INDUSTRIAL PROMOTION DECRETO No. 3.291 Institute a special regime for activities to be developed in the Complex Petrochemical Bahía Blanca.

Bs. As., 6/11/75

VISTO Decree-Law No. 19.334/71, Law No. 20.560 on Industrial Promotion and General Regulations No. 719 of 19 December 1973, and

CONSIDERING:

That article 10 of Decree Law No. 19.334/71 provides for the erection of a petrochemical complex in Bahía Blanca;

That the set of industrial plants to integrate the aforementioned Complex requires an intimate link between them, and therefore they must foresee similar promotional benefits to avoid affecting the economicity of the whole;

That article 1 of Act No. 20.560 in establishing the industrial promotion system provides that it shall be composed of such law, its general regulation and the regional, sectoral and special decrees issued;

That article 6 of the aforementioned legal provision determines in its first paragraph that the promotional regimes "shall be established as a result of this law by specific regulatory decrees of the same."

That Decree No. 719/73 in its article 3 provides that "the granting of promotional benefits that are not specifically covered by an industrial sector or a particular region shall be implemented by special decrees of promotion";

In view of the fact that the area in which the Petrochemical Complex Bahía Blanca is to be erected is not among those promoted from a regional point of view and that not all the products to be produced by the plants that belong to the complex are considered "petrochemicals" in the terms of Decree No. 592 of 10 December 1973 establishing the regime of promotion for such activity;

That, therefore, the promotion of activities to be carried out in the Complex Petrochemical Bahía Blanca must be implemented in a special decree;

It is appropriate for the purpose of not delaying the development of activities considered to be priorities to maintain the validity of the industrial projects that have been previously submitted and are in process;

Therefore,

THE PRESIDENT OF THE ARGENTINA NATION

RIGHT:

Article 1 . Introduce the present special regime for industrial promotion, regulation of Law No. 20.560 and in accordance with the guidelines set out in Decree No. 719 of 19 December 1973, for industrial activities to be carried out in the White Bay Oil Complex.

Art. 2o N For the purposes of the previous article determinate as the area of the Petrochemical Complex Bahía Blanca which corresponds to the land owned by Petroquímica Bahía Blanca S.A.I.C., constituted by the plots 1,566 to and 1,567 f, of the match of Bahía Blanca, Circumscription XIV - Rural section, understood between the following limits: to the Northwest, by the Avenida San Martín, boundary Southwest

Art. 3o El The Complex mentioned in Article 1 will be composed of the following plants:

(a) A low-density polyethylene production plant used as ethylene raw material produced by Petrochemical Bahía Blanca S.A.I.C.

(b) A high-density polyethylene production plant used as ethylene raw material produced by Petrochemical Bahía Blanca S.A.I.C.

(c) A monometer vinyl chloride production plant that uses as ethylene raw material produced by Petrochemical Bahía Blanca S.A.I.C.

(d) One or more vinyl polychloride production plants that use as the first matter monometer vinyl chloride produced by the plant mentioned in c).

(e) A chlorine and sodium hydroxide production plant in all its forms, up to a capacity to supply chlorine to the plant mentioned in c).

Art. 4o Las The plant-holders referred to in the previous article will be able to receive all the franchises and benefits that are determined below:

(a) Difference for nine (9) consecutive years to count on the first closed exercise from the start-up of the plant, the payment of the tax on profits and the tax on the added value . of which in the future replaced them derivados derived from the project promoted. For vinyl polychloride plants the deferment will be for seven (7) years.

(b) Differentiation for nine (9) consecutive years to count on the validity of the approval decree of the respective promotion contract, the payment of the tax on capitals and estates . that in the future replaced it. that proportionally corresponds to the goods applied to the promoted project. For vinyl polychloride plants the deferment will be for seven (7) years.

The cancellation of deferred amounts in accordance with subparagraphs (a) and (b) of this article shall be made in so many equal and consecutive annual contributions, without interest, as periods have been deferred from the first period following the last deferred.

(c) Exemption up to a maximum of ten (10) years of seal tax on company contracts and their extensions, including capital expansions and issuance of shares, provided that such acts respond to the economic purpose that was taken into consideration to agree on the promotion.

(d) Exemption of import duties and release from the income of the added value tax corresponding to the capital goods necessary to import for the fulfillment of the promoted projects.

(e) Medium- and long-term advances and loans with interest rates and preferential conditions. The Ministry of Economy will entrust the Central Bank of the Argentine Republic with the allocation of a special line of rediscount to the National Development Bank for the local financing of the projects promoted. For its part, the National Development Bank will grant the necessary guarantees to guarantee the credits obtained from abroad for the financing of the projects.

(f) The Secretary of State of Finance shall, with the support of the General Treasury of the Nation, guarantee the totality of the operations with the most their accessories, which the National Bank of Defrost in accordance with subparagraph (e) above. It is established that the National Development Bank will require, within the possibilities that permit the existence of subceptible assets of taxation, the creation of security rights that cover the operations granted.

(g) The implementing authority shall, in assessing each project, establish the benefits to be granted under article 3 (f), (g) and (h) of Act 20.560.

Art. 5o s Investors in companies whose projects are promoted, which are legal persons meet the conditions provided for in articles 16, subparagraph (b) and 17 of Act No. 20,560 and are not covered by any of the situations provided for in article 18 of the Act, or which are natural persons compliant with the requirement of article 16, paragraph (a), of the Act No. 20,560 provides for the following:

(a) Difference from the payment of the amounts to be paid in respect of income tax, capital and property tax and added value tax, including advances . of which in the future replaces them for periods with general maturity after the date of investment.

The investment will be considered as the subscribed capital is integrated or the direct contribution will be made within the time frames for each project by the Implementation Authority.

The total amount to be different will be up to fifty percent (50%) of the direct contribution of capital or in its case of the integrated amount of the social capital subscribed, and may be charged to any or all taxes indicated to the taxpayer's option, provided that the remaining fifty percent (50%) as a whole comes from genuine resources of the investors.

The Authority of Implementation, after consultation with the Directorate General Impositiva, shall determine the guarantees to be required to preserve the tax credit.

The amount of taxes entitled to deferred payment that had not been used in the fiscal year for the limitations that this Decree establishes in relation to the amount of the investment, shall be applied for its purposes in the following immediate year, and so on.

The respective investments should be kept in the assets of their owners for a period not less than five (5) years after the start of the plant. The Implementation Authority shall establish appropriate measures to monitor compliance with this obligation.

Deferred amounts will not be of interest and will be canceled in five (5) equal and consecutive annuities from the third closed period following the start-up of the plant;

(b) Deduction, for the purpose of calculating the tax on profits, of up to fifty percent (50%) of the amounts actually invested in the fiscal year, such as direct capital contributions or the integration of subscribed social capital, should be observed to this end the following requirements:

(1) The integration of capitals should be carried out within the deadlines provided by the Implementation Authority.

(2) The respective investments should be kept in the assets of their owners for a period not less than five (5) years after the start.

Art. 6th La The application authority may authorize investors in each promoted project to give full or part of the right to the enjoyment of the tax deferment referred to in subparagraph (a) of the previous article to their direct investors who meet the requirements established to enjoy such profit, provided that they are individualized and the deferred amount is exclusively intended for the promoted project, and provided that the remaining fifty per cent of the actual share of capital comes from its direct, The Implementation Authority will implement the mechanism to ensure compliance with this last requirement.

Art. 7o o In the event that in the future the monetary update of deferred taxes is established on a general basis, the same applies to the refunds of the deferrals provided for in articles 4 and 5 of this decree.

Art. 8o . In order to comply with the provisions of article 2 (e) of Act No. 20.560 (e), beneficiary companies shall include in their projects the measures necessary to preserve the environment and the appropriate living conditions, pollution and envilence to which persons and natural resources may be subject by industrial activity. The State Secretariat for Natural Resources and Human Environment will be responsible for verifying compliance with the standards set out in each promotional contract.

Art. 9th . Projects that conform to the provisions of this decree and which have been submitted prior to the validity of Act No. 20.560 may continue processing without another requirement than updating it.

Art. 10. El The Ministry of Economy will exercise the functions of authority for implementation through the State Secretariat for Industrial Development.

Art. 11. . For the plants defined in Article 3 of this decree will not be applicable the Nros Decrees. 592 of 10 December 1973 and 1792 of 11 June 1974.

Art. 12. . Communicate, publish, give to the National Directorate of the Official Register and archvese.

M. E. de PERON.

Antonio F. Cafiero.