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On December 29, 2011, Law 26,737 establishing the Protection
System of Argentine Title to or Possesion of Rural Land became
effective. Its Regulatory Decree Nş 274/2012 was published in
the National Bulletin on February 29, 2012 (hereinafter,
altogether, the "RRL")
The enforcement authorities of the RRL created by Law 26,737 are
the following: (i) the Argentine Registry of Rural Land in the
ambit of the Ministry of Justice and Human Rights and formed by the
Argentine Ministry of Agriculture, Cattle Breeding and Fishing; and
(ii) the Inter-ministerial Council of Rural Land which shall be
chaired by the Ministry of Justice and Human Rights and formed by
the Ministry of Agriculture, Cattle Breeding and Fishing, the
Secretariat of Environment and Sustainable Development subordinate
to the President's Cabinet, the Ministry of Defense and the
Ministry of the Interior, with representatives of the
provinces.
Highlights of the RRL
As from the date of effectiveness of the RRL (i.e. December 29,
2011) the following provisions apply:
Foreign owners or holders of rural land, be they individuals or
legal entities, as they are described under the RRL, shall report
title to or possession of such land to the Argentine Registry of
Rural Land no later than August 27, 2012. In addition, any change
in the equity interests of the foreign legal entities must be
reported to the Argentine Registry of Rural Land within 30 days
following such act.
Any purchase, transfer, assignment of possession rights,
irrespective of the manner, name assigned by the parties and term
thereof, to be made in favor of foreign individuals or legal
entities shall have to be previously authorized by the Argentine
Registry of Rural Land.
The RRL provides for four limitations: (a) the limit on title
ownership or possession of rural land in the Argentine territory by
foreign persons is fixed at fifteen- percent; (b) such percentage
shall be calculated also on the territory of the province or
municipality (that is, 15% of rural land in a province or
municipality is the maximum extension of rural land in such
province or municipality that may be owned or possessed by foreign
persons); (c) in no case may persons of one same foreign
nationality exceed thirty percent (30%) of the percentage mentioned
above, that is, 15% and (d) the area of rural land belonging to one
same foreign owner may not exceed one thousand hectares (1,000 ha)
in the "core zone" (i.e. specific areas of the provinces
of Cordoba, Buenos Aires and Santa Fe) or equivalent areas as they
will be determined by the Inter-Ministerial Council of Rural Land.
Until such equivalence is determined, the limit of 1,000 hectares
applies to the entire Argentine territory.
Furthermore, foreign individuals or legal entities may not own
or possess pieces of property containing or adjoining large and
permanent bodies of water featured as large and permanent (such as
seas, rivers, streams, lakes, lagoons, wetlands, swamps, glaciers,
water-bearing formations, among others). The Inter-ministerial
Council of Rural Land shall determine the bodies of water that
conform to the above-mentioned definitions.
Should Argentine individuals or legal entities organized in
Argentina appear to pretend national ownership thus infringing the
RRL, such circumstance shall be considered an unlawful and
fraudulent simulation. Any legal acts carried out in violation of
the provisions of the RRL shall be absolutely, totally and forever
null and void, without the right to claim any compensation for the
persons that committed the illegal act or participated therein.
Infringement of the rules contained in the RRL shall give rise
to the following penalties: warning, fine and/or special
disqualification between 6 months and 2 years from filing
applications for permits. In case of fines on legal entities, same
shall be imposed jointly and severally on the entity and its
directors, managers, syndics, members of the supervisory committee,
administrators, attorneys or representatives who have been involved
in the punishable act.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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