Guiding Principles and Declaration of Emergency - Delegation of Legislative Powers

On December 27, 2023, the Administration of President Javier Milei submitted to the Congress the extensive Bill "Bases and Points of Departure for the Freedom of the Argentine People", which is expected to be discussed during the extraordinary sessions to be held by the Congress until January 31, 2024. The Bill includes, among many issues, a broad declaration of emergency and a delegation of legislative powers to the Executive Branch.

The Bill has 664 articles plus 6 annexes, some of which—in practice—are independent bills, given their extension. It is an extremely comprehensive initiative that proposes reforms in a wide range of areas, both in the fields of public and private law.

1. Guiding Principles

In its first two articles, the Bill establishes its "principles and purposes." In this sense, it states that it seeks to promote individual freedom, as well as the development of industry and commerce; to protect private property, and limit state intervention. It also emphasizes the deepening of the freedom of markets and highlights the need to promote private productive employment.

The Bill also highlights the principles of reasonability and proportionality as standards to guide legislative and regulatory activity, and proposes reconsidering the functions of the Federal Government in the different sectors of society. Along these lines, it calls for a "rational and sustainable organization of the Public Administration."

2. Declaration of emergency

The Bill includes a broad declaration of public emergency in economic, financial, tax, social security, security, defense, tariff, energy, health, administrative, and social matters. The scope of the emergency to be declared includes the matters covered by the declaration in Emergency Decree 70/2023, published on December 20, 2023, and extends to security, defense, and energy areas, which were not included there.  

Although at the beginning this legal concept was intended for strictly exceptional situations, in the last decades, emergency declarations have been consolidated as an institutional practice common to different governments. According to the case law of the Argentine Supreme Court of Justice, the state of emergency authorizes a more intense exercise of the Government's regulatory power.

The declaration of emergency in the Bill is to last until December 31, 2025, but it enables the Executive to extend such term for two more years. This declaration of emergency also serves as a basis for the delegation of powers to the Executive Branch contained in the Bill.

3. Delegation of legislative powers

The Bill promotes a vast delegation of legislative powers to the Executive. The possibility for the Congress to delegate legislative powers to the Executive is included in article 76 of the Argentine Constitution. This constitutional provision enables delegating legislative powers for specific administrative matters or in cases of public emergency, but states that it must necessarily be done "with a fixed term for its exercise and within the bases [...] established by Congress." On the other hand, it states that the expiration of the term does not mean that the legal relations entered into under the delegated legislation must be reviewed.

In this sense, the Bill states that the rules issued in the exercise of this delegation will be permanent, except when the nature of the measure determines its transitory nature and it is expressly so provided.

Regarding the bases of the delegation, the Bill lists:

• Promotion of an economic system that favors free concurrence and competition, and respects private property and initiative.
• Deregulation of trade, services and industry, and elimination of restrictions on the supply of goods and services.
• Reactivation of production and elimination of restrictions to competition.
• Creation of conditions for sustainable economic growth compatible with the restructuring of the public debt.
• Reorganization of the federal public administration.
• Strengthening of the civil service of the federal public administration.
• Reduction of bureaucracy and simplification of the federal administrative regulations.
• Establishment of a regulatory quality policy for the federal public administration.
• Organization and regulation of the public procurement system in a single regulatory body.
• Establishing dispute resolution systems between the administration and private parties as an alternative to judicial proceedings.
• Renegotiation or termination of contracts entered into by the public administration based on the availability of state funds and public needs, respecting the acquired rights of contractors.
• Development of a national defense system capable of safeguarding the highest interests of the Nation.
• Creating, modifying, transforming, and/or eliminating public fiduciary funds created by rules with legal rank.
• Transparency in the administration of resources destined to specific allocations and general revenues.
• Restructuring of the tariffs of the energy system with criteria of distributive equity and productive sustainability, and reorganization of the operation of the regulatory agencies.
• Transparency in the management of public debt and avoidance of the increase of the State's gross debt.

It is important to point out that, as indicated in the Bill, according to the stipulations of article 100 paragraph 12 of the Argentine Constitution, all decrees issued in exercise of delegated powers are subject to legislative control, in accordance with the procedure in Law 26122.

On the other hand, the Bill establishes that the exercise of the delegated legislative powers will be subject to the control of the Mixed Commission for the Reform of the State and the Follow-up of Privatizations as stated in Law 23696 on the Reform of the State.

It is clear that if the Congress passes the Bill, it will surely be the starting point for enacting several rules of legislative content and hierarchy that could redesign regulations on several administrative and regulatory matters in general.

4. Request for ratification of Decree 70/2023

Among the final provisions, the Bill proposes ratifying the Emergency Decree 70/23, "Bases for the Reconstruction of the Argentine Economy."

5. Invitation to the Provinces

The final provisions also invite the Provinces and the City of Buenos Aires to issue the necessary regulations to establish procedures consistent with the purposes of the Bill.