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General product obligations
What are the basic laws governing the safety requirements that products must meet?
In Argentina, product safety is regulated by several federal and local agencies. Overlapping authority among agencies may occur with respect to a particular product. Given the diversity of products and agencies regulating product safety, this chapter focuses on the four main agencies: the Consumer Protection Agency (CPA); the Domestic Trade Secretariat (DTS); the Drug, Food and Medical Technology, National Administration (ANMAT); and the Industry and Commerce Secretariat. The primary product safety regulations are:
- the Consumer Protection Law (CPL), as implemented by Executive Decree 1798/94, applies to any and all products sold to consumers. The CPL embodies (among other rules) legal principles applicable to consumers’ safe use and consumption of products;
- the Argentine Food Code, which contains a broad range of rules applicable to food and beverages, including meat, dairy products, alcoholic beverages, soft drinks, dietary products and additives, among others;
- the Drug Law, which regulates the production, apportioning, import, export, storage and marketing of drugs, medical products and any product intended for medical treatment;
- the Civil and Commercial Code recently enacted, which contains general liability rules, including the obligation to prevent or aggravate any damage; and
- Resolution 808-E/2017 of the Domestic Trade Secretariat (Secretaria de Comercio) which incorporates to local regulation Resolution No. 4, passed on 6 April 2017 by MERCOSUR. This resolution contains the procedure set to alert and withdraw from local markets products and services considered potentially harmful or dangerous to the consumer.
Many other regulations have been issued by agencies with jurisdiction over certain products, such as the Ministry of Agriculture and the Ministry of Health, all of them governing the product safety of particular products.
What requirements exist for the traceability of products to facilitate recalls?
There are no specific regulations or requirements regarding the traceability of products for recall purposes. However, with regard to certain products, such as medicines, the applicable rules require the convenient storage of testing lots. Likewise, ANMAT recommends that drug manufacturers keep records of raw materials, parts providers and clients. ANMAT also requires local distributors and manufacturers of specific products to be part of the Medicine Traceability National System, which allows local authorities to detect any anomalies in the legal distribution of such particular products and helps in the recall process.
What penalties may be imposed for non-compliance with these laws?
The CPL provides for penalties applicable to suppliers who violate consumers’ rights, including the right to safe consumption. These penalties include fines of up to 5 million pesos, seizure of products, closure for up to 30 days, being banned from providing products to the government for up to five years and loss of government benefits. Other rules authorise ANMAT, and most of the government agencies overseeing particular products, to seize products under their jurisdiction and apply fines. Agency-imposed penalties are administrative and can be challenged before higher authorities and the courts, or both. Criminal prosecution may also apply.
Reporting requirements for defective products
What requirements are there to notify government authorities (or other bodies) of defects discovered in products, or known incidents of personal injury or property damage?
Resolution 808-E/2017 DTS contains the rules governing the notification of products to government authorities. Such resolution provides that suppliers must notify the competent administrative authority and the CPA upon learning that a product is potentially dangerous to consumers. As different rules govern specific products and enable several government agencies to act, those rules may or may not contain notification provisions. For instance, ANMAT regulations require that suppliers inform the ANMAT authorities about voluntary recalls. Other agencies have not enacted notification rules for products under their jurisdiction.
Notification criteria and time limits
What criteria apply for determining when a matter requires notification and what are the time limits for notification?
Reporting obligations begin upon suppliers’ awareness of the risks that a product poses to consumers’ and users’ safety. In general terms, the CPL requires immediate notification both to the competent administrative authorities and consumers. Resolution 808-E/2017 DTS requires immediate notification both to the competent administrative authorities and the CPA. More specific regulations, such as those enabling ANMAT’s activity, require immediate communication of a voluntary recall and give 72 hours for the filing of a full recall implementation plan with ANMAT.
To which authority should notification be sent? Does this vary according to the product in question?
The particular authority to which notification should be sent depends on the specific products in question. Note that overlapping authority among government agencies may occur. At a federal level, safety issues related to consumer products should be notified to the CPA. ANMAT should be notified when it comes to food, medical devices, drugs and cosmetics. Motor vehicle suppliers should notify the Domestic Trade Secretariat and farm products suppliers should report to the Department of Agriculture.
What product information and other data should be provided in the notification to the competent authority?
Each regulatory agency has its own requirements about what information manufacturers should provide, which depends on the type of product. Resolution 808-E/2017 DTS indicates that suppliers should report:
- information on the supplier issuing the recall (eg, name of the company, core business activity, fiscal identification, legal domicile, contact phone number, name of a contact person responsible for the recall process, equal information on local suppliers in MERCOSUR region, etc);
- product description including but not limited to the product name, brand, type, size, number of products included in the recall, lot numbers, serial number, manufacture date, expiry date, country from which the product was imported and manufactured, countries the product was exported to, pictures;
- region in which the product was sold;
- information on any significant incident involving the product, including judicial cases;
- description of the defect, identified risks of using the product;
- notification already provided to other agencies;
- actions already taken;
- press communications plan;
- recall plan or strategy; and
- destination of products when recalled.
Obligations to provide updates
What obligations are there to provide authorities with updated information about risks, or respond to their enquiries?
In order to ensure the adequate completion of recalls, most agencies require companies to file reports on the status of the recall and updates regarding safety issues. For example, ANMAT requires manufacturers to file weekly reports with relevant information about the implementation of recall actions, including any alerts addressed to consumers or the press, number of products already recovered, among others. Resolution 808-E/2017 DTS indicates that an update report should be filed at least every 60 days, and a final report should be filed with the results of the recall.
What are the penalties for failure to comply with reporting obligations?
See question 3.
Is commercially sensitive information that has been notified to the authorities protected from public disclosure?
Although trade and industrial secrets are protected, the right of manufacturers and distributors should be balanced with the consumers’ right to detailed information on product risks. Hence, whether to seal or disclose sensitive information could be decided by the competent agency on a case-by-case basis. As in conflicting situations a government agency may be inclined to prioritise consumers’ rights, manufacturers should not take it for granted that their sensitive information will be protected.
Use of information in prosecution
May information notified to the authorities be used in a criminal prosecution?
Effective prosecution stands as a priority when it comes to suspected criminal activities. Therefore, manufacturers should assume that the information they provide to government agencies may be used in a criminal investigation.
Product recall requirements
What criteria apply for determining when a matter requires a product recall or other corrective actions?
When a company learns that its product is in violation of regulatory provisions, presents a threat to safety or creates a substantial risk of injury to consumers, the implementation of a corrective action should be considered. Although the decision to recall a product is voluntary, the competent agency can request or order that a recall be implemented.
What are the legal requirements to publish warnings or other information to product users or to suppliers regarding product defects and associated hazards, or to recall defective products from the market?
Pursuant to section 4 of Executive Decree 1798/94, upon learning about a product risk to consumers, suppliers of goods and services should communicate immediately to the competent authority and to the consumer by plentiful advertising.
Are there requirements or guidelines for the content of recall notices?
According to Resolution 808-E/2017 DTS, the communication to local authorities should include:
- information of the supplier issuing the recall;
- identification of the product;
- description of the defect, risks and consequences of using the product;
- indications of areas where the product was distributed;
- information about action already taken to mitigate the risk;
- description of product related accidents occurred;
- media communication plan; and
- consumer contact plan.
Other rules may apply to specific products. ANMAT, for example, issued Resolution 1402/08, setting requirements for the recall of drugs, cosmetics, personal hygiene products and perfumes. Such guidelines require the publication of warnings through the press or through ANMAT’s own communication resources (eg, a website).
What media must be used to publish or otherwise communicate warnings or recalls to users or suppliers?
Only ANMAT has indicated that publications of warnings should be done through its own communication and media resources.
Do laws, regulation or guidelines specify targets or a period after which a recall is deemed to be satisfactory?
ANMAT guidelines provide that the agency will evaluate the recall process and deem it satisfactory when suppliers have completed all possible actions to ensure that most products have been retrieved and that all necessary actions to avoid its commercialisation and consumption have been taken. Such evaluation of satisfactory recalls would depend on the circumstances, such as how many products have been effectively recalled, the time period of the recall and the risk or danger of using the product, among others.
Resolution 808-E/2017 DTS provides that local authorities could request the supplier the extension of the recall process, indicating different courses of action.
Repair and replacement
Must a producer or other supplier repair or replace recalled products, or offer other compensation?
Resolution 808-E/2017 DTS indicates that suppliers must repair or replace recalled products..
What are the penalties for failure to undertake a recall or other corrective actions?
See question 3.
What powers do the authorities have to compel manufacturers or others in the supply chain to undertake a recall or to take other corrective actions?
Most government agencies do not have the authority to compel manufacturers to undertake a recall. However, most of those agencies can order the supply chain to halt marketing of a particular product. Agencies can also publish warnings and other information about product dangers. Administrative agencies also have the power to seize products and preventively close plants and warehouses. Agencies such as ANMAT and DTA can review recall plans and suggest changes or modifications to the plan. ANMAT can also design its own plan to audit manufacturers recalling products, issue its own warnings and resort to the courts when necessary for recall compliance.
Can the government authorities publish warnings or other information to users or suppliers?
Government authorities can publish warnings or other information to users or suppliers. ANMAT allows consumers to post incident reports online, while the CPA allows consumers to file claims against providers of goods and services through its website or by email.
Can the government authorities organise a product recall where a producer or other responsible party has not already done so?
When the manufacturer or distributor does not act diligently, government authorities can organise a product recall. Government agencies can also issue warnings to consumers and the public, seize products and order the supply chain to halt marketing of a particular product. However, as a practical matter, when a government agency requests a supplier to initiate a recall, the supplier should consider complying to avoid sanctions and damage to its image.
Are any costs incurred by the government authorities in relation to product safety issues or product recalls recoverable from the producer or other responsible party?
A supplier is usually not responsible for the costs related to government actions regarding safety issues or product recalls.
How may decisions of the authorities be challenged?
There are limited ways to challenge agency decisions. In any event, as the challenge procedure can be slow and burdensome for a supplier that has been the object of a restraining order (eg, prohibition on marketing certain products), the supplier can file a fast-track request, asking a court to stop the effects of an administrative decision. To prevail, the challenging supplier should demonstrate that the administrative decision is arbitrary.
Implications for product liability claims
Implications for product liability claims
Is the publication of a safety warning or a product recall likely to be viewed by the civil courts as an admission of liability for defective products?
Most court precedents have found safety warnings, alerts and the recall itself to be an admission of liability. A court even considered a recall performed abroad as an admission of liability for a product marketed in Argentina.
Can communications, internal reports, investigations into defects or planned corrective actions be disclosed through court discovery processes to claimants in product liability actions?
No discovery procedure is in force in Argentina. But, as a matter of Argentine procedural law, plaintiffs should set forth in the complaint, the relevant facts of the case and list the evidence to be produced. Hence, when a plaintiff is not aware of internal reports, or that an internal defect investigation has taken place, it is unlikely that the plaintiff will request the production of those documents as evidence.