Tagged: Argentina

EU files WTO complaint against Argentina

In the wake of last month’s spat over Argentina’s expropriation of Spanish energy holdings comes yet another economic dispute between Argentina and the EU.

On 25 May 2012, the EU filed a WTO complaint (DS438 Argentina–Measures Affecting the Importation of Goods) against Argentina regarding its import licensing rules. Argentina requires importers to obtain certain licenses before their goods can be put into circulation on the Argentinian market. The EU alleges that approval of these licenses “is being systematically delayed or refused by the Argentinian authorities on non-transparent grounds.”

Additionally, the EU alleges that Argentina “often requires” importers to agree to limit imports, balance them with exports, increase their local investments, control prices, not transfer benefits abroad, and/or meet local content requirements. The Argentinian authorities refuse to issue import licenses if these conditions are not met.

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What can the EU do about Argentina’s Expropriation of Spanish Investments?

Argentina made headlines last week with its plan to nationalize oil company YPF. The decision to expropriate 51% of the shares in YPF hydrocarbons corporation–eliminating the controlling stake of Spanish firm Repsol–was announced on 16 April, and was accompanied by a takeover of the company’s office by Argentine authorities.

In response, Repsol has announced its intent to pursue an expropriation claim, and Spain has taken retaliatory measures, seeking to restrict imports of biodiesel fuel from Argentina.

The EU has made clear its displeasure with Argentina and its intent to support Spain. But given that this is an investment case that legally falls primarily under the Spain-Argentina bilateral investment treaty (BIT), what role can the EU play?

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