THE NEW MEDIA LAW AND THE "NATIONALLY PRODUCED ADS" PROVISION
Author: Paula G. Fernandez Pfizenmaier, PAGBAM
The newly enacted "Media Law" has introduced significant changes related to audiovisual communications services in Argentina, with clear consequences to the advertising field.
It is to be noted that the Law on Audiovisual Communication Services No. 26.522, also known as the "Democracy Media Law" (because it revoked the "Radio Broadcasting Law" passed in 1980 during the military de facto government) was enacted on October 10, 2009. Though critics of the law argue that this rule collides with the basic principles of the National Constitution and individual rights, the law was finally regulated by Decree 1225/2010 dated August 31, 2010, and is currently in full force. Further, the enactment of this law was not preceded by genuine consensus, instead, it resulted from unreasonably hasty actions that can be explained only by the government's interest in achieving a favorable legislation by taking advantage of a circumstantial parliamentary majority.
This article will exclusively refer to the amendments introduced in the advertising field, since Chapter VIII of the new law expressly regulates advertising activities. Art. 81 refer to "advertising broadcasting" and sets forth provisions on which basis advertising can be broadcast by audiovisual communication licensees. There is no doubt that the most drastic provision is the one contained in Paragraph a), which reads:
"Advertisements shall be nationally produced when broadcast by open radio broadcasting services or by channels or signals owned by subscription services or included in national signals;"
Art. 4 provides the following definition as to what should be understood by "nationally produced", namely: "Programs or advertisements fully produced in the national territory or made under the form of a co-production with foreign capitals, with the participation of authors, artists, actors, musicians, directors, journalists, producers, researchers and technicians, who shall be at least 60% Argentine or residing in Argentina from among the total staff involved."
In spite of the strong original drafting of Law No. 26522, the corresponding regulatory decree amended the original drafting of Paragraph a), making it clear that: "Dissemination of advertisements other than those nationally produced shall be subject to the existence of reciprocity conditions with the country of origin concerning broadcasting of advertising audiovisual contents. The agency or advertiser concerned shall invoke and prove such circumstance."
As you will be aware, pursuant to the original text of the law, only advertisements that meet the strict concept of "nationally produced" can be broadcast, which would imply an important restriction for those companies which, for example, produce regional or even world advertisements, or also for those agencies abroad which are entrusted with the production of advertising to then be broadcast in our country. However, the concept of "reciprocity conditions" introduced in the regulatory decree smoothes the original drafting and allows the broadcasting of advertisements other than those nationally produced provided that reciprocity conditions have been agreed with the country where the advertising was produced.
Now, the main concern is to determine what is to be understood by "reciprocity conditions". It seems clear that when any treaty or agreement has been signed between Argentina and the country of origin the conditions are accomplished. But it could also be understood that the reciprocity conditions are given when the country of origin of the advertising expressly allows the broadcasting of advertisements of an Argentine origin. Unfortunately, neither the original text of the Law nor its regulatory decree provides any answer to this point. Then, this matter remains subject to the free interpretation of advertising agencies and the licensees of communication services, who will be forced to prove that they comply with the law in order to avoid any penalties. Currently, the CONARP (The Council for Advertising Self-Regulation) is in contact with the authority of application to work on a resolution that will clarify this point.
On the other hand, Art. 81 contains other provisions intended to regulate the broadcasting of advertisements, such as:
Paragraph c): In the case of retransmission of open TV signals, no advertising spots shall be included except for those subscription services within the primary coverage area. The licensee of a television subscription service shall in no case insert advertising spots, either locally produced or not, in the open television signal being retransmitted.
Paragraph h): Any advertising directed to children or adolescents and which promotes the purchase of a product or service by taking advantage of their inexperience or credulity or by appearing as persuasive to their parents or tutors shall be deemed as contrary to the interests of children and adolescents. Advertising shall not be misleading regarding the features or safety of products or about the capacity or skill required from children or adolescent when using said products so as to avoid any damage to them or third parties.
Paragraph i): Advertisements shall not entail any discriminatory reference as to race, ethnic origin, genre, sexual orientation, ideology, social-economic group or nationality, among others; they shall neither undermine human dignity nor offend moral or religious convictions, and they shall not induce to acts being detrimental to environment or to physical and moral health of children and adolescents;
Inc. l): When health-related professionals appear in advertising spots, such advertising shall include their name and surname, specialization field and professional license number, this latter requirement as provided by the MINISTRY OF HEALTH.
The advertising of medicinal products which are available only under prescription shall be duly specified in the audiovisual communication services. The advertising of over-the-counter health-related products, which can directly or indirectly affect the health of consumers, such as dietary products or supplements, prostheses and/or medical technological devices, cosmetics, dental products, energy drinks, foodstuff or any other products that have or may have an effect on health, shall be allowed provided said products fully comply with the regulations enforced by the competent authorities. To that effect, the FEDERAL AUTHORITY FOR AUDIOVISUAL COMMUNICATION SERVICES - AFSCA- shall be entitled to ask the courts to examine a given case and to order the provisional suspension of an advertising assumedly infringing a specific rule on the matter when such infringement may potentially damage the health of consumers.
When an advertising spot refers to health benefits announced as the object of certification, acknowledgement, support or acceptance of any nature by scientific or health-related organizations and associations or professionals individually, said organization or professional shall be required to provide true evidence of studies, tests, analyses, surveys or research attesting to their knowledge of the product being the object of the advertising.
Paragraph m): Gambling advertising shall be previously approved by the competent authority;
Regarding broadcasting times, the same are regulated by Art. 82 which, for the case of open TV, provides for a maximum 12 minutes of advertising per hour.
Art. 83 provides that all investments on advertising to be broadcast by radio broadcasting services that do not comply with the national signal condition shall be excluded from the tax deduction rights set forth in Art. 80 of the Income Tax Law. Notwithstanding the above, the regulatory decree has explained that "When International Treaties or Conventions are applicable on this matter, the provisions of each of them shall determine applicability of the national treatment"
It is to be noted that advertising agencies carrying out advertising activities within the services regulated by law as well as the companies acting as brokers in the marketing of advertising of said services shall be registered with the Public Register of Advertising Agencies and Producers. This registration shall be mandatory for the marketing of advertising times within radio broadcasting services. Moreover, licensees or anyone authorized to render audiovisual communication services shall not broadcast any kind of advertising coming from advertising agencies or producers being not so registered.
Finally, the AFSCA (Federal Authority for Audiovisual Communication Services) -created as a decentralized and autarchic entity within the National Executive Power-, is the one to safeguard the enforcement of the law and to impose any applicable penalties. Among other functions, the authority of application is empowered to pass regulations, resolutions and procedural rules that may be necessary for the better performance of its duties, for which reason, new resolutions will probably be passed soon. Hopefully, some of such future resolutions will clarify the scope and application of Art. 81 and, particularly, the vague concept of "reciprocity conditions" introduced by said regulations. If that is not the case, these new and unclear provisions will probably harm the dynamic of our advertising industry as it happened in the past with other countries that enacted similar rules.
 Text Revised by Decree 649/97 (Official Bulletin Aug.6, 1997), Annex I, with subsequent amendments