Patrick PatelinJavier Bordaberry Herrán- Matías Avila Nores
CMS Bureau Francis Lefebvre Mercosur
The scope of This article is to presents the main legal issues imposed by the eEmergency lLegislation, in Argentina and the subsequent and to highlight the changes to itsoccurred to such legal framework.
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In December 2001, the economic crisis in Argentina forcedpromptedimpelled the Government to impose: (i) severe tringent exchange control limits on residents’ ability to access the exchange market and transfer funds abroad, (ii) rrestrictionslimitations on cash withdrawals from bank accounts and(iii) the obligatorymandatory conversion to pesos of bank deposits in foreign currenciesy (“‘pPesification”’).
On 1 December 2001, t
The Executive Branch issued on December 1st, 2001 tThe Presidential Decree No. 1570/2001 (B.O. 03 December/12/ 2001) had the objective to avoid the constantcontinuing outflow of capital from the banksfinancial entities. The Decree 1570/2001forbadeidsprohibited (i) the withdrawal of more than USD$ 250 per week and, (ii) the transfer of funds abroad (with some exceptions),. Moreover, such Decree mandated that exports proceeds should be deposited within the Argentine banking system. and (ii) it was reinstated the obligation of entering the country the proceeds in foreign currency from exports.(date) The Decree 1570/2001 introduced this new regime, andwas supplemented, and regulated by subsequent Presidential Decrees,[i], resolutions of the Ministry of Economy,[ii], and by resolutions of the Argentine Central Bank (“BCRA”) and by other governmental agencies thatwhich require investors and professionals to follow up those regulations on a day-to-day basis.s, in particular numerous communications and telephone announcements ( what does that mean?) of the Argentine Central Bank (BCRA).
On 6 January 6th, 2002, the Argentine Congress passed the Law No. 25.561 (B.O. 07 January /01/2002____________), the of Public Emergency and Foreign Exchange System Reform Act (hereinafter the “‘Emergency Law”’).
The Emergency Law officially declares the a state of social, economic, administrative, financial and foreign exchange publicemergency, delegating to the Executive Branch enough facultiespowers sufficient to(pease add footnote)[iii]:
1) (i) rRestructure the financial and banking systems, as well as the foreign exchange market;
2) (ii) rReactivate economic activities, decrease unemployment and improve income distribution;
3) (iii) cCreate the necessary conditions for sustainable economic growth consistent with publicdebt restructuring; and
4) (iv) rRegulate the restructuring of obligationsnegotiation of a new repayment schedule for outstanding liabilities affected by the new foreign exchange system replacing the currency board that pegged the peso at a par to the US dollar.
Specifically, the Executive Branch is was thus empowered to set the peso exchange rate and issue other foreign exchange regulations.On 2 February [2nd] 22002, the Executive Branch enacted the Decree No. 214/2002 (B.O. 04 February/02/ 2002) entitled "‘Financial System Restructuring"’, which regulated and amended the Emergency Law. The constitutionality of the Decree No. 214/2002 has been challenged before the courts with diverse results and sometimes contradictionsories.
As a consequence of theseis laws, decrees,communications of the BCRAArgentine Central Bank and several other regulations (hereinafter “‘the Emergency regulationRegulation”’), bank depositors filled lushed the courts with claims requesting precautionary measures (“amparos”) pursuant to which judgwith the objective ofto es orderedobtaining the banks to return the depositorsof their monieys in the currency in which the deposits were...