On March 3, Resolution No. 221/2021 (hereinafter, the “Resolution”) was published in the Official Gazette of the Nation issued by the National Communications Agency (hereinafter “ENACOM”) was published in the Official Gazette of the Nation, approving, in Annex I, the Sanctions Regime applicable to Information and Communications Technology Services (hereinafter “ICTs”).
The Regime will apply to the determination and sanctioning of non-compliance with the obligations contained in Argentine Digital Law No. 27,078 and its regulatory and complementary regulations, with the National Communications Agency (hereinafter, “ENACOM”) being the enforcement authority.
Penalties
The acts and conduct mentioned in this regime shall be punishable, as well as those provided for in Law No. 27,078 and its regulatory and complementary provisions, insofar as they do not conflict with the provisions of this regime.
1) Warning: Failure to comply with the obligations established in Law No. 27,078 and its regulations and supplementary provisions may result in a warning being issued, in the case of an infringement that has not caused harm to customers, third parties, or the National Government.
2) Fine: shall be determined in “PBU-SBT” units, corresponding to the Universal Basic Benefit and mandatory for the Basic Telephone Service, applied in legal tender equivalent to the monthly value of that benefit at the time of actual payment.
The fine established may never be less than the benefit obtained by the person sanctioned or the loss suffered by the person affected by the infraction, and may not be less than the equivalent value of fifty (50) PBU-SBT; and up to fifty thousand (50,000) times the monthly value of the PBU-SBT.
In the event of repeated offenses or violations punishable by a fine, the amounts of the fine shall be doubled with respect to those applied for the previous offense, and may be set at up to a maximum amount equivalent to two hundred thousand (200,000) times the current monthly value of PBU-SBT.
The fine will also be graded considering (i) the economic loss incurred by all persons affected by the breach; and (ii) the excess income resulting from the breach.
In addition, ENACOM may apply fines for each day that the breach of the obligation persists.
All fines must be paid within twenty (20) business days of notification of the administrative act by which they were imposed, under penalty of enforcement.
Voluntary payment: ENACOM may stipulate that the fine be paid in full within ten (10) business days from the day following notification of the administrative act imposing it, which may be reduced by fifty percent of the total amount imposed, provided that it is not contested. In the event of voluntary payment, it shall not constitute valid grounds for calculating the recurrence of the offense.
3) Suspension of marketing: ENACOM may order, as an additional penalty, and for a maximum period of six (6) months, the suspension of the marketing of services and/or equipment in violation of the provisions of Law No. 27,078 and its regulatory and complementary rules, for non-compliance that causes serious and irreparable harm to customers or has a major social impact.
4) Closure: as an additional penalty, the closure of establishments where services and/or equipment are marketed in violation of the provisions of Law No. 27,078 and its regulatory and complementary rules may be imposed for non-compliance that causes serious and irreparable harm to customers or has a significant social impact.
5) Confiscation: as an additional or primary penalty, the equipment and materials used in violation of the licenses, permits, authorizations, approvals, or qualifications provided for in Law No. 27,078, its regulatory and complementary provisions, and in those cases in which the general communication routes are invaded or obstructed by any means, may be confiscated.
In such cases, the property, facilities, and equipment used in the commission of such violations shall be forfeited to the NATIONAL GOVERNMENT.
6) Expiration of the license: the license or service registration shall expire in the following specific cases:
a) Total interruption or failure to provide the registered services or that affects an area of service provision, or a significant number of users, within the terms and conditions established by the license and/or current regulations.
b) Failure to commence the provision of the registered service(s) in accordance with the terms and conditions established by the license and/or current regulations.
c) Repeated failure by licensees to pay fees, duties, and contributions.
d) Unauthorized transfer of licenses, shares, or membership fees of the licensee.
e) Repeated failure to pay fees, rights, and radio tariffs by holders of authorizations and permits.
e) Bankruptcy, dissolution, or liquidation of the licensee.
In these cases, fines will also be imposed as a penalty of fifty thousand (50,000) PBU-SBT in force at the time of payment of the fine for cases a. and b.; and twelve thousand five hundred (12,500) PBU-SBT in force at the time of payment of the fine for cases c., d., and e.; and revocation of the authorization or permit for cases e. and f.; and disqualification as an additional penalty.
7) Disqualification: as an additional penalty to the penalty of revocation, the licensee and the members of its governing bodies shall be disqualified for a period of five (5) years from holding licenses or being partners or administrators of a licensee company.
8) Revocation of authorization or permit: the authorization or permit for the use of radio spectrum frequencies shall be revoked, in accordance with the provisions of the current Radio Spectrum Administration and Control Regulations, in the following cases:
a) Repeated failure to pay radio fees, duties, and tariffs by holders of authorizations and permits.
b) Bankruptcy, dissolution, or liquidation of the licensee.
c) Unauthorized disposal of radio authorizations and permits.
9) Refund of amounts: ENACOM may order the immediate refund of amounts billed, deducted, or collected in favor of customers affected by breaches of current regulations, applying the same interest rates that licensees charge their customers or users in the event of late payment of bills.
In all cases provided for, except those in which ENACOM reasonably considers that the infringement cannot be remedied, prior to the declaration of penalties of expiry, revocation, fine or warning, the offender must first be given notice to remedy the infringement, granting a reasonable period of time for this purpose, which may not be less than ten (10) days.
The declaration of expiration shall not apply if the offender remedies the breach within the period set by ENACOM, which shall, however, evaluate the application of the other penalties provided for.
The application of sanctions shall be independent of the obligation to cease the infringing conduct, reimburse or compensate customers for unduly collected fees, prices, or charges, with adjustment and interest subject to the same interest rate that the offender applies to its customers for late payment of invoices, and to remedy the effects of the sanctioned conduct.
Other punishable conduct
1) Repeat offenses: A final administrative sanction shall constitute valid grounds for calculating repeat offenses. An offense shall be considered a repeat offense when a sanction has been imposed for the same offense within the last twenty-four (24) months.
2) Permanent offenses. In cases of permanent offenses, i.e., ongoing infringing conduct, ENACOM may file a new charge once the provider has been notified of the penalty imposed.
3) Provision of services without a license: this will result in the suspension of the provision and marketing of the infringing service and may be penalized with:
a) A fine of up to twelve thousand five hundred (12,500) times the monthly value of the PBU-SBT in force at the time of payment of the fine.
b) Closure of the establishment or establishments used for such marketing.
c) Seizure and subsequent confiscation of the equipment and materials used in the provision of the service.
4) Operation of radio stations without authorization: The operation of radio stations, media, and radio communication systems without the authorization of ENACOM may be punished with a fine of up to twelve thousand five hundred (12,500) times the monthly value of the PBU-SBT in effect at the time of payment of the fine.
When this offense is committed by a person who is not a licensee, the equipment and materials used in the operation may also be seized and subsequently confiscated.
5) Use of non-approved or non-certified equipment or materials: may be punished with:
a) A fine of up to four thousand (4,000) times the monthly value of the PBU-SBT in force at the time of payment of the fine.
b) Seizure and subsequent confiscation of non-approved equipment and materials.
c) Suspension, where applicable, of the marketing of the equipment in violation.
d) Closure, where applicable, of the establishment or establishments used for such marketing.
6) Violations relating to the Access and Interconnection and Access regime: Failure to comply with the obligations relating to the regime of access, interconnection, and sharing of passive infrastructure, established in Law No. 27,078 and its regulatory and complementary provisions, may be punished with a fine of up to thirty-five thousand (35,000) times the monthly value of the PBU-SBT in force at the time of payment of the fine.
7) Failure to comply with the obligations imposed on licensees with Significant Market Power and on entities covered by Article 95 of Law 27,078: Breaches related to the obligations established in Articles 46 and 95 of Law 27,078 and in its regulatory and complementary regulations may be punished with a fine of up to thirty-five thousand (35,000) times the monthly value of PBU-SBT.
8) Violations related to the principle of net neutrality: Non-compliance with the obligations and prohibitions established in Articles 56 and 57 of Law No. 27,078 and in its regulatory and complementary provisions may be punished with a fine of up to thirty-five thousand (35,000) times the monthly value of PBU-SBT in force at the time of payment of the fine.
9) Violation of customer rights and breach of provider obligations: The infringement of customer rights recognized in Law No. 27,078, in Resolution No. 733/ 2017 of the former Ministry of Modernization and in its regulatory and complementary regulations, and the breach of the obligations of providers established in those same regulations or imposed by ENACOM in accordance with its legal powers, may be punished with a warning or a fine of up to two thousand five hundred (2,500) times the monthly value of PBU-SBT in force at the time of payment of the fine.
10) Violation of the duty to maintain confidentiality and secrecy of communications: Failure to comply with the obligation to guarantee the confidentiality of transmitted messages and the secrecy of communications may be punished with a warning or a fine of up to seventeen thousand (17,000) times the monthly value of the PBU-SBT in force at the time of payment of the fine.
11) Violation of the duty to provide information: Failure to comply with the obligation to provide information requested by the Enforcement Authority, with the frequency and in the manner established, may be punished with a warning or a fine of up to two thousand five hundred (2,500) times the monthly value of the PBU-SBT in force at the time of payment of the fine.
This violation shall also be deemed to have occurred when there is a failure to comply with the duty to formally register providers in the applications and/or platforms provided by ENACOM for the fulfillment of information obligations.
12) Affidavits: Any inaccuracy, falsehood, or omission of an essential nature with respect to the information included in a Sworn Statement, or failure to submit to ENACOM the documentation required to prove compliance with the statement, may be punished with a warning or a fine of up to two thousand five hundred (2,500) times the monthly value of the PBU-SBT in effect at the time of payment of the fine.
Repeated failure to submit sworn statements will be punished with a warning or a fine of up to twelve thousand five hundred (12,500) times the monthly value of PBU-SBT in force at the time of payment of the fine.
Non-punishable conduct
Without prejudice to the obligation to restore or repair the service, non-compliance resulting from unforeseeable circumstances or force majeure shall not be punishable, provided that it is duly accredited and communicated to ENACOM within three (3) business days of its occurrence.
Grading of penalties
In addition, penalties imposed upon verification of a violation shall be graded taking into account the seriousness of the offense, the economic capacity of the offender, and the degree of impact on the public interest, considering, among other circumstances:
- The continuing nature of the offense subject to penalty.
- The impact on the service.
- The economic benefits obtained by the offender.
- The damage caused by the offense to users and third parties.
- The concealment or deliberate hiding of the offense through incorrect registrations, erroneous statements, and other similar means.
- The lack of approval or certification of the devices or equipment used.
- The offender’s history and repeat offenses, in general and in relation to their customers.
- The proportionality between the offense and the penalty.
- Failure to comply with a settlement agreement.
However, the following shall be considered mitigating circumstances to be taken into account in determining the severity of penalties:
- Having acknowledged, during the proceedings, the existence of the infringement.
- Having remedied the infringement on one’s own initiative or in response to a warning issued by ENACOM, under threat of sanction, and having fully compensated the affected party and/or third parties for any damages that may have been caused.
Procedure for the investigation and application of sanctions
(i) Cessation of the allegedly infringing activity prior to the initiation of the sanctioning procedure
By means of the corresponding administrative act, without the intervention of the alleged offender and without further proceedings, ENACOM may order, even before initiating the summary proceedings, the cessation of the alleged infringing activity.
This measure shall apply when there are reasons of urgent necessity based on the following circumstances:
a) Impact on the functioning of National Security, Civil Defense, and Emergency services.
b) Exposure to danger to human life.
c) Interference with other networks or services and those operating on frequencies used by the Aeronautical Radio Navigation Service and the Aeronautical Mobile Service.
If there are concurrent powers with another competent authority, the matter shall be referred to that authority after the precautionary measure has been implemented.
(ii) Precautionary measures in the sanctioning process
ENACOM, once the summary proceedings have been initiated and after giving the alleged offender two (2) days’ notice, may order the following measures:
a) The immediate cessation of unauthorized radio transmissions.
b) The immediate cessation of any other allegedly infringing activity that could cause irreparable harm to end users of the service or to third parties.
c) The sealing of equipment or facilities allegedly used to carry out the infringing conduct.
d) The seizure of equipment allegedly used to carry out the infringing conduct.
The precautionary measures that have been ordered shall cease to have effect when the measure that ends the sanctioning procedure is issued.
(iii) Summary proceedings
Procedure until notification of the sanction: For the purposes of conducting summary proceedings for violations of Law No. 27,078, its regulations, and complementary rules, the following procedure shall be followed prior to the sanction:
a) Formulation of charges with express mention of the rules violated, notifying the alleged perpetrator so that, within a period not exceeding ten (10) business days, they may duly prove their legal status and establish domicile within the Autonomous City of Buenos Aires, in the manner provided for in current regulations, and to make the relevant defense, providing evidence in support of their rights, as well as, where applicable, proving that the infringing conduct has ceased.
b) Once the aforementioned defense has been received, or in the event of silence on the part of the accused, prior to the issuance of the administrative act by ENACOM, the summary and the draft resolution shall be submitted to the permanent legal service, which shall determine the penalties to be applied as well as the obligations to be fulfilled, if applicable, for the intervention within its jurisdiction.
c) Once the above steps have been completed, the administrative act establishing the sanction against the accused shall be issued and, where appropriate, the deadline for compliance, as well as the obligations to be fulfilled, with the corresponding daily fines until such compliance is proven.
d) Where appropriate, the same administrative act that applies the sanction shall determine the manner and timing in which the sanctioned party must communicate it to the public.
Effects of appeals and actions and exhaustion of administrative remedies
The act by which the established sanction is applied shall exhaust the administrative remedy for the purposes of Article 23 of National Administrative Procedures Law 19,549, without prejudice to the admissibility of the appeal that the appellant may choose to file.
Once the administrative process has been exhausted, the appeal shall proceed in court in accordance with Article 4 of Law 27,078 and its amendments. Its filing shall not have suspensive effect, except in the case of the penalty of license revocation.
Given the optional nature of the appeal, in cases where such appeals are filed against fines imposed by ENACOM, proof of prior payment of the fine shall be a requirement for their admissibility.
Any appeal that does not comply with the requirement set forth in the preceding paragraph shall be declared inadmissible, and the penalty imposed shall remain in force and the administrative process shall be exhausted.
In cases where an appeal for reconsideration and/or an appeal has been filed, ENACOM shall notify the appellant to prove payment of the fine within fifteen (15) days of notification, under penalty of having the appeal withdrawn.
Once payment has been proven, the appeal shall continue to be processed.
Enforcement of fines
Once the deadlines for filing appeals have expired, and if non-payment of the fines imposed is confirmed, the competent Directorate shall issue the corresponding debt certificate for subsequent enforcement through ENACOM’s legal service.
Administrative appeals filed against the act by which the sanction is applied shall not have suspensive effect, except in the case of the sanction of license expiration.
Conciliation proceedings
ENACOM may summon the parties to conciliation hearings with the aim of reaching an agreement, which shall be approved provided that it involves a fair settlement of the rights of the parties, in accordance with the specific regulations.
It shall be an essential requirement for the approval of the agreement that it establishes a deadline for compliance. In the event of non-compliance, the corresponding sanction shall be applied to the offender.
*ENACOM shall issue the regulations for the procedure provided for in this article.
Publication of penalties
When social repercussions make it advisable to make them public, ENACOM may order the offender to carry out one or more of the following options regarding the publication of the penalties imposed:
a) The publication of the penalty in at least two (2) newspapers with wide national and/or local circulation;
b) The publication of the sanction on news websites to be defined;
c) Publication of the sanction in the sanctioned provider’s mass communication channels, such as institutional or commercial websites, social networks, or others;
d) Communication of the existence of the sanction in customer invoices.
ENACOM may also decide to publish the sanction on its institutional website.
In all matters not provided for in this Regime, National Law No. 19,549 on Administrative Procedures and its regulatory provisions shall apply.
This report cannot be considered as legal or any other type of advice from Allende & Brea.
