VETO

Decree 1395/96

Note the Bill registered under No. 24,726.

Bs.As., 3/12/96

VISTO Draft Law No. 24,726 sanctioned by the HONORABLE CONGRESS OF NATION dated 30 October 1996 and

CONSIDERING:

That the HONORABLE CONGRESO DE LA NATION has sanctioned the Bill of Law quoted in the Visto, which establishes the regime applicable to the denomination of origin of wines of superior or fine quality in the ARGENTINA REPUBLIC.

That Article 1 of the aforementioned Project provides: "The denomination of origin of wines of superior or fine quality, in the ARGENTINA REPUBLIC, shall be governed by the provisions of this law."

That this classification excludes other types of wines recognized by Law No. 14.878 known as the General Wine Law, which without being of superior quality are equally deserving of legal protection.

Article 3 states: "It is understood by product originating from an area to that wine of recognized fame and originality".

That the obligation to prove the "recognized fame" of a product so that it is considered to originate from an area, is an ambiguous concept that prevents the entry of those products, which, although unknown yet in the market, bring together the characteristics of quality and originality required.

That Article 7 of the project stipulates: "The proposal to adopt a particular denomination of origin may arise from the individual or collective initiative of the viticultors and vinicultors..."

That international experience indicates that the establishment of a denomination of origin must require the consent of a high percentage of producers in the area concerned, in order to avoid the use of the mechanism to displace competitors or appropriate the economic benefit of an expression already recognized in the medium.

That Article 8 of the Draft Law provides that producers seeking recognition of a denomination of origin must constitute a Promotion Council in order to draft a draft internal regulation of the denomination of origin and the technical studies and reports to be carried out.

That the proposed Promotion Council is empowered to move or prevent the entry of new producers, as the duty to incorporate any producer wishing to enter it has not been contemplated. This creates a corporate figure that controls the income of the product and violates the anti-monopoly principle that governs the current commercial practice.

That Article 8 in subparagraphs (a) (a1) provides for the necessary technical studies and reports.

The cumulus of requirements is excessive and the costs of the system are high; these are the ones that are the ones that are the ones that the Authority of Application has established.

That Article 14 of the Bill establishes the minimum content required by the Governing Councils in respect of their internal regulations. Articles 27, 28 and 30 also determine the integration, legal organization, and resources to be available.

In the case of private organizations, their integration, legal organization and resources result in issues beyond the intervention of the National State and where the will of the parties should prevail.

That Article 34 of the Bill creates the Provincial Council for the Denomination of Origin, composed of UN (1) representative and UN (1) alternate representing each Governing Council, plus UN (1) representative of the appropriate ministry, in the opinion of the respective Provincial Government. This council will develop activities of promotion and control within its jurisdiction.

That in the framework of deregulation carried out by the current NATIONAL GOVERNMENT, it is up to the administrative simplification of any created regime or to be created. In this order of things the creation of bodies whose functions are bureaucratic is not justified, overlap with those granted to the Designation of Origin Councils and raise the costs of the start-up and operation of the system.

That Articles 40 and 41 create the National Council for the Denomination of Origin as a decentralized entity of the NATIONAL PUBLIC ADMINISTRATION, with economic and financial autarchy in order to carry out the advice, monitoring, verification, promotion and defense of the system. The legal address and seat of its headquarters will be in the city of Mendoza, Province of Mendoza.

That existing within the NATIONAL PUBLIC ADMINISTRATION agencies with specific competences in the field should use the structures already created to operationalize the proposed regime.

That in the context of the simplification efforts carried out by the so-called State Reform, the creation of new entities does not conform to the austerity principles adopted by the NATIONAL GOVERNMENT.

That Article 56 stipulates: in the event that a trademark is accepted as an origin denomination, it shall be necessary for the entry into force to extinguish the right of ownership of the trademark. If this extinction does not occur before the National Directorate of Industrial Property will not proceed to renew its registration, once the communication of acceptance of the denomination of origin has been received.

That the Trademarks Act No. 22,362 grants the trademark holder property rights under Article 17 of the NATIONAL CONSTITUTION.

That those who intend to use as a denomination of origin a trademark will benefit from the added value that the brand has acquired. On the contrary, the owners of the brand will be harmed by a real confiscation of their property, as no compensation is provided for the loss caused.

That the aforementioned Article 17 of the NATIONAL CONSTITUTION expressly prohibits the confiscation of property, which is why it is inappropriate to establish the non-renewal of its registration for reasons other than those already established by the Trademarks Act.

That such mechanisms, and those already mentioned in the comments to Articles 7° and 8° affect the principles of competition and transparency of the markets that NATIONAL GOVERNMENT has promoted over the past few years through the process of structural reforms of the economy.

That in the merits of the above reasons it is appropriate to observe in its entirety the Draft Law sanctioned under No. 24,726.

That the present measure is determined in the use of the powers conferred by Article 83 of the NATIONAL CONSTITUTION.

Therefore,

THE PRESIDENT OF THE ARGENTINA NATION

RIGHT:

Article 1 - Note the Bill registered under No. 24,726.

Art. 2° - Return to the HONORABLE CONGRESS of NATION the Bill of Law cited in the previous article.

Art. 3° - Contact, post, give to the National Directorate of the Official Register and archvese. - MENEM. - Jorge A. Rodriguez. - José A. Caro Figueroa.