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Regulatory Updates

Santiago Camacho and Dayana Brites


  • Uruguay amended its public procurement regime enhancing powers for the State Purchasing Regulatory Agency, and is developing an electronic platform for procurement monitoring. 
  • Sports Clubs amendments include eliminating limitations on shareholder contributions and composition of Board of Directors. Non-financial obligations related to reporting suspicious operations are introduced, aligning with anti-money laundering policies.
  • Changes to Competition Law modified Defense of Competition regulations, particularly economic concentration and thresholds for requesting authorization. 
  • Modifications in Consumer Relations included simplifying the process for consumers to terminate contracts within 60 days, and powers of the Directorate of Consumer Defense to impose sanctions for non-compliance.
Regulatory Updates
ElOjoTorpe via Getty Images

This Uruguay Ministry of Economy and Finance regulatory update takes into consideration the Act 20,212 on Accountability which approves the 2022 budget year. In said Act, changes were foreseen in different legal areas, some of which deserve our mention in this article.

I. Modifications to the current regime regarding public procurement.

The Act 20,212 incorporates in its Section III (“Financial Regulation”) various modifications to the Ordered Text of Financial Administration and Accounting (“TOCAF”). In this sense, articles 55 and 57 of the Act 20,212 replace articles 47 and 48 of the TOCAF that regulate the minimum content and elements that the standard specifications must contain according to the purpose of the contract and the type of procedure prepared by the Exec1utive power. In another way, article 60 adds new causes for public procurement, while article 68 adds as a power of the State Purchasing Regulatory Agency the development and maintenance of an electronic platform that allows the monitoring and control of the execution of the procurement carried out by the Administrations. State Public, proposing to the Executive Branch the technical guidelines for the purposes of their regulation.

II. Sports Clubs (Civil Associations and Sports Corporations).

Sports clubs organized as Sports Joint Stock Companies ("SAD") and those organized as Civil Associations are regulated by Act 17,292 of January 29, 2001, being a model commonly used today in the field of Uruguayan sports, acquiring special relevance in football.

According to article 70 of the aforementioned Act 17,292, SADs are subject to the general regime of public limited companies, with the particularities established in said law.

The Act 20,212 adjusts the references provided for in Law 17,292 to the “Registry of Sports Clubs of the Ministry of Sports and Youth”, replacing them with references to the “Registry of Sports Institutions of the National Secretariat of Sports” (a decentralized body dependent on the Presidency of the Republic, created by Act 19,331 of July 27, 2015)

Article 88 replaces the wording of article 72 of Act 17,292, eliminating the previous limitation that established that shareholder contributions must be met exclusively with money.

Article 89 incorporates two final paragraphs to article 73 of Act 17,292, modifying article 75 of Act 17,292 regarding the number of members that the SAD Board of Directors can have.

Article 95 of the Act 20,212 includes a non- financial obligation to report operations suspected of money laundering and terrorist financing (ROS).

In relation to this last point, it is important to highlight the additions of the Act 20,212 related to this social type, given that anti- laundering and anti-terrorist financing policies have acquired special relevance.

Article 95 of the Act 20,212 incorporates literal L) to article 13 of Act No. 19,574, including Companies as non-financial obligated subjects in matters of prevention against money laundering, financing of terrorism and proliferation of weapons of mass destruction.

Additionally, through the Act 20,212, article 52 Bis is added to Act No. 19,574, which regulates expanded confiscation. This new article provides that, in cases of conviction or abbreviated agreement for previous crimes of money laundering, the confiscation of money, property, assets or other profits of which the convicted person cannot justify the lawful origin will always be ordered. Likewise, the confiscation of those goods, products, instruments, funds, assets, resources or other economic means that are in the possession of the convicted person will also be ordered, even if the ownership falls on another natural or legal person who lends their name. In all those cases in which the convicted person cannot justify the lawful origin of the goods, products, instruments, funds, assets, resources or other economic means, it will be presumed that they are the product of profits or reuse of illicit activities.

From the preliminary investigation, the competent criminal court may, at the request of the Public Prosecutor's Office, in addition to those provided for in article 222 of the Code of Criminal Procedure, order the corresponding precautionary measures to secure the assets of the accused for the purposes of carrying out the confiscation extended to moment of sentencing.

Finally, article 109 of the Act 20,212 excludes from the obligation established in article 12 of Act No. 19,574, consisting of reporting unusual operations or those that occur without obvious economic or legal justification or that involve assets whose origin there are suspicions of illegality, to direct and indirect users of free zones that carry out only logistics and movement of merchandise activities provided for in Act No. 15,921, of December 17, 1987.

III. Introduction of changes to the Law on Defense of Competition, referring to acts of economic concentration.

The aforementioned Act 20,212 also introduced changes in matters of Defense of Competition, especially in relation to the minimum thresholds for requesting authorization from the Commission for the Defense of Competition of acts that imply economic concentration in the terms of the Act.

Specifically, the modifications established by the Accountability Act to the regulations for the defense of free competition are contained in the provisions of Arts. 191 and 192 of the standard. Likewise, changes are recorded regarding the application of the administrative procedure regulations contained in Decree 500/991.

Until 2019, with the entry into force of Act 19,833, our legislation established a regime for communicating acts of economic concentration and not for requesting authorization.

Under the previous wording, the need for authorization for acts of economic concentration was only established when it implied the formation of a de facto monopoly.

Act 19,833 introduced an important change to this regime of economic concentration operations, moving to a regime of prior authorization of said acts. Thus, it was established that it was mandatory to notify the enforcement body for its examination prior to the date of perfection of the act or the taking of control of any act of economic concentration in which the gross annual turnover of all the participants in the territory Uruguayan, in any of the last three accounting years, will exceed the threshold of 600,000,000 UI (approximately 89 million USD).

The article 192 of the Act 20,212 replaces the wording of art 7 of Act 18,159 in the wording given by art. 3 of Act 19,833 of September 20, 2019.

This new wording established as a condition that determines the obligation to obtain prior authorization from the implementing body so that the act of concentration can be carried out, that the following thresholds are cumulatively reached in any of the last three years:

That the annual tax-free turnover in Uruguayan territory of all participants in the operation is equal to or greater than 500,000,000 UI (five hundred million indexed units).

  • a. That the annual tax-free turnover in Uruguayan territory of two or more participants in the operation, considered individually, is equal to or greater than 30,000,000 UI (thirty million indexed units).”

Firstly, the billing that must be taken into account to know if the parameters established by law are reached becomes the “annual tax-free billing” and no longer the “gross annual billing” as in the previous wording, which means that taxes should no longer be considered in this calculation of annual billing, only the income of the group of participants without taxes being included.

Secondly, the billing amount within the Uruguayan territory of all participants is reduced from 600,000,000 UI (approximately 89 million USD) to 500,000,000 UI (approximately 74 million USD).

Thirdly, and in what results in the most significant modification, a second billing threshold is established, thereby establishing the existence of a “double threshold”. In this way, at least two or more participants in the economic concentration operation must individually reach a tax- free annual turnover threshold within the Uruguayan territory of at least 30,000,000 UI (approximately 4.5 million USD).

Thus, the request for authorization to the application body will become mandatory when both thresholds are met, that is, when the group of participants reaches a tax-free turnover of 500,000,000 UI in any of the last three accounting years and that two or more participants in the economic concentration operation individually considered reach an annual tax-free turnover of at least 30,000,000 UI.

Without prejudice to the foregoing, it is established below that when the threshold of the group of members is met, that is, the turnover of 500,000,000 UI, but the individual threshold of 30,000,000 UI is not met, it will be mandatory inform the enforcement body that the act of economic concentration is going to be carried out, which implies returning, at least at this point, to the communication model. In this case, the enforcement body may, by reasoned resolution, within 15 business days following receipt of the information, determine whether or not the act of concentration in question is subject to the authorization provided for in article 7 of Competition Defense Act.

The act does not establish the conditions and ways in which, in the event that the conditions mentioned in the previous paragraph are met and the implementing body has to be informed of the way in which the same should be done, delegating to the Executive Branch the regulation of the requirements and conditions that must be met to inform the application body.

In art. 191 of the Act 20,212 expands the referral established in article 29 of the Competition Law. The current wording of this provision established that “In everything not provided for in this law or in its regulatory decree, relating to the procedure for the investigation and sanction of prohibited practices, the solutions of Decree No. 500/991, of September 27, will be applied. of 1991, its amendments and concordances.”

The new wording establishes that "In everything not provided for in this Law, or in its regulatory decree, the provisions of Decree No. 500/991, of September 27, 1991, modifying and concordant, will apply", thus removing the reference to the “procedure for the investigation and sanction of prohibited practices.”

IV. Modifications introduced in matters of consumer relations.

The Act 20,212 provides in its article 185 for the replacement of literal I) of article 31 of Act No. 17,250, which provided within the list of abusive clauses those that “establish the automatic renewal of the contract without enabling the consumer to disassociate from it without responsibility. The consumer may, within sixty calendar days from the date on which the automatic renewal occurred, terminate or terminate the contract, and must notify the supplier with fifteen calendar days' notice."

Although in the current wording those clauses that established the automatic renewal of the contract without the consumer being able to withdraw without liability were already considered abusive, the Law introduced four modifications:

  • a. clauses that, even though they enable the consumer to withdraw from the contract, establish notification periods prior to automatic renewal;
  • b. eliminated the consumer's burden of communicating to the supplier the desire to terminate or resolve the contract with a 15 calendar day notice, and the consumer could always disengage within sixty calendar days from the date on which the automatic renewal occurred. without notice;
  • c. imposed on the supplier a period of 15 calendar days to process the cancellation if the consumer decided to terminate or resolve the contract within the period of 60 days;
  • d. expressly clarifies that the consumer has the right to terminate or resolve the contract within a period of 60 days after the renewal occurs, even in contracts that involve the payment of a social or affiliation fee.

Consequently, from the entry into force of the Act 20,212, whether or not a prior period has been provided in the contract for the consumer to express his/her will to non- renewal, the consumer may always communicate his/her will to terminate or resolve within 60 following calendar days and the supplier must process the cancellation within a period of 15 calendar days.

Regarding the powers of the Directorate of the Consumer Defense Area, article 186 of the Act adds a new paragraph to article 42 of Act No. 17,250, providing as one of the powers of the latter: I) Issuing instructions particular to suppliers, aimed at promoting consumer protection and avoiding future consumer conflicts. "The case of non- compliance will be sanctioned in accordance with the provisions of article 47 of this law." In this way, the Directorate of the Consumer Defense Area may issue instructions to suppliers, who must comply or, otherwise, they will be subject to sanctions.

Likewise, article 187 of the Act 20,212 replaces article 50 of Act No. 17,250, establishing a certain procedure for the imposition of the sanctions established in the law, which applies to both physical stores and electronic platforms. In this way, it provides that: “For the imposition of the sanctions established in this law, the following procedure will be followed: once the infraction is verified by the officials of the inspection service, a detailed report will be drawn up. If the verification is in the physical store, the record will be read to the person in charge of the establishment, who will sign it and receive a verbatim copy of it. For both checks in physical stores and on electronic platforms, the offender will have a period of ten business days to make his written defense and offer proof, which will be completed within a period of fifteen days, extendable when there is justified cause. Once the period of ten business days has expired without making any defense or completing the evidence where appropriate, a resolution will be issued.”

For its part, article 190 of the Act expands the powers of the Consumer Defense Unit, allowing the latter to publish on its website and disseminate nationally and internationally results of evaluations, analyzes and tests of nationally manufactured or imported products collected. by the National Directorate of Industries: “The Consumer Defense Unit of Section 05 “Ministry of Economy and Finance” is empowered to request the results of the conformity evaluations, analyzes and tests of nationally manufactured or imported products from the National Directorate of Industries of Section 08 Ministry of Industry, Energy and Mining”, for publication on its institutional website, as well as disseminating it to the members of the Safe Consumption and Health Network of the Organization of American States, on the System platform Inter-American Rapid Alerts of the same organization and to the States Parties and Associates of Mercosur.

Finally, with regard to commercial promotions, the Act 20,212 maintains the obligation to request authorization from the Consumer Defense Unit to carry out registrable commercial promotions, establishing that violation of said obligation will be punished with fines of between 10 UR and 1,000 UR, which will be graduated taking into account the recorded history, the market position of the offender and the seriousness of the non-compliance.

Previously, the penalty for failing to comply with said obligation was not regulated, so the general regime was applied consisting of a warning (in the event that the offender did not have a criminal record) or a fine ranging between 20 and 4,000 UR. With the modification provided for by the Law, the possibility of sanctioning with a warning in the case of failing to comply with the obligation to request authorization to carry out a registrable commercial promotion is eliminated, although the fines provided for are less high than those established in the general regime.