I OVERVIEW

The M&A market has been fairly depressed over the past few years, mostly because of the business and legal environment created by the previous administration, which affected the overall economy and the rule of law.

With the new administration taking office as of late 2015, many regulations affecting foreign investment were removed, which has helped to turn around a declining trend in M&A activity,2 albeit at a slower rate than was expected by most in the business community. Recent activity has been focused mainly on energy,3 but media and finance sectors were also relevant targets.

Once again, we have started to witness commercial banks and some private equity funds providing financing for M&A transactions. Only a few acquirers have used international capital markets. Foreign players have increased their participation in transactions.4

Even though the past two years have seen many improvements regarding M&As and financing, 2018 has presented several ups and downs.

On the one hand, during the first half of the year, Congress enacted the Productive Financing Law, which modified several aspects of the Argentine markets, creating a favourable environment and favourable conditions for economic growth. This news was well received by investors worldwide, and Argentina obtained a higher rating in the international indexes regarding markets with relevant investment opportunities.

On the other hand, during the second half of the year, mainly because of political, structural, internal and external issues, companies operating in capital markets greatly underperformed and a drastic and unavoidable devaluation of the Argentine peso soon followed. Inflation skyrocketed, and the government was forced to request a loan from the IMF. The news was not well received by the population or the business community, and, therefore, devaluation and inflation gave no respite. Volatility and economic recession are expected to follow until next year's presidential elections.

General opinion considers that the right measures are being taken to mitigate the consequences produced by the crisis, and, that in the long term, these decisions will bring economic growth and a favourable environment for investments.

II REGULATORY AND TAX MATTERS

i Regulatory matters

Anti-money laundering and corruption regulations

Anti-money laundering regulations always have an impact in transactions. Argentina is one of the members of the Financial Action Task Force (FATF) and the FATF of Latin America and has incorporated their recommendations into its legislation. In Argentine law, money laundering is a specific criminal offence that can be imputed both to legal entities as well as natural persons. The specific authority in charge of the investigation and the prevention of money laundering and terrorist financing is the Financial Information Unit, an agency responsible for issuing regulations and for monitoring compliance with money laundering, among other things. This has an impact on the financing of acquisition as, pursuant to local legislation, certain types of companies and individuals (which include financial entities, and certain government registries and agencies, among others) are required to report suspicious transactions to the Financial Information Unit and carry out 'know-your customer' procedures.

These requirements are not different from those implemented by most countries, as they are very much in line with international guidelines. They do not affect debt financing any differently than what occurs in most countries, although of course the actual enforcement of these policies is always country-specific.

The current administration has promised to make the fight against corruption one of its main political goals. Regarding new legislation, a corporate criminal liability regime was introduced in Argentina, in force as of March 2018, which provides for effective collaboration agreements, the implementation of compliance programmes and heavy fines of up to five times the undue benefit obtained by the legal entity, among other civil and administrative penalties.

Foreign exchange regulations

A major regulatory concern in any type of foreign financing is the existence of foreign exchange controls that may somehow restrict the flow of funds in and out of the country. This has always been a hot topic in Argentina, with a long history of strict controls. In this regard, Argentine law requires, as a general rule, that all transfers of foreign currency to and from the country are carried out through a licensed financial entity or a foreign exchange institution. Up until recently, the aforementioned transfers (along with almost all foreign exchange transactions) were subject to numerous restrictions and requirements imposed – mainly – by the Argentine Central Bank. However, these restrictions have been gradually eliminated since December 2015 by the current administration. Currently, Argentine residents (and non-residents) can purchase foreign currency through the foreign exchange market and transfer funds in and out of the country without restrictions.

ii Tax matters

Most common tax issues: income tax and value added tax (VAT)

Tax matters are most commonly the main drivers in the structure of any type of transaction, and acquisition financing is no exception. With regard to Argentina, there are several issues affecting acquisition financing in this jurisdiction that tend to determine the viability of a transaction.

The acquisition of a company can be carried out as a stock purchase or as an asset purchase, the latter having a special procedure of transfer as an ongoing concern. Transfer of assets or transfer as an ongoing concern (the transfer of assets in bulk regulated by a special law) is taxed at 30 per cent of the value of the transferred assets, minus acquisition costs and expenses. Furthermore, VAT of 21 per cent is applied to the purchase of all movable assets, whereas certain capital goods are taxed with VAT of 10.5 per cent.

Pursuant to Income Tax Law, the sale of shares is levied for:

  1. Argentine legal entities, at a 30 per cent income tax rate over the difference between the purchase value and the acquisition cost;
  2. Argentine individuals:
    • they would be exempted as long as the transfer is: a public offer placement authorised by the Argentine Securities and Exchange Commission (CNV); made on markets authorised by the CNV (such as MAE and ROFEX) under segments that assure the time-price priority; or carried out through an acquisition or exchange public offer authorised by the CNV; and
    • if conditions set forth above are not met, the Argentine individual would be subject to a 15 per cent income tax rate over the difference between the purchase value and the acquisition cost; and
  3. foreign shareholders, if the foreign shareholder is a resident of a cooperative jurisdiction5 and the funds come from a cooperative jurisdiction: (1) the foreign beneficiary would be exempted as long as the transfer is: a public offer placement authorised by the CNV; made on markets authorised by the CNV (such as MAE and ROFEX) under segments that assure the time-price priority; or is carried out through an acquisition or exchange public offer authorised by the CNV; and (2) if conditions set forth above are not met, the foreign beneficiary would be subject to a 15 per cent income tax rate, which the beneficiary can choose to apply over: a 90 per cent net presumed income (thus reaching an effective 13.5 per cent rate on the gross sale price); or the effective net income, (i.e., the gross sale price less the acquisition cost). If the foreign shareholder is a resident of a non-cooperative jurisdiction or the funds come from a non-cooperative jurisdiction, a 35 per cent income tax rate will apply over a 90 per cent net presumed income (thus reaching an effective 31.5 per cent rate on the gross sale price).

The tax treatment mentioned above may vary if the foreign shareholders are tax residents of a state that has a double tax treaty in force with Argentina.

On September 2018, through Decree No. 813/2018, the executive branch amended the VAT Regulatory Decree to adapt it to the last amendments introduced into the VAT Law by Law No. 27,346 and Law No. 27,430. It should be noted that according to the VAT Regulatory Decree, regarding services rendered in Argentina by foreigners, the suppliers, recipients and intermediaries will be considered Argentine residents if residence conditions set forth in income tax law are met or if they have a fixed place in Argentina. Regarding digital services that are exploited or used in Argentina and rendered by foreigners, the suppliers and intermediaries will be considered Argentine residents if residence conditions set forth in income tax law are met or if they have a fixed place in Argentina.

Stamp tax

A major concern, that is very relevant in financed acquisitions, is stamp tax. Stamp tax is a local tax applied individually by each jurisdiction to instruments that have some sort of economic value and are either executed in Argentina or have effects in Argentina. Since each local jurisdiction is in charge of the application in its own territory, this presents a challenge when a single transaction has effects in many jurisdictions, as the transaction may be taxed differently according to the jurisdiction at hand.

For example, in a transaction where funds are delivered to a company in jurisdiction X for the acquisition of assets in jurisdictions Y and Z, stamp tax may be applied by all these jurisdictions if, for example, the loan agreement is executed in X and there are pledges of assets executed in Y and Z jurisdictions. The stamp tax rate varies per jurisdiction but is usually between 1 and 1.5 per cent of the amount of the transaction that applies to said instrument.

There are certain exemptions and ways to mitigate this tax, for example, through the existence of special regulations that allow the consideration of payments (or exemptions) of stamp tax in other jurisdictions, or if the transaction is executed through a reversal letter mechanism. The latter is a contractual mechanism in which one party sends a written offer and establishes that it will be deemed accepted if the recipient performs a specific positive action (for example, payment or delivery of goods). This mechanism has been declared by courts as a legal contractual mechanism, and that stamp tax cannot be levied on it. However, there are certain limitations to this procedure as, for example, the mechanism for the registration of a pledge of assets in every jurisdiction sets forth the need to instrument the contract as a single agreement.

Income tax withholding

With regard to withholding tax, interest paid by Argentine companies to foreign banks or financial entities (1) under the supervision of the relevant central bank or similar governmental authority, and (2) located in: jurisdictions not listed as null or as low-tax jurisdictions by the Argentine tax authority; or jurisdictions that have signed exchange of information agreements with Argentina and have internal rules stipulating that no banking, stock market or other secrecy regulations can be applied against requests of information by Argentina's tax authorities, are subject to a 15.05 per cent withholding tax over gross payments (17.7163 per cent if the Argentine payer agrees to bear the withholding tax himself or herself).

Interest paid by Argentine companies for the import of movable assets (except automobiles) is also subject to a 15.05 per cent withholding tax over gross payments (17.7163 per cent if the Argentine payer agrees to bear the withholding tax himself or herself) provided that the loan was granted by the supplier.

In case of any other interest payment to foreign beneficiaries, a 35 per cent withholding tax rate applies over gross payments (53.8462 per cent if the Argentine payer agrees to bear the withholding tax himself or herself).

However, the tax treatment mentioned above may vary if the interest payment is made to tax residents of states that have a double tax treaty in force with Argentina. Finally, no withholding tax applies on principal repayments.

Debit and credit tax

This tax is levied on debits and credits in bank accounts held at Argentine financial institutions. Additionally, all transfers of funds are subject to this tax, when made using organised payment systems in lieu of those local accounts.

The general tax rate is 0.6 per cent for debits and 0.6 per cent for credits, and 1.2 per cent when the transfer of funds is made through organised payment systems in lieu of local accounts.

There are several exemptions applicable to finance transactions, including debits relating to time deposits, credits relating to loans granted by banks, and credits or debits relating to advances of discount operations. However, when structuring a transaction, this tax should be considered carefully, as it may increase transaction costs since it will affect the flow of funds to different accounts and is usually the source of complex negotiation by the parties searching for the most efficient structure.

III SECURITY AND GUARANTEES

The most common types of security are mortgages, pledges of shares, pledges of assets and security trusts (over assets or over debtor's cash flow). A mortgage is straightforward, with the underlying collateral usually being the real estate used by the acquired entity to carry out its business, as this will compromise its activities in case of default and thus provides an incentive for the debtor to repay. The pledge of assets is very similar, with creditors usually requiring that the underlying collateral be the assets utilised for production. The resale value in case of foreclosure of the asset pledge can be tricky, as many assets can be hard to sell.

Another security used by lenders in certain transactions has been an assignment into a security trust of the target cash flows (i.e., assignment of receivables). In recent years, the use of this vehicle has increased drastically, mainly owing to the excessive onerousness and complex executability of other types of securities. Under the security trust, the fiduciary title of certain assets (which can be any type of assets) is transferred to a trustee (who is to be determined by contract) so that he or she can liquidate these assets in order to satisfy a credit, subject to the occurrence of certain conditions, most commonly the default of the debtor.

Even though security trusts have been utilised in Argentina for many years, they were not expressly regulated until the last reform of the Argentine Civil and Commercial Code in August 2015. Prior to the enactment of this law, the National Supreme Court of Justice, in 2003, declared the security trust as valid. Nonetheless, the lack of express regulation generated a lot of discussion in the legal community over the scope of the security trust, primarily under scenarios of insolvency. Discussions have involved whether:

  1. a creditor would have to participate or not in a hypothetical bankruptcy or reorganisation proceeding of the debtor (since the assets are held in trust); or
  2. the need for a creditor guaranteed by a security trust to verify the credit under the bankruptcy or reorganisation proceeding of a debtor (as a creditor).

In this sense, there is case law going both ways. There are precedents setting forth that a creditor under a security trust does not have to verify this credit under the bankruptcy proceeding, and jurisprudence setting forth that the creditor must verify his or her credit and also that the liquidation of the assets under the security trust is subject to control by the intervening judge. Finally, within the latter, there is a dispute regarding if the creditor (beneficiary of the security trust) must request a verification of his or her credit as:

  1. common;
  2. common eventual; or
  3. preferred or privileged.

This classification is relevant to define the priority of the claim against the estate.

Also, there is certain case law in which the effects of a security trust over the debtor's cash flow was terminated for the sole reason that without said flow the debtor will not be able to reorganise without this cash flow. This will not happen with a pledge or a mortgage.

Regrettably, the Argentine Civil and Commercial Code regulated the security trust, but omitted to address the above-mentioned issues, so the discussion persists.

One important guaranty that lenders should always try to get is personal guaranties from the owners. This is not easy to obtain, but generally in a stress scenario personal guaranties are a good leverage tool to renegotiate terms.

IV PRIORITY OF CLAIMS

Priorities in an insolvency procedure depend on the very nature of the existing debt. Privileges are ruled only by the Argentine Bankruptcy Law (ABL) and are detailed between Articles 239 and 250 of the ABL. Below is a chart describing priorities of claims.

Type of credit Description Scope Detail of the assets over which the privilege can be exercised
Expenses reserve Expenses necessary for the bidding process of the bankruptcy assets (Article 244 ABL) Expenses Over the assets of the bidding
Special privilege Construction, improvement and conservation of a thing or asset (Article 241, Section 1) Principal of credit (Article 242 ABL) Over the thing, asset or subject of the improvement or construction (after paying 'expense reserve')
Credits for remuneration owed to an employee for six months, and those coming from severance payments, accidents, years of service or dismissal, lack of prior notice and the unemployment fund (Article 241, Section 2) Principal of credit plus interest for two years counting from the time of the due date (Article 242, Section 1 ABL) Over merchandise, raw materials and machinery that are property of the insolvent and are located in the establishment where services were rendered (after paying an 'expense reserve')
Taxes and fees applied over certain assets (Article 241, Section 3) Principal of credit Over certain assets (after paying an 'expense reserve')
Mortgage, security interest (Article 241, Section 4) Principal of credit plus costs and interests for two years prior to the bankruptcy and compensatory interests after the bankruptcy until effective payment (Article 242, Section 2 ABL) Over the assets granted as subject matter of the relevant mortgage (after paying 'expense reserve')
Debts owed to the withholder for withholding certain things (Article 241, Section 5) Principal of credit Over the retained thing (after paying an 'expense reserve')
Others (Article 241, Section 6), in other words, the Navigation Law or the Customs Code Principal of credit After paying an 'expense reserve'
Justice and conservation expenses All expenses derived from the conservation of the assets (Article 240 ABL) Expense Over all assets (after paying an 'expense reserve')
General labour privilege Credits for payments and family subsidies owed to workers for six months and those coming from severance, work-related accidents, years of service or dismissal, lack of prior notice, vacations, 13th salary, unemployment fund, and any other credit related to the employee–worker relationship (Article 246, Section 1 ABL) Principal of credit plus interests for two years from the due date and judicial expenses (if applicable) Over all assets (after paying an 'expense reserve', 'special privilege' and 'conservation expenses')
General privilege Payments owed to national, provincial or municipal social security organisms, family subsidies and unemployment fund (Article 246, Section 2) Principal of credit 50 per cent of all assets (after paying an 'expense reserve', 'special privilege', 'conservation expenses' and 'general labour privilege') (Article 247 ABL)
Taxes and fees owed to national, provincial or municipal tax organisms (Article 246(4)) Principal of credit 50 per cent of all assets (after paying an 'expense reserve', 'special privilege', 'conservation expenses' and 'general labour privilege') (Article 247 ABL)
Unsecured creditors All credit without privilege Capital and interests 50 per cent of all assets (after paying an 'expense reserve', 'special privilege', 'conservation expenses' and 'general labour privilege') (Article 247 ABL)
and
remaining assets (after paying the general privilege)

V JURISDICTION

i Choice of forum

The Civil and Commercial Code of Argentina allows the parties to an international agreement to select the jurisdiction of either an arbitration tribunal acting abroad or a foreign court, for the settlement of disputes that arise under such agreement. Furthermore, the courts of Argentina have exclusive jurisdiction over insolvency procedures related to debtors who are domiciled in Argentina. With regards to the right to be heard in court, the Constitution of Argentina grants unlimited access to all people, foreign or nationals to have their disputes resolved by a court of law. Argentine courts also recognise procedures of Argentine debtors that have taken place abroad as long as the foreign country recognises reciprocity.

ii Enforcement of arbitration awards and foreign judgments

As a general principle, Argentine courts will recognise both arbitration awards rendered abroad and foreign judgments.

In the absence of a treaty for the enforcement of foreign judgments, the National Code of Civil and Commercial Procedure will be applied to the enforcement of foreign judgments if the matter at hand is decided before a federal court or if the defendant is domiciled in the City of Buenos Aires. In matters decided before provincial courts, provincial procedural rules will apply. Argentine courts will enforce foreign judgments subject to the fulfilment of the following requirements:

  1. that the judgment was final and issued by a competent court of law, according to Argentine conflict of laws principles regarding jurisdiction;
  2. that the judgment was valid in accordance with the law of the jurisdiction where it was rendered;
  3. that the defendant was personally summoned and granted due process, in accordance with Argentine legislation;
  4. the judgment must not be in conflict with a prior or simultaneous judgment of an Argentine court; and
  5. the judgment must not be contrary to any of the public policy principles of Argentine law.

Regarding arbitration proceedings, domestic awards may be enforced as any domestic court's final decision (through summary enforcement proceedings).

As for foreign awards, international commercial arbitration is governed by the new International Commercial Arbitration Law, in force since August 2018, which mainly follows the guidelines of the UNCITRAL Model Law. Under the International Commercial Arbitration Law, an arbitral award, irrespective of the country in which it was made, shall be recognised as binding and, upon application in writing to the competent court, shall be enforced subject to the provisions of Sections 102 to 105.

However, recognition and enforcement of an arbitral award may be refused:

  1. at the request of the party against whom it is invoked, if that party furnishes to the court proof that: (1) a party to the arbitration agreement was under some incapacity, or the agreement is not valid; (2) the party against whom the award is invoked was not given proper notice or was otherwise unable to present his or her case; (3) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration; (4) the arbitral procedure was not in accordance with the agreement of the parties, or – failing agreement – was not in accordance with the law of the country where the arbitration took place; and (5) the award has not yet become binding or has been set aside or suspended; or
  2. if the court finds that: (1) the subject-matter of the dispute is not capable of settlement by arbitration under Argentine law (under Section 1651 of the National Civil and Commercial Code, civil status or capacity of persons, family matters, consumers cases, adhesion contracts and labour disputes cannot be submitted to arbitration); or (2) the recognition or enforcement of the award would be contrary to public policy under Argentine law.

Furthermore, with regard to arbitration awards, and subject to Section 1656 of the National Civil and Commercial Code, parties cannot waive their right to judicially challenge an arbitral award when it is contrary to Argentine law. However, courts have reasonably come to construe that the extent of the waiver applies only to arbitration awards that violate public policy, deny due process, resolve matters not submitted to arbitration, or the award is rendered out of the term agreed for its issuance.

VI ACQUISITIONS OF PUBLIC COMPANIES

Public takeovers and mergers are regulated by the CNV. It may also be necessary to obtain approval from additional governmental entities (for example, the Argentine Central Bank and the Anti-Trust Authority), depending on the circumstances and business activities of the company.

Before making a tender offer, it is common to obtain various agreements from the target's key shareholders. The terms of these agreements must comply with the target company's by-laws and applicable regulations. The parties must inform the CNV of the main terms of the agreement immediately after it is concluded.

Law No. 27,440, which amended the local capital markets' regulatory framework, also modified the tender offer mechanism. According to the new regime, there are some important modifications such as the ones detailed below.

The new regime defines three types of tender offerings: (1) the voluntary tender offer (Tender Offer Type I); (2) the 'strictly speaking' mandatory tender offer, that is the one triggered because of an offer that a subject performs pursuant to buy the total amount of outstanding shares of a company in order to take control of the target company (Tender Offer Type II); and (3) the other mandatory tender offers – the ones that are activated because of the referred Law and CNV regulations, excluding the ones that find legal groundings concerning the Tender Offer Type II (Tender Offer Type III).

The Tender Offer Type I may not aim to buy the total amount of outstanding shares of the target company and may not duly comply with the payment of an equal price per share for all the shareholders. However, in the case of the Tender Offer Type II, the offer to purchase must represent 100 per cent of the shares of the target company (notwithstanding that the percentage of the shares that are really bought at the end of the tender offer process would be less than the total amount of outstanding shares of the company) and must respect and equal price per share for all shareholders.

The new legal regime set forth in Law No. 27,440 specifies that the CNV determines that the control of the target company is achieved when:

  1. the offer scope, directly or indirectly, reaches a number of shares that represents a percentage of voting rights equal to or greater than 50 per cent of the target company, excluding from the calculation basis the shares that, directly or indirectly, belong to the target company; or
  2. the offeror achieves a number of shares that represents less than 50 per cent of the target company voting rights but acts as a controlling party, in accordance with the term defined in Law No. 27,440.

The new legal regime also states sanctions in the event that the offers do not respect the new regulatory framework.

Notwithstanding that Law No. 27,440 triggered the above-mentioned modifications, among others, to the Argentine tender offers regime, further administrative regulation has to be passed by the CNV (currently, there is a preliminary ongoing resolution – Resolution No. 742/2018).

According to the current CNV regulations, the CNV must consider the application within 15 business days of filing. This term can be extended if the CNV requires additional information. The authorisation is automatically granted if the CNV does not raise objections or ask for further information.

Tender offers are also mandatory in some cases. Under the ASL and the CNV rules, anyone seeking to obtain direct or indirect control of a public company by acquiring a 'significant interest' in the voting shares, pre-emptive rights, options, convertible notes or any similar securities that can give the right to own or buy shares, must file a public offering or a securities exchange addressed to the holders of these securities.

For indirect mergers or acquisitions (that is, a merger by incorporation or acquisition of a company which holds the shares of the target), if the company incorporated or acquired is a holding company or its principal assets are the shares of the target, the tender offer must be made in the same way as a direct acquisition of shares of the target. Otherwise, the mandatory tender offer is triggered only if the indirect merger or acquisition involves the acquisition of 51 per cent or more of the target company's shares, and is subject to specific provisions.

VII THE YEAR IN REVIEW

2018 has witnessed the enactment of the Productive Financing Law, which modified the normative framework that regulates the local capital market.

The main purpose of the Productive Financing Law was to align the Argentine capital market with those of the rest of the world, and to provide and create a favourable environment for investment in Argentina in order for the economy to grow sustainably.

Up to September 2018, this Law has accomplished its immediate purpose, and the capital market has regularised its operation.

However, owing to political, structural, internal and external issues, the economic performance has had a downturn and, even though regulation is favourable for investing, the recession and the inflation are generating caution regarding investment in the country among the business community.

Another relevant development in the M&A practice area in Argentina is the enactment of the new Argentine Antitrust Law 27,442 on 9 May 2018. Its main features are:

  1. the creation of an independent Competition Agency, an independent Competition Court (within the Agency) and a specialist Chamber of Appeals within the Civil and Commercial Court of Appeals;
  2. the inclusion of hardcore prohibitions (harm presumption): agreements that fix prices or quantities, divide markets or involve bid rigging, in addition to infringing the Act, shall be null and void;
  3. includes interlocking directories (in competitors) in the list of potential infringements;
  4. increases penalties for infringement and introduces new quantification criteria;
  5. includes leniency provisions;
  6. includes further regulation of civil claims, including civil fines;
  7. includes premerger control, a simplified procedure for transactions that raise no concerns and the obligation to pay a filing fee. It also introduces penalties for gun jumping;
  8. increases thresholds that trigger merger control;
  9. allows for (joint and several) liability of controlling entities if certain conditions are met; and
  10. includes a mechanism that allows the Competition Court to authorise certain agreements that may restrict competition.

Also, during 2018, capital gains tax entered in force. This disincentives investment in the country. Gains derived by a non-resident from the sale of shares of an Argentine corporation are subject to a 15 per cent tax, while the tax is set at 5 per cent for Argentine residents.

It is worth mentioning the development of the judicial case, informally known as the 'Notebook Scandal', where the investigation has unveiled the participation of multiple business people and members of the previous administration in bribes and corruption in order to be appointed adjudicators of administrative contracts. The case continues to have a huge impact on the economic and political aspects of the country. If confirmed, it would imply the existence of a corrupt system in force during 12 years of government.

Finally, the annual budget intended for 2019, is expected to include articles that will complete the reforms of 2016.

2018 has presented favourable conditions for economic growth and the attraction of investors worldwide. It is a year that can be considered as a turning point for the Argentine economy. Analysts expect the results of these efforts to be visible during the course of 2019.

VIII OUTLOOK

Among the various drafts of laws or administrative regulations that could affect the leverage of M&A activity under discussion, the following can be mentioned:

  1. CNV Resolution 742/2018, which will turn enforceable the stated new regime implemented by Law No. 27,440;
  2. the Asset Recovery Bill, which will facilitate the decommission of assets obtained illegally by means of corruption, narcotrafficking and money laundering. As of September 2018, the Asset Recovery Bill was approved by Argentina's Lower House of Congress. If enacted into law, it would provide for an autonomous judicial action in order to confiscate any assets or proceeds that are a product directly or indirectly of illicit activity.
  3. the Public Ethics Bill, which would effect several changes on the current system, and is aimed at preventing public officials from taking advantage of public office to make a profit personally or through family members; and
  4. the bill to amend the National Civil and Commercial Procedural Code and the National Civil and Commercial Code, which will modify aspects of the arbitration agreement, particularly, aspects related to precautionary measures, review of arbitration awards and optional clauses.

Footnotes

1 Tomás Allende is a partner at Estudio Beccar Varela. The author thanks Juan Francisco Oria and Juan Luchia Puig, who are associates, for helping to update this chapter.

2 TTR Blog made a report that shows that M&A activity for the first half of 2018 was US$2.551 million and 110 operations. This shows a decrease of 18.58 per cent in the amount and a decrease of 2.65 per cent in the number of operations in comparison with the same period of 2017. TTR Blog; 'Informe Trimestral Argentina 2T2018'; 2018. (Available at: https://blog.ttrecord.com/informe-trimestral-argentina-2t18/.)

3 Deals: Private equity funds Blackstone and Riverwood Capital acquired CPS Comunicaciones SA; Galeno Capital SAU acquired Compañía Financiera Argentina y de Cobranzas y de Servicios; ACON Bios Investors LP and Humus Capital Partners LLC acquired Biosidus SA; and Pan American Energy LLC has been merged with Axion Energy Argentina SA.

4 Pursuant to the CEPAL report 'La Inversión Extranjera Directa en América Latina y el Caribe 2018', during 2017 Argentina received US$11.517 billion from foreign investors, which represents an increase of 253 per cent in comparison with 2016. CEPAL; 'La Inversión Extranjera Directa en América Latina y el Caribe 2018'; Santiago, 2018. (Available at: https://repositorio.cepal.org/bitstream/handle/11362/43689/13/S1800684_es.pdf.)

5 Non-cooperative jurisdictions are countries or jurisdictions without exchange of information with Argentina (i.e., there is no exchange of information treaty or double tax treaty with a broad clause of exchange of information between this country and Argentina, or there is no effective exchange of information although this kind of treaty is in force. The list of 'non-cooperative countries' should be determined by the executive branch following such parameters (still pending for 2018). However, through Section 7 of Decree No. 279/2018 (published in the Official Gazette on 9 April 2018), the executive branch established that, until the list for 2018 is regulated, the list of 'cooperative countries' in force for 2017 must be considered (Available at: www.afip.gob.ar/jurisdiccionesCooperantes/#ver.)