Cartel leniency in Argentina: overview

A Q&A guide to cartel leniency law in Argentina.

The Q&A gives a succinct overview of leniency and immunity, the applicable procedure and the regulatory authorities. In particular, it covers the conditions to be satisfied, the method of making an application, availability of immunity from civil fines to individuals, the scope of leniency, circumstances when leniency may be withdrawn, leniency plus, confidentiality and disclosure, and proposals for reform.

To compare answers across multiple jurisdictions visit the Cartel leniency Country Q&A tool.

This Q&A is part of the global guide to competition and cartel leniency. For a full list of jurisdictional Cartel Leniency Q&As visit www.practicallaw.com/leniency-guide.

For a full list of jurisdictional Competition Q&As, which provide a high level overview of merger control, restrictive agreements and practices, monopolies and abuse of market power, and joint ventures in multiple jurisdictions, visit www.practicallaw.com/mergercontrol-guide and www.practicallaw.com/restraintsoftrade-guide.

Contents

Regulation

1. What laws provide for a leniency programme and which regulatory authority administers it? Is there any published guidance?

Applicable laws and guidance

Argentine legislation does not provide for a leniency programme or policy in connection with cartel infringements or violations of competition laws or regulations. In December 2010, a draft bill introducing a leniency programme was submitted to the Executive Branch by regulators but it never became law in Argentina (see Question 18).

The main Argentine statute governing cartel infringements and competition violations is Act No. 25,156, as amended by Law 26,993 of September 2014, ("Act"), which grants authorities the right to settle a case under investigation before reaching an infringement decision (section 36, Act). In effect, parties subject to a competition violation investigation (including a cartel infringement investigation) can at any time before the authority issues a decision on the matter, request that the investigation procedure be suspended in exchange for agreeing to discontinue or to modify the conduct challenged by the National Competition Commission (Comisión Nacional de Defensa de la Competencia) (CNDC).

The CNDC and the Secretariat for the Defence of Competition and Consumers (Secretaría de Defensa de la Competencia y del Consumidor) must submit any settlement proposal to a new regulatory body (Autoridad de Aplicación) (AOA) (whose functions are as of today entrusted to the Secretary of Interior Commerce (Secretario de Comercio Interior del Ministerio de Economía y Finanzas Públicas) (SECOM)) before issuing a final decision on the settlement proposal. The investigation procedure is dismissed if the settlement is approved, subject to the investigated person not violating the Act within the following three years.

In practice, settlements affording dismissal of investigations have rarely been approved and those approved were related to minor offences causing no damage to the general economic interest. Typically, a settlement request is rejected when the infringement has been substantially consummated and its effects are irreversible.

Regulatory authority

Law 26,993 creates a new regulatory authority (Autoridad de Aplicación) (AOA) to replace the old National Competition Tribunal (whose members were never appointed). However, until now, the AOA has not been put in operation by the Executive Power (PEN) and its functions are currently performed by the SECOM, which is assisted by the National Competition Commission (Comisión Nacional de Defensa de la Competencia) (CNDC).

Therefore, until the new members of the authority are designated by the PEN, SECOM (acting as the AOA) and the CNDC are primary regulatory authorities on all competition law matters.

Both the CNDC and SECOM report to the Ministry of Economy and Public Finance (Ministro de Economía y Finanzas Públicas) and while the CNDC issues recommendations to the SECOM, the SECOM is the authority that ultimately decides the cases and imposes sanctions and fines in accordance with the provisions of the Act.

 

Scope of application

2. What infringements of competition law does the leniency programme cover?

Argentine regulations do not provide for a leniency programme. See Questions 1 and 18.

 

Recent cases

3. What notable recent cases have applied the leniency programme?

Argentine regulations do not provide for a leniency programme. See Questions 1 and 18.

 

Availability of leniency

Administrative liability

4. Is full immunity from administrative penalties available? What conditions must be met for immunity to be granted?

Argentine regulations do not provide for a leniency programme. See Questions 1 and 18.

 
5. Is there a sliding scale of available leniency from administrative penalties?

Argentine regulations do not provide for a leniency programme. See Questions 1 and 18.

 
6. Is immunity or leniency for administrative penalties available to individuals? If so, what conditions apply?

Argentine regulations do not provide for a leniency programme. See Questions 1 and 18.

 

Criminal liability

7. Is immunity or leniency available for companies and/or its employees in relation to criminal prosecution? What are the implications for employees when an undertaking has been granted immunity or leniency?

Circumstances

As a general rule, competition violations in Argentina are not criminally prosecuted as they are considered administrative violations. However, as an exception, the Argentine Criminal Code provides for a "price-fixing" felony in connection with cartel infringements, which can be punished with imprisonment of six months to two years (section 300(1), Act).

While immunity or leniency from criminal prosecution is not specifically granted to companies and/or its employees, and the authors have not found any precedent involving companies and/or employees in relation to criminal prosecution, it is conceivable that under certain circumstances, leniency from criminal prosecution may nonetheless be available. Specifically, in any case involving price-fixing, the individual subject to criminal prosecution would have the right to request the specific leniency contemplated in the Argentine Criminal Code (section 76bis, Argentine Criminal Code).

This leniency, also known in Argentina as probation, consists in the criminal prosecution being dismissed in exchange for an individual redressing, to the extent possible, the damage caused by his conduct. It is typically afforded to crime offenders for crimes punished with a maximum term of imprisonment of three years or less. This leniency is not specific to cartel infringements or competition violations and in the case of price-fixing it is only available for individuals (and not companies, which as a general rule are not subject to such felony).

Proceedings against employees

Employees or managers can be subject to criminal prosecution regardless of whether any administrative proceedings have been dismissed under section 36 of Act (see Question 1, Applicable laws and guidance).

Additionally, the applicable laws do not provide for any sort of connection between administrative proceedings (such as those provided in the Act) and criminal prosecution. Therefore, theoretically, it is possible that a company employee or manager is held criminally liable for price-fixing without such action being contested in an administrative proceeding under section 36 of the Act (see above, Circumstances).

Employees' interests

Contrary to other legal systems providing for leniency programmes or policies, no conflict of interests between a company's application for leniency, and the employees or managers is likely to arise in Argentina.

 

Application proceedings

8. When should an application for leniency be made?

Argentine regulations do not provide for a leniency programme. See Questions 1 and 18.

 
9. What are the procedural rules for leniency applications?

Relevant authority

Argentine regulations do not provide for a leniency programme. See Questions 1 and 18.

Applicant

See above, Relevant authority.

Informal/confidential guidance

See above, Relevant authority.

Form of application

See above, Relevant authority.

Markers

See above, Relevant authority.

Information/evidence

See above, Relevant authority.

Oral statements

See above, Relevant authority.

Short-form applications

Not applicable.

 
10. What are the applicable procedures and timetable?

Argentine regulations do not provide for a leniency programme. See Questions 1 and 18.

 

Withdrawal of leniency

11. In what circumstances and at what stage of the proceedings can leniency be withdrawn? What implications does the withdrawal of leniency from one company have for other applicants?

Argentine regulations do not provide for a leniency programme. See Questions 1 and 18.

 

Scope of protection

12. What is the scope of leniency protection after it has been granted?

Argentine regulations do not provide for a leniency programme. See Questions 1 and 18.

 
13. Does the competition authority offer any further reduction in fines for an undertaking's activities in one market if it is the first to disclose restrictive agreements and practices in another market (leniency plus)?

Argentine regulations do not provide for a leniency programme. See Questions 1 and 18.

 
14. Does the grant of leniency affect a third party's ability to bring a follow-on damages action against a leniency applicant?

Argentine regulations do not provide for a leniency programme. See Questions 1 and 18.

 

Confidentiality and disclosure

15. What are the rules relating to confidentiality during a leniency application?

Identity disclosure

Argentine regulations do not provide for a leniency programme. See Questions 1 and 18.

Information disclosure

See above, Identity disclosure.

Confidentiality requests

See above, Identity disclosure.

 
16. What are the rules concerning disclosure of statements made in support of a leniency application?

Domestic submissions and domestic discovery

Argentine regulations do not provide for a leniency programme. See Questions 1 and 18.

Domestic submissions and foreign discovery

See above, Domestic submissions and domestic discovery.

Foreign submissions and domestic discovery

See above, Domestic submissions and domestic discovery.

 

Inter-agency co-operation

17. Does the regulatory authority in your jurisdiction co-operate with regulatory authorities from other jurisdictions in relation to leniency? If so, what is the legal basis for and extent of co-operation?

Argentine regulations do not provide for a leniency programme. See Questions 1 and 18.

 

Proposals for reform

18. Are there any proposals for reform?

In December 2010, the CNDC annexed a draft bill to its resolution No. 157/2010. The draft bill proposed an amendment to the Act and the introduction of a leniency programme to be administered by the National Competition Tribunal (Tribunal Nacional de Defensa de la Competencia, which was never formed and was recently repealed by Act 26,993 which instituted the OAO).

The draft bill states that any person reporting alleged anti-competitive conduct or activity can request a non-prosecution or a reduction of up to 50% of the applicable fine or penalty, at the discretion of the judge and depending on whether an investigation has already commenced and the level of completion of that investigation. As of September 2014, this draft bill had not been passed by the legislature and whether this or any other bill admitting a leniency programme will be passed by the legislature remains to date uncertain.

 

Online resources

National Competition Commission (Comisión Nacional de Defensa de la Competencia) (CNDC)

W www.cndc.gov.ar

Description. This is the CNDC's official website. Most rulings, reports and updated information on the CNDC's activities are available in Spanish.

Ministry of Economy and Public Finance

W www.infoleg.gov.ar

Description. This is the official website of the Ministry of Economy and Public Finance. Laws, rules and regulations are available in Spanish.

Official Gazette

W www.boletinoficial.gov.ar/Inicio/Index.castle

Description. This is the official website of the Official Gazette.



The regulatory authority

The National Competition Commission (Comisión Nacional de Defensa de la Competencia) (CNDC)

Head. Ricardo A Napolitani, President

Contact details. Av Julio A Roca 651 4th Floor

Zip Code 1322
Ciudad Autónoma de Buenos Aires
Argentina
T +54 11 43493 480
+54 11 4097 4349 4104/4107
F +54 11 4349 4125
E cndc@secind.mecon.ar
W www.cndc.gov.ar

Outline structure. The CNDC is managed by a board comprising five members, one of which is appointed as President.

Responsibilities. The CNDC is empowered to:

  • Give recommendations and opinions on business concentrations and anti-competitive conduct (infringement).
  • Give recommendations and opinions on sanctions and fines to be applied under the Act.
  • Interpret the application of the rules under the Act.
  • Adopt internal rules, procedures and policies.
  • Issue non-binding opinions on competition law matters.
  • Enter into agreements with consumers' associations.

Procedure for obtaining documents. The most substantive recommendations and decisions made by the CNDC are available on its website. The website also contains relevant laws, regulations and general information on the CNDC.

Authority of Application (Autoridad de Aplicación (AOA)). Nowadays entrusted to the Secretary of Interior Commerce (Secretario de Comercio Interior del Ministerio de Economía y Finanzas Públicas) (SECOM)

Head. Augusto Costa, President

Contact details. Av Julio A Roca 651,
4th Floor,
Zip Code 1086,
Ciudad Autónoma de Buenos Aires,
Argentina
T +54 11 4349 3000
F +54 11 4349 4125
E cndc@secind.mecon.ar
Wwww.mecon.gov.ar/comerciointerior

Responsibilities. SECOM is empowered to (the list is not exhaustive):

  • Impose the sanctions contemplated in the Act.
  • Instruct for the performance of market studies.
  • Hold hearings with the parties involved in the transaction.
  • Instruct experts to gather relevant evidence for any investigation.
  • Control stocks, check the origin and costs of raw materials and other goods.
  • Promote research and investigation on competition matters.
  • Encourage solutions mutually agreed by the parties.


Contributor profiles

Cristian JP Mitrani, Partner

Mitrani Caballero Ojam & Ruiz Moreno

T +54 11 4590 8605
F +54 11 4590 8606
E cristian.mitrani@mcolex.com
W www.mcolex.com

Professional qualifications. Argentina, Lawyer, 1978

Areas of practice.Competition law; administrative law & business regulation; corporate law; corporate compliance and white collar crime.

Languages. Spanish, English, French, Italian

Professional associations/memberships. Member of the Chartered Institute of Arbitrators, the International Centre for Dispute Resolution (ICDR), the International Bar Association (IBA), and associate member of the American Bar Association (ABA).

María Teresa Recondo, Partner

Mitrani Caballero Ojam & Ruiz Moreno

T +54 11 4590 8631
F +54 11 4590 8601
E maria.recondo@mcolex.com
W www.mcolex.com

Professional qualifications. Argentina, Lawyer, 1995

Areas of practice. Corporate law (cross-border transactions) and competition law.

Languages. Spanish, English

Soledad Vallejos Meana, Senior Associate

Mitrani Caballero Ojam & Ruiz Moreno

T +54 11 4590 8636
F +54 11 4590 8601
E soledad.vallejos.meana@mcolex.com
W www.mcolex.com

Professional qualifications. Argentina, Lawyer, 2001

Areas of practice.Administrative and business regulation; competition law; white collar crime and international arbitration.

Languages. Spanish, English, French

María Paula Díaz, Senior Associate

Mitrani Caballero Ojam & Ruiz Moreno

T +54 11 4590 8617
F +54 11 4590 8601
E maria.paula.diaz@mcolex.com
W www.mcolex.com

Professional qualifications. Argentina, Lawyer, 2005

Areas of practice. Corporate law (cross-border transactions); competition law; corporate compliance and white collar crime.

Languages. Spanish, English


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