Key Benefits:
LEY 12.987
PLAN SIDERURGICO ARGENTINO
CHAPTER I
ARTICLE 1. - Approve the Argentine Siderurgical Plan that gave rise to Decree 8.078, dated 21 March 1946, the following purposes:
(a) To produce steel in the country, using Argentine and foreign minerals and fuels, in the proportion that is economically more advantageous and in order to keep the national sources of minerals and fuels active, to the extent appropriate to maintain the respective technique in efficient conditions;
(b) Provide the national processing and finished industry, high quality steel, at prices that approximate as much as possible to those that govern in the most important foreign production centers
(c) Promote the installation of steel processing and finishing plants that meet the requirements of the highest degree of technical perfection;
(d) Ensure the evolution and further strengthening of the Argentine steel industry.
ARTICLE 2. - The Argentine Siderurgical Plan will be developed on the basis of the following industrial units:
(a) The deposits of iron in exploitation and steel plants of the State currently in operation and those of the same species that in the future exploit or establish;
(b) The industrial establishments of the Sociedad Mixta Siderurgia Argentina, whose constitution is approved by this Law, and whose main purpose will be the production of arrabio and the production of steel in semi-finished products for the national processing and finishing industry;
(c) Industrial establishments of other mixed companies that are created for the transformation or termination of steel products;
(d) The processing and finishing plants of steel products, dependent on the private capital that meet the requirements established by this law and its regulation, regarding the promotion and consolidation of the Argentine steel industry.
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ARTICLE 3o. - The direct action of the State in the processing and finishing industry will be carried out in the development of steel products for national defence and also for public services, or when the circumstances of Article 5 of Law 12,709 occur.
ARTICLE 4. The economic and general technical advice of the Argentine steel plan will correspond to the General Directorate of Military Manufactures. The proposals made by this agency will be consulted with the Argentine Institute for the Promotion of Exchange; considered by the ministries concerned and resolved by decrees that in all cases will be dictated with the intervention of the departments of War and Finance.
CHAPTER II
Sociedad Mixta Siderurgia Argentina
Article 5. Approve the constitution of the Argentine Mixed Society, composed of the State General Directorate of Military Manufacturing under the powers conferred upon it by article 7 of the law 12,709 and by the steel industry signatories of the records of 19 January and 22 February 1946; as well as the statutes thereof, with the modifications resulting from this law.
They will also participate as shareholders of the private capital, in the same conditions as the steel industry signatories of the above-mentioned records, those who subscribe the actions that are publicly offered, in accordance with the provisions of Article 7 of this Law.
The main object of the mixed society will be the production of arrabio and semi-finished steel elements in the quantities required to meet the needs of the country and, eventually, for export.
ARTICLE 6 The Executive Power, ad referendum of the Honorable Congress, may authorize the modification of the statutes of the Argentine Joint Society in the conditions and opportunity it deems appropriate, maintaining its fundamental guidelines in accordance with the requirements of this law.
ARTICLE 7o. The authorized social capital is set in the sum of one hundred million pesos national currency ($ 100,000.000), represented by eight thousand shares (8,000) of ten thousand pesos national currency ($ 10,000) each, of category A, corresponding to the contribution of the State, and two thousand shares (2,000) of ten thousand pesos national currency ($ 10,000) each, of category B, corresponding to the private contribution.
In all the emissions of shares of category B for the social capital authorized in this article, 50 per cent (50 per cent) will be offered to the signatory industrialists of the minutes of January 19 and February 22, 1946, who adhere to the amendments introduced by this law in the statutes of the mixed society. The other fifty percent (50 percent) will be offered to public subscription. The first series of this issue will be offered within sixty days (60) of the promulgation of this law.
The executive branch may authorize the increase in share capital of the mixed society up to fifty percent (50 percent), if necessary as a result of a higher cost of the facilities initially projected or if it is essential to expand the latter for greater production or for new complementary facilities. In this case, the new actions will be offered to the public subscription, with ten million pesos national currency ($ 10,000.000) the first series, which will be guaranteed an annual interest of four percent (4 %).
For the purpose of voting in assemblies, each action in category A shall confer the right to ten votes, and each action in category B shall be one vote; in all cases, without other limitations than those set out in article 350 of the Trade Code.
All shareholders of the joint society shall be natural or legal persons of Argentine nationality and not covered by the prohibition set out in article 8a of the law 12,709.
For the purposes of this law, it is considered Argentine nationality to the legal persons constituted in the country and whose capital belongs to Argentine citizens in proportion not less than eighty percent (80 %), demanding the same requirements in the composition of its directory. It may not be accepted as a shareholder any entity that is a subsidiary of a foreign company or is controlled by foreign companies, groups or interests.
If a legal person is fully or partially composed of others, each legal person shall be required to meet the same requirements.
It is exempt from the requirements that refer to the quality of Argentines of the natural or legal persons, the steel companies and the steel industry signatories of the minutes of January 19 and February 22, 1946, that adhere to the modifications introduced by this law in the statutes of the Mixta society, being limited to the share of each one of the entities or industrial steel companies.
8th. - The State, at any time, may offer to the public subscription the shares of category A, up to the limit of forty-nine percent (49 percent) of the subscribed capital of society. To this end, it will set on each occasion the basis of the offer according to the results of the last balance and the economic factors that occur circumstantially. The remaining fifty-one per cent (51 per cent) cannot be transferred to private capital in any case.
The actions of category A, subject to the planned operation, will be cancelled, giving in its replacement its nominal equivalent in actions of category B.
ARTICLE 9o-The president and in his absence any of the directors appointed by the executive branch with the agreement of the Senate may veto the resolutions of the assemblies or of the directory of the mixed society that are contrary to the law or the statutes, or that may compromise the superior conveniences of the nation.
In all cases, the veto shall be founded and processed before the executive branch through the General Directorate of Military Manufacturing, for the purposes provided for by law 12.161; the one to be issued before thirty days; after that period without a pronouncement, the veto shall be invalid.
When the veto is based on the violation of the law or the social statutes, the shareholders of the private capital may resort to justice, the final ruling.
ARTICLE 10. - Mixed society shall permanently form and maintain a stock of domestic and foreign raw materials for the production of two and six months, respectively.
ARTICLE 11. - The installations of the Argentine Mixed Society should be planned for an initial production of more than 300,000 tons per year of semi-finished elements of high-quality steel and will be prepared, in addition, to enable rapid progressive growth that responds to the most advanced technical progress, harmonizing its future development for an annual production not less than one million tons.
ARTICLE 12. - The installations of the Sociedad Mixta Siderurgia Argentina must be able to function with sufficiently acceptable performance; using exclusively Argentine iron ore. In addition, and for mobilization purposes, the joint society will facilitate the experimentation of other national raw materials.
ARTICLE 13. - The Argentine Mixed Society shall consume a minimum of 10 % of national iron ore or its root equivalent for its production on an annual basis.
origin, during the term established in article 23 of this Law.
article 14. - The Argentine Mixed Society may have its own port and lift the facilities that require its operation, being exempt for thirty years from any tax, except for the payment of the corresponding remuneration to services provided by the State or municipalities.
The fees applied by the Mixed Society in the field of dock, screenwriter and other port operations, must previously be subject to the approval of the Executive Power, in no event being able to exceed the rates established for the ports in charge of the Nation, nor to produce profits for the Mixed Society Siderurgia Argentina, to which effect, and in its case, it will return to the Nation the resulting differences.
ARTICLE 15. - It is declared of public utility and subject to expropriation or servitude the properties and accesses and road and railway connections that are necessary for the operation of the industrial plants of the Sociedad Mixta Siderurgia Argentina.
ARTICLE 16. - Approve the agreement on preparatory work for the constitution of the Argentine Mixed Society signed on 19 January 1946 by the members of the same and Armco Argentina S. A. subject to the clause of termination established and the rejection authorized in the statutes approved by this Law.
ARTICLE 17. - The annual production of the Sociedad Mixta Siderurgia Argentina will be distributed freely among the plants of transformation and completion installed in the country.
When the demand for purchase exceeds the production of the Sociedad Mixta Siderurgia Argentina, the deliveries will be assessed in relation to the real capacity of the plants of transformation and according to the possibilities of consumption of the Nation.
In the event that buyers of semi-finished steel elements were not fully or partially installed at the time of their advance orders will be taken into account
Similarly, if there is sufficient assurance that they may be used on the appropriate occasion.
ARTICLE 18. From the end of the first year of operation of the plants of the Mixed Society Siderurgia Argentina, the industrial companies of transformation and finished, whose facilities are not in a position to justify technically and economically the stimulus action advocated by this Law, will not be taken into account in the assessment of distribution of production in case of insufficient quantity available.
ARTICLE 19. - The Executive Power may exceptionally authorize the Argentine Mixed Society to complete the needs of the national demand, by importing any of the elements for which it is manufactured and which temporarily cannot or should not be produced in the country. The sale prices of these products shall be established as far as possible with the same criterion prescribed in this law for those of national origin.
CHAPTER III
Financial economic system
ARTICLE 20. - The sale price of the different semi-finished steel products produced by the Sociedad Mixta Siderurgia Argentina will be set quarterly by the executive branch, at the same time with the price of the products of similar characteristics in the most important foreign production centers, with a tolerance, in more, of 5 %; in order to provide the national processing industry and finished a product of high quality in the same conditions in which the same industry receives it in the countries of export.
ARTICLE 21. - The basic cost price of the different semi-finished steel products produced by the Sociedad Mixta Siderurgia Argentina will be determined quarterly by adding the integral price of production two national currency pesos ($ 2.00) for each ton of produced steel and arrabe issued directly for the promotion of the obtaining of iron minerals, minerals necessary for its industrial exploitation and Argentine fuels.
ARTICLE 22. - The State guarantees the annual interest of 4 % exclusively:
(a) To the first two thousand (2,000) shares of category B referred to in article 7a of the
present law;
(b) To the first series of ten million pesos national currency ($ 10,000.000) in the case of
the increase in equity provided for in Article 7a.
To this end, it will pay the compensatory or supplementary amounts appropriate when the annual exercises of society do not yield profits. or when these do not reach such a percentage, no amount can be anticipated as warranty.
During the first 15 years of the operation of the Argentine Mixed Society, which exceeds 6 % of dividend will not be distributed among shareholders, but destined to constitute a reserve for the purposes of society, especially for the expansion of capital.
After the 15 years indicated, all that exceeds the 10 percent dividend will have the same purpose.
Note 3 (three) % and 2 (two) %, as the maximum limit of surplus dividends to constitute reserves, the sale price must be adjusted, when the exploitation results exceed 9 and 12 % respectively for two consecutive periods
ARTICLE 23. - The State shall take up to a period of twenty years to count on the initiation of the operation of the plants of the Argentine Joint Siderurgia Society, of the deficit, if any, between the sale price and the cost price of the products it produces, determined according to this law, as well as the interest of the 4 % guaranteed to the actions listed in points (a) and (b) of this law.
When products that have enjoyed the benefit set out in this article are exported, the price difference with which they have benefited must be refunded to the state.
ARTICLE 24. - From the end of the first year of operation of the plants of the Mixed Society Siderurgia Argentina, the processing and finishing companies that are not installed in a position to justify technically and economically the action of encouragement and promotion set forth in this law will not enjoy the products that are delivered to them of the benefit agreed in the preceding article.
ARTICLE 25. -The amount of eighty million pesos national currency ($ 80,000.000) as a contribution of the State to the formation of the capital of the Mixed Society Argentina. The integration of capital will be carried out by annual quotas through the corresponding issuance of public debt securities in sufficient quantity to cover the contribution of the State or through the Argentine Institute for the Promotion of Exchange. Fifty-one percent of the share capital will be computed as a contribution of the General Directorate of Military Manufacturing and will be accounted for as part of the funds provided for in the implementation of the law of its creation (12,709).
ARTICLE 26. - The executive branch is authorized to finance the development of the Argentine Siderurgical Plan through the Argentine Institute for the Promotion of Exchange in cases and opportunities in which the interests of the Nation are best suited.
The Argentine Institute for the Promotion of the Exchange will participate in the negotiation of imports and potential emerging exports of compliance with that plan; in the recruitment of specialized labour and of the elements that are necessary to ensure and promote the development of production capacity to the maximum provided for in Article 11 of this Law, as well as, in general, in all that it can contribute to the technological advancement of the steel industry.
ARTICLE 27. - Annually, the General Directorate of Military Manufacturing shall make the budget of all the expenses that demand the State the execution of the Argentine Siderurgical Plan, as well as the respective revenues, and shall submit it to the approval of the Executive.
The corresponding annual allocations will be grouped according to the following investments:
(a) Contribution of share capital;
(b) Difference between the cost and sale prices of the semi-finished steel elements produced by the Argentine Joint Siderurgia Society, and compensatory differences to production directly by the State;
(c) Amortization and maintenance of existing steel plants as at 31 December 1945, which should be retained for reasons of mobilization. For this investment group the total is limited to five million pesos national currency ($5,000.000) for a period of ten years;
(d) Reserving national raw materials that are the result of the exploitation of own deposits and the operation of the high furnaces and other experimental facilities of the State; as well as the reservation of foreign raw materials. For this group, together, it is limited to sixty million pesos national currency ($ 60,000.000) the total to invest in the period of fifteen years.
(e) Other essential supplementary costs.
CHAPTER IV
Supplementary provisions
ARTICLE 28. -Apply to the Executive Branch to authorize the General Directorate of Military Manufacturing to invest up to a total of 80 million pesos national currency
($ 80,000.000) for the integration of joint processing and finished steel companies, with the same imputation as that set out in Article 25 of this Law.
The State shall maintain in all cases fifty-one percent (51 percent) as a minimum share in the total share capital of each of these mixed societies.
ARTICLE 29. - Please refer to the Executive Branch to apply additional customs fees to the import of arrabe and semi-termined and finished steel products, to the extent that it is convenient to ensure the purposes of the Argentine Siderurgical Plan; with the limitations set out in the Customs Act, especially in the transition period until they begin
the installations of the Sociedad Mixta Siderurgia Argentina.
ARTICLE 30. - Machinery, accessories and spare parts, as well as raw materials, fuels, materials and products that are imported for the steel plants installed or that are installed under the conditions specified in the plan approved by Article 1 of this Law, shall be exempt from the payment of customs duties and shall enjoy preferential consideration in the change.
ARTICLE 31. - Determine of public utility and subject to expropriation or servitude, all the properties that are necessary for the rational and economic development of the Argentine Siderúrgico Plan, and in particular for the operation of those plants that should be in connection with those of the Sociedad Mixta Siderurgia Argentina.
ARTICLE 32. - Wastes, fragments, cuts and other iron wastes and alloys in any of their forms are declared public; they may be expropriated by the General Directorate of Military Manufactures for the state's plants, those of the Argentine Joint Society and other steel plants that require it.
The possessors of more than three tons of "old iron" under the conditions expressed are required to make the affidavit of their stocks periodically to the Industry and Trade secretariat. Offences to this provision shall be punishable by a fine of five hundred to ten thousand national currency, within the regime established by law 12.830 and 12.833
ARTICLE 33. -The Executive Power will determine which steel semi-finished product installations existing in the country as at 31 December 1945 or which part of them will be able to maintain its capacity and efficiency for a maximum period of ten years as a reserve of the plants that will be erected by the Argentine Joint Siderurgia Society; both to compensate for the eventual paralysis of those of the latter, as well as to complement their production in case of emergency.
The industrialists who consider that they possess facilities under the conditions expressed may seek the benefits set out in article 27 (c) of this Act and shall be registered in the register to which the Secretariat of Industry and Commerce shall bear. They will not be taken into account to agree on the same facilities that have already had a strong amortization, which will be considered exclusively in their maintenance.
ARTICLE 34. - Industrial entities wishing to avail themselves of the benefits set out in this Act shall request it, upon registration in the special registry by the Ministry of Industry and Trade, which shall include, with the intervention of the General Directorate of Military Manufacturing, all necessary technical and economic backgrounds to inform the relevant rights; as well as the evolution of the facilities in service.
ARTICLE 35. - Default all provisions of other Laws that oppose this.
ARTICLE 36. - Contact the Executive.
Given in the meeting room of the Congress of the Argentine Congress in Buenos Aires, 13 June 1947.
J. HORTENSIO QUIJANO. RICARDO C. GUARDO. Alberto H. Reales. Rafael V. González. Secretary of the Senate. Secretary of the DD C.