Did the Argentine Supreme Court Endorse the Milei Administration’s Policy? (Spoiler Alert: No.)

On September 29, the Argentine Supreme Court dismissed a case brought by a Malvinas veterans special interest group that had obtained an injunction to overturn the repeal of Argentina’s restrictions on foreign ownership of rural land. The decision reopens Argentina’s rural land market, a policy goal pursued by the Milei Administration since coming to power in December 2023. Nonetheless, the High Court’s decision does not necessarily end the debate on foreign ownership of the country’s coveted farmlands and freshwater reserves. Read on to find out why.

In our last look at the subject, “Milei’s Push for Deregulation: Can Argentina Finally Open Its Rural Land Market?,” we looked at the legal uncertainty stemming from President Milei’s repeal of Argentina’s Rural Land Law and the subsequent legal action to unwind that repeal.

We reported on the constitutional challenge (amparo) of the president’s executive order brought by a group of Malvinas war veterans (the Centro de Ex Combatientes Islas Malvinas). The veterans claimed the Rural Land Law was vital to national sovereignty and alleged their standing to represent the national interest. The plaintiffs quickly obtained a federal court injunction to stay the executive repeal and eventually prevailed in arguing the law’s repeal required an act of congress and could not be done by executive order. The Milei Administration appealed the ruling and, until this week, the status quo ante prevailed pending the Supreme Court’s review.

As a result, foreign acquisition of rural lands remained restricted by the Rural Land Law.

The Supreme Court dismissed the Malvinas veterans’ complaint based on a lack of standing to bring the action. In so ruling, the Court rejected the appellate court’s reasoning that national sovereignty was a “collective right” that could be defended by a class action. Rather, the Supreme Court held, sovereignty is an attribute unique to the State, incapable of legal defense by a class representative. Having concluded no collective right was involved, the Court ruled the Malvinas veterans lacked standing to challenge the repeal of the Rural Land Law.

Nonetheless, the justices did not rule on the merits, i.e., whether the specific provision (Article 154) of the executive order (DNU 70/2023) repealing the Rural Land Law was an unconstitutional exercise of executive power.

For now, the Rural Land Law is repealed and foreign ownership is unrestricted. Foreign investors acquiring rural land in Argentina are no longer conditioned by national origin quotas previously imposed (15% cap on total foreign ownership in a specified nucleo (territory); 30% cap on any single nationality in that territory) or bans on acquiring properties bordering frontiers or large bodies of water, though other national or provincial regulations may still apply to certain areas and should be assessed on a case-by-case basis.

Nonetheless, the executive order (DNU 70/2023) that included the repeal remains vulnerable to congressional override upon the affirmative vote of both chambers. In March 2024, the Senate voted to repeal the executive order. In the House, parties opposing the Milei government are busy cobbling votes to annul the executive order. It is unclear if they will succeed.

Alternatively, Congress could enact new legislation regulating foreign ownership of rural land. If so, such new legislation might restore some of the preceding law or implement a new regulatory framework to protect national interests.

For now, foreign investors can freely acquire rural land but they must continue to monitor developments. With some notable exceptions, Argentina has a good track record of protecting private property, and we do not envision risk to foreign persons relying on the Supreme Court’s ruling to acquire property. Rather, because the rules can again change, any future restrictions might hinder a subsequent sale of rural property to persons other than Argentine nationals.

Foreign ownership of rural land in Argentina has been debated for over a century. Questions of national sovereignty, food security, property values, and local control of strategic natural resources continue to make the issue a politically sensitive topic across Argentina’s political spectrum.