The War of the Triple Alliance in which Argentina participated after Paraguay's invasion of the province of Corrientes (following the request of Solano López, then president of Paraguay, to cross Argentine territory and thus reach Brazil, which was denied by President Bartolomé Mitre) has had consequences with respect to the right of export, giving rise to debates on this tax to this day.
Let us remember that the National Constitution of 1860 set an expiration date for the so-called retentions (currently also known as retentions), setting the year 1866 for their end. This was expressly provided by the constituents, but due to the need for resources as a result of the war that began in 1865, the Mitre government required that the cessation of the export right be revoked. Thus, the National Constitution of 1866 was reformed and a tax was extended, which once put on the table of the different governments, has been used in order to obtain greater revenue in the face of continuous emergencies due to poor administrations.
current controversies
The Macri government imposed an export duty through Decree 793/18[I], setting a rate of 12%, with a limit of 3 and 4 pesos per US dollar. This device was maintained until December 2018, when it was ratified by Law 27.467[ii]. Its application is currently controversial; the vast majority of exporters have claimed the refund of what they paid from September to December 2018, considering that the Executive Branch of the Nation did not have the authority to apply a tax, even though the Customs Code in its article 755 may provide said Branch with the function of taxing exports for consumption with export duties. This, with a fundamental thread in the considerations and decisions already resolved by the Supreme Court of Justice in the Camaronera Patagónica case in 2014.[iii].
- Decree 793 / 2018
The Tax Court of the Nation, by plenary session of April 26, 2022, by a split but majority vote, considered that: "The Tax Court of the Nation cannot declare the unconstitutionality of a Law, in a specific case and in response to the claim made by an appellant. The Executive Branch may establish export duties, pursuant to the provisions of art. 755 of the Customs Code and, finally, that it is not appropriate to declare the invalidity of Decree 793/2018 in those cases in which the Tax Court must rule on resolutions issued by the General Directorate of Customs that deny the repetition of export duties paid by the exporter by application of the provisions of Decree 793/2018 regarding Export Destinations registered from 04/09/2018, the date on which the aforementioned Decree came into force, and until 04/12/2018, the date on which Law 27.467 came into force.”
For its part, the Justice is already deciding and there are rulings that address the claims made against this imposition during the period in which only President Macri's decree was in force. An example of this is the unanimous ruling of the Fifth Chamber of the Federal Administrative Litigation Court, in the case "Gut Metal SRL C/ EN-AFIP s/ Dirección General de Aduanas", exp 51458/2019, (s. 5/5/22), which as explained by Dr. Ana Julia Gottifredi[iv] Regarding this decision, it was resolved to declare the nullity of Decree No. 793/18 and its amendments and, consequently, to recognize the right of the plaintiff to obtain the reimbursement of the export duties paid without cause when formalizing the export clearances, which were collected by the customs service in accordance with the terms of Decree 793/18. Therefore, the appealed judgment is annulled.
Likewise, Dr. Gottifredi points out that the Chamber recalls that the a quo had rejected the claim of the taxpayer who demanded the repetition of the export duties paid by decree 793/18 because "it considered the doctrine emanating from the ruling of the Federal Court in the Camaronera Patagónica case to be inapplicable to the case at hand." In addition, it ruled - in brief - that Law No. 27.467 - not challenged by the plaintiff - had entailed the legislative validation of the export duties set forth in Decrees No. 793/2018 and No. 865/2018 (articles 81 and 82), and that in it the National Congress had established the essential elements of the customs tax involved - in particular, by setting margins for determining its rate. He clearly stated the deadlines for delegation (temporarily limiting it until December 31, 2020), as well as other aspects of enabling the instance.
- Export duty in 2022
The validity of the export duty that is being applied in 2022 is beginning to be debated, based on the estimation that this tax is not legitimized due to the fact that the budget law for 2022 has not been enacted. This would mean that those rates set in the Law (budget for 2021) would not support the possibility that the PEN currently applies them.
Without prejudice to the decision of the Tax Court discussed above, which in one of the points discussed decided that such Court does not have the authority to rule on the unconstitutionality of a regulation, it is interesting what was pointed out by its president, Dr. Miguel Licht, in the interview that Customs News The Court of Justice of the Republic of Venezuela, which will be held on March 2, 2022, stated: “It goes without saying that I could not give an opinion because it is a matter that may eventually reach the Court. However, I would not like to leave you without an answer and I will try to give it to you by making a merely academic description of the matter. For now, it is observed that there are two antagonistic views. Some jurists consider that the regulations established by the Executive Branch are executive, that is, regulations that support the law and are governed by article 99, section 2 of the National Constitution. These executive regulations, in principle, do not expire over time. The jurisprudence of the Court says that executive regulations, to the extent that they conform to the spirit of the law enacted, remain and have the same hierarchy as the law. The other view, on the other hand, considers that these are not executive regulations but delegated regulations, which are subject to Article 76 of the National Constitution in their validity. If we start from this position, we will find a delegating law that must comply with the requirements of Article 76 of the Constitution to pass the constitutional test. That is to say, that in order for delegating laws to be valid, they must comply with certain requirements: they must pertain to specific matters of administration or emergency, the powers must be granted for a certain period of time, and other formalities. Delegated regulations are a product of these delegating laws. Within them, we have two guidelines: one considers that delegated regulations have the nature of a legislative act and the provisions common to laws apply to them, so the delegated regulations will remain in time until another law expressly provides otherwise. Under this attitude, the delegated powers may well expire, but the product of these delegated powers will not disappear from the legal system. Another view holds that the fate of the delegated regulation is tied to the delegating law. Therefore, if the delegating law were to disappear from the legal world, the same would happen with the delegated regulation. The response will depend on the position in which the jurisprudence is to be framed.[v]
Although there is no express pronouncement from the Court to date, there is a presentation made by the Argentine Rural Society in February 2022 before the Federal Court of Córdoba, which is being processed in the Court in charge of Judge Ricardo Bustos Fierro. The claim has currently entered into a possible debate on jurisdiction since the AFIP/DGA filed an appeal before the Federal Court of Córdoba against the collective protection filed by the rural entity, which was declared inadmissible by the acting judge. From this, the AFIP/DGA filed an inhibitory action before the Federal Contentious Administrative Court of Capital Federal that fell to the Court of Dr. Enrique Alonso Regueira, who admitted the measure and declared himself competent to hear the case.[vi]This will surely generate a primary competition dispute and, once this is decided, it will be seen what the court decides regarding this transcendental issue of the application of the export right without the existence of a Budget Law for the year 2022.
Notwithstanding the considerations that will result from the ruling that the Court may issue in relation to this particular issue, both in the case of the Sociedad Rural Argentina and in others that may be filed, it is worth highlighting the ruling "Gut Metal SRL C/ EN-AFIP s/ Dirección General de Aduanas", Exp. 51458/2019, (s. 5/5/22)", without prejudice to the fact that in these proceedings, as we have indicated in previous points, it refers to Decree 793/18. It has been made clear that Law No. 27.467 had entailed the legislative validation of the export duties set out in Decrees No. 793/2018 and No. 865/2018 (Articles 81 and 82) and that in it the National Congress had established the essential elements of the customs tax involved - in particular, by setting margins for determining its rate -, clearly indicating the deadlines for the delegation (temporarily limiting it until December 31, 2020). It is argued that the imposition of the export duty in question is appropriate, following the precedents of the Supreme Court (on a question similar to that under consideration –Res. 11/02 issued by the then Ministry of Economy and Infrastructure as a delegated rule - which had taxed the export for consumption of certain goods with duties of 5% and 10%), the same decision, since there is no law that protects the charges.[vii].
A path is opened for a concrete analysis regarding the lack of Law in the imposition of withholdings for the 2022 cycle, since the rates have not been validated and the deadline that Congress granted to the PEN with respect to those transferred in 2020 for the 2021 period has expired.
The foundational nature of non-applicability
Wisely, the constitutionalists in 1860 knew how to consider that this tribute did not make national unity possible and, moreover, did not contribute to an urgent need for the development of the nation. Thus, the Pact of San José de Flores, in its article IX, provided: The current Customs Laws of Buenos Aires, free trade, will continue to govern until the National Congress, reviewing the customs tariffs of the Confederation and Buenos Aires, establishes the one that will govern all foreign Customs. In this framework, the Pact itself validated that Buenos Aires declared itself an integral part of the Argentine Confederation, and the incorporation was verified by the acceptance and solemn oath of the National Constitution.[viii]. “Within twenty days of the signing of this Agreement, a Convention will be convened to examine the Constitution of May 1853, in force in the other Argentine Provinces.[ix]The election of the members who will form the Convention will be made freely by the people and subject to the laws that currently govern in Buenos Aires.[X]If the Provincial Convention accepts the Constitution sanctioned in May 1853 and in force in the other Argentine Provinces, without finding anything to observe in it, Buenos Aires will solemnly swear it on the day and in the manner designated by the Provincial Convention.[xi].In the event that the Provincial Convention declares that it has to make reforms to the aforementioned Constitution, these reforms will be communicated to the National Government, so that once presented to the Federal Legislative Congress, it may decide to call an ad hoc Convention to take them into consideration, and to which the Province of Buenos Aires is obliged to send its deputies according to its population, having to abide by what this Convention, thus formed, definitively decides, preserving the integrity of the territory of Buenos Aires, which may not be divided without the consent of its legislature."[xii].
It is thus evident, based on the guidelines of the Pact itself for achieving unification, that it was necessary to introduce modifications to the National Constitution of 1853, with customs duties being one of the issues to be reviewed and reformulated. Indeed, while Buenos Aires insisted that customs duties be under the authority of the provinces, from the heart of the ideas of national unity, its defenders resisted such claims, considering it essential that such taxes be within the resources of the National State.
Finally, it was agreed that both export and import duties would be national taxes and therefore the National State would be responsible for collecting them. But with a transcendental clarification regarding the export duty: limiting its validity until 1866. Thus, in the National Constitution of 1860 itself, it was agreed and established to grant powers to the National Congress regarding setting the export duty until 1866, the year in which they would cease to be a national tax, not being able to be a provincial one. In short, the Constitution established the elimination of withholdings on exports.[xiii]
Considering this, we believe that the nature of the non-application of the export duty is foundational to the Argentine Republic and comes from the Pact of San José de Flores itself, which gave rise to the National Constitution of 1860. The reform introduced in 1866 should only be conceived as a transitory degree and, consequently, the export duty consists of a tax that should not be in force.
Conclusions
The export duty is a tax, a concept that we understand does not raise any debate despite considerations that may be presented by some commentators. The Court has made this clear in different rulings, and above all in Camaronera Patagónica[xiv], that such a concept has the character of a tribute. In this sense, the powers of its imposition must rest with the Congress of the Nation. In this case, the provisions arising from article 755[xv] in favor of the PEN can only be considered to the extent that there is an express law that imposes the rate with parameters for its determination by the PEN and that responds to a specific period of time, otherwise we would be faced with an attribution that is essentially illegitimate without, at least, such safeguards.
If in those times, when the current tax pressure did not exist, they knew how to decide to end it in the future, it is not understood today that it cannot be a tax that can be discarded. Even less, its use is allowed at the discretion of a Power such as the executive, in which only the obligation to clean up the reasons that always lead to falling into the state of its application should prevail, above any need. The export duty should not be seen as a remedy, but rather the opposite: one of the different causes that lead to the postponement of a serious task that ensures the scope of proper administration.
While the planet continues to advance towards agile, transparent, predictable and modern foreign trade, including customs in this progress, Argentina finds itself stuck in time, almost transported back to those days of 1865, when Mitre (without VAT, Income Tax or other current taxes) was against its proposal of 1860 and demanded to be able to maintain the export right in force. Today there is no military conflict, there is no limit on taxes; why, then, continue to debate the inappropriateness of a tax that is, from the founding conception of the Argentine Republic, impracticable. Especially when it does not strengthen productive development, limiting exports, the entry of foreign currency and the proposal of the true search for a proper administration in favor of society as a whole, which is in the national interest.
In the course of an assessment of the need to discard this type of tax forever, Justice should resolve the unconstitutionality of article 755 of the Customs Code, ratifying the tax powers of the National Congress, in order to avoid distortions in the use of a tax that, if it exists, must respond to a sensitive review in its application by those who have full tax power: only the Legislative Branch.
Guillermo Felipe Coronel is a lawyer specializing in Customs Law. Member of the Institute of Customs Law and International Trade of the Argentine Association of Constitutional Justice.
[I] Decree 793/18 (BO 04.09.2018/XNUMX/XNUMX).
[ii]Law 27.467 (BO04.12.2018) Budget law for the year 2021.
[iii]“Camaronera Patagónica SA v. Ministry of Economy and others s/amparo” and was signed by judges Ricardo Lorenzetti, Carlos Fayt, Juan Carlos Maqueda, Raúl Zaffaroni, Carmen Argibay and Enrique Petracchi – year 2014.
[iv]Dr. Ana Julia Gottifredi, note of 09.5.2022 – Mercojuris–
[v] Dr. Miguel Nathan Licht – Interview Customs News – Miguel Licht: “The new headquarters of the Tax Court indicates the transparency that we will give to management” -2.03.2022 –
[vi]La Nación – 19.05.2022/XNUMX/XNUMX – Withholdings: a CABA judge upheld a request by the AFIP and requested a case initiated by the Rural Tax Office.
[vii] Dr. Ana Julia Gottifredi, note of 09.5.2022 – Mercojuris –
[viii] Article 1 – Pact of San José de Flores – 10.11.1859.
[ix] Article 2 – Pact of San José de Flores – 10.11.1859.
[X] Article 3 – Pact of San José de Flores – 10.11.1859.
[xi] Article 4 – Pact of San José de Flores – 10.11.1859.
[xii] Article 5 – Pact of San José de Flores – 10.11.1859.
[xiii]Article 67, paragraph 1 CN 1860: To legislate on foreign customs and establish import duties, which, as well as the assessments on which they fall, will be uniform throughout the nation; it being understood that this, as well as the other national contributions, may be paid in the currency that is current in the respective provinces, by its fair equivalent. To also establish export duties until 1866, on which date they will cease to be a national tax, and may not be a provincial one. (in accordance with art. 67 paragraph 1 of the National Constitution of the Argentine Republic 1860).
[xiv] The vote of doctors Lorenzetti, Fayt and Maqueda indicated that withholdings are taxes and that, according to articles 4, 17 and 52 of the National Constitution, only the National Congress can create them. The ministers emphasized that this limitation is inherent to the representative and republican system of government and that no tax burden can be imposed on people if it has not been created by the Legislative Branch, the only branch of the State invested with such authority.
[xv]Article 755. – 1. Under the conditions provided for in this code and in the applicable laws, the Executive Branch may: a) tax with an export duty the export for consumption of merchandise that is not subject to this tax; b) exempt from the export duty the export for consumption of merchandise subject to this tax; and c) modify the established export duty (Part One).
The author is a lawyer and member of the Institute of Customs Law and International Trade of the Argentine Association of Constitutional Justice.
