Argentina: Two Significant Judicial Decisions Concerning Financial And Foreign Exchange Proceedings

Last Updated: 9 August 2012
Article by Roberto E. Silva, Jr. and Gabriel E. Melegari

A plenary from the Federal Court of Appeals and a judgment from the Argentine Supreme Court referred to the guarantee of trial within a reasonable period of time and its extension to all kinds of proceedings of a punitive nature.

On May 9, 2012, a majority vote of the Federal Court of Appeals in Administrative Litigation, in plenary session, in re "Navarrine, Roberto Hector et al. v. BCRA - Res. 208/05", concluded that Law No. 21,526 provides specific sanctions, which include express provisions concerning prescription (statute of limitations), that preempt the prescription regime of the Criminal Code. Since Article 42 of such law specifically regulates that matter with regard to offenses included within the Law, and taking into account the particularities of administrative law sanctions which disciplines an activity seeking the economic-financial common good and the optimal provision of these services, the prescription provisions of the Criminal Code do not apply. In this way, it was considered that the opening of the evidence period, the end of the such period, the call to produce evidence and their respective notices –such as acts and formalities inherent in the approach of the case, once opened by resolution of the competent authority-, interrupt the prescription period for punitive action under Article 42 of Law No. 21,526, as amended by Law No. 24,144.

In the case under analysis, approximately 22 years had passed since the commission of the act and the beginning of the administrative process until the issuance of the resolution which imposed administrative sanctions. Despite this, it was considered that the acts and proceedings completed during the investigative stage were suitable to interrupt the prescription period established by Law No. 21,526 without prejudice of the final delay due to the successive interruptions of the prescription almost always on the edge of the prescription period. Notwithstanding the foregoing, the Court of Appeals acknowledged that the governing authority should modify such a means of proceeding, given that the situation described constituted a reprehensible violation of the principles of celerity, economy and effectiveness that must govern administrative activity, clarifying that such attitude could involve, in the exercise of disciplinary powers, a decline in the guarantee of defense on trial (unless undue delays arise from the conduct of the defendants), in the event of possible revocation of sanctions, and consequent inability to repair the specific damage that this delay would cause.

In contrast, on June 26, 2012, the Supreme Court of Justice (the "Supreme Court") concluded, in re "Losicer, Jorge Alberto et al. v. BCRA - Res 169/05 (File 105666/86 - Sum. No. 708)"- that an unreasonable delay in the administrative proceedings is incompatible with the right to due process under Article 18 of the Argentine Constitution and Article 8 of the American Convention on Human Rights ("ACHR"). Those guarantees are applicable to the administrative proceedings initiated by the Central Bank of Argentina Republic ("BCRA"), even though the sanctions applied for itself have been characterized by Supreme Court case law as disciplinary rather than criminal ("Fallos": 275:265, 281:211, among others), for example in re "Baena Ricardo et al. v. Panamá", judgment dated 2 February 2001, the Inter-American Court of Human Rights -support in precedents of the European Court-, asserted that justice done through due legal process must be guaranteed in any disciplinary process, and States can not avoid this obligation by arguing that the guarantees of Article 8 of the ACHR do not apply in the case of disciplinary sanctions –not criminal– since admitting this interpretation "would leave to its free will the implementation or not of the right of everyone to due process".

In this case, on the contrary, although the prescription period never lapsed because of interruptions that occurred during various stages of the administrative proceedings, which lasted approximately 18 years from the occurrence of the alleged infractions detected, and after 15 years of the opening of the proceedings, until the imposition of administrative fines, the Supreme Court concluded there was an incompatibility between the unreasonable delay of the administrative proceedings and the right to due process protected by rules of higher hierarchy to Law No. 21,526.

To evaluate the unreasonableness of the period spent in the case under review, the Supreme Court took into consideration the lack of complexity of the matter under process and that the main reason for the delays were lapses of inactivity attributable to BCRA, without interference to the course of procedure by the defendants.

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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