Vanderbilt Journal of Transnational Law

First Page



Back in power after nearly twenty years of forced exile, the government of Juan Domingo Per6n fulfilled one of its most popularly acclaimed promises. Following a prolonged emotion-charged journey through the first Congress since the dissolution of that body in 1966, Argentina's new Foreign Investment Law (the "Law") became effective in December 1973. Law No. 20.577 regulates foreign direct investments, foreign credits and contracts involving payments abroad. Appearing almost simultaneously, Law No.20.575 requires registration with the government of all persons or entities who carry out any activity related to Argentina on behalf of foreign interests. The Foreign Investment Law was followed in February 1974 by a fundamental executive decree amplifying and interpreting the original statute.

The Argentines were primarily inspired by the pioneering innovations of Decision 24, the foreign investment code approved by the Commission of the Cartagena Agreement in December 1970 for application in the Andean Pact countries. The Argentine measures attempt to improve the Andean system and adapt it to a new environment. Many of the questions dealt with by the two political entities are considered vital by much of the capital-importing, non-industrial world and by investors from the developed countries as well. As a result, a study of the Argentine rules in relation to their Andean antecedents should transcend its geographical limitations. In the conclusion of an article examining the implications of Decision 24, Professor Covey T. Oliver prophetically observed that the "Mesozoic Era of direct foreign investment has ended. ...The future belongs to the adaptables and their lawyers." Further, he concludes that: "Decision 24 will undoubtedly be influential in this evolution, just as 'Mexicanization' [to which United States capital has accommodated itself] was itself influential in the formulation of the Andean Code. Decision 24, therefore, deserves the thoughtful attention of all those who are willing to face the future, instead of the past. . ."

Andean integrationist spokesmen recognized that "capital is the scarce factor in the subregion for which reason foreign contributions are essential for the fulfillment of ...our objectives." Introducing the Draft Foreign Investment Law to Congress, the Argentine President recognized "the advantages which the contribution of foreign capital can bring." Given the conviction that foreign investment has a role to play in the development process, it is hoped that this Article will prove useful to actual or potential foreign investors interested in Argentina.