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In 15 days the embargoes could start if Argentina does not present guarantees

In 15 days the president Javier Milei He will have to face his first great challenge in international matters. The fact is that on January 10 the deadline set by the New York justice system to deposit a guarantee in the case for the expropriation of YPF. Otherwise, From January 11, embargo requests could begin. The presidential spokesperson Manuel Adornianticipated that “Argentina will fulfill its commitments.”

“President Milei’s first appointment in international courts is January 10”described in his X account the lawyer Sebastián Maril, regional director of Latam Advisors and one of the people who most closely followed the cause of the expropriation of YPF.

The latest development in the case was a new setback by Judge Loretta Preska, of the Court of the Southern District of New York, to an Argentine request. After the change of presidential administration, The Milei government requested a 30-day extension request to familiarize itself with the case and introduce arguments in the case. However, the beneficiaries of the ruling presented a document opposing the Argentine request.

And then the judge determined that she will not give the country the extension: “If this trial is as critical as the Republic represents it, one would think that the new Government would pay immediate attention to it,” Preska wrote. Thusnext January 10 is the deadline for Argentina to present guaranteesotherwise, On the same 11th the embargoes could begin.

In any case, Maril explained in to failure. However, if he does not deposit any guarantee (he has already announced that he will not do so), the beneficiaries of the ruling will be able to begin a process of seizure of State assets on January 10. Payment will only occur if (1) Argentina chooses to continue with the same legal strategy of kicking the ball using legal channels in the USA (3 more years) and continues to loseor (2) if there is an agreement before.”

On the other hand, Argentina informed the Court of Appeals that the country is not in a position to present guarantees in the trial and requested the suspension of the obligation or an extension for another 90 days. That was the first presentation of the LLA management, in charge of the Treasury Attorney General’s Office, the state body that is handling the case. On this point, where Argentina argues that it needs time to “familiarize itself with the case,” there was still no response.

The strategy of this government and the previous one was that “pledged those assets as collateral would require authorization by law of Congress.” The assets to be put as collateral can be those that the State provides, as long as they are approved by the beneficiaries. “I don’t know if Argentina is in a position to present assets as collateral without asking Congress for permission. And if it does, it seems unlikely that they will authorize this government in the midst of this context. Perhaps it will present an asset to avoid embargoes with a DNU that has to be approved in 10 days, but it is a hypothesis,” Maril anticipated.

For this reason, going forward there are two key dates: January 11, because embargoes could begin, which for Maril this could include “26% of the Class D shares that the State owns in the oil company”. And then on January 23, “when the country must present its first arguments in the appeal.”

What the Government said about the trial for the expropriation of YPF

The spokesperson for the Presidency anticipated that Argentina will seek to comply with its commitments, but did not report what the judicial strategy will be going forward: “Argentina will always respect its contracts, and will always respect the decision of justice in every order,” he stated on Friday at a press conference.

“We are analyzing the alternatives and of course we understand that it is part of a great overflow that we are trying to solve and that we Argentines are as little affected as possible, given the mismanagement that occurred in various aspects of Argentine economic life,” said Adorni, with criticism of how the expropriation was carried out in 2012. “We are seeing the consequences of this colossal amount that all Argentines will have to take responsibility for,” he added.

The conviction for US$16.1 billion

The trial for the nationalization of the oil company began in 2015 after the bankruptcy of the Petersen Group. Burford Capital, a fund specialized in this type of litigation that purchased the right to litigate in Spain from Petersen Energía Inversora and Petersen Energía, two companies that the Eskenazi had created, in order to file the lawsuit in New York against Argentina. Furthermore, Burford purchased the right to litigate years ago from minority partners of the company who claimed to have been harmed because Argentina did not give them the same treatment as the Spanish company Repsolwhose share package was purchased for about US$5,000 million.

In the trial that was decided this year in the first instance, YPF managed to stay out of the case, so you will not have to face costs for the litigation, which must be assumed 100% by the Argentine State. Preska condemned the State to pay US$16.1 billion for “having been improperly retained” with the majority shareholding of the oil company in 2012.

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