewable if necessary), to (i) sell them to their maximum prices as of March 6, 2020; and (ii) to increase production to their full capacity and provide the proper measures to guarantee their transport and supply (Resolution No. 100/2020 of the Secretariat of Local Commerce, Section 1-4).

7. The creation of (i) an informative regime for the purpose of publishing standard maximum prices of a basic listing of consumer products for each province (which will be available on the website www.preciosmaximos.produccion.gob.ar); and (ii) a public and free mechanism that allows the filing of claims and complaints by consumers and those included in the production, distribution and commercialization chain of the products included in the obligation to sell at maximum prices under Resolution no. 100/2020 (Disposition 3/2020 of the Subsecretariat of Measures for the Defense of Consumers, Sections 1-3). This measure has been successively extended.

Those measures (jointly with other announcements that up to the present have not been turned into regulations) suggest that the Argentine Government would be planning to enforce the Supply Act broadly to avoid potential shortage on the supply or increase in the prices of products deemed essential. Therefore, it is advisable to pay special attention to the exercise of such powers and the legal remedies available to properly respond to those requests, and to the possible proceedings that may result from the enforcement of the Supply Act.