The Portuguese Government has adopted end of September 2019 contingency measures applicable to financial services and social security matters in case a no-deal Brexit occurs.
Under the new rules, a UK credit institution, investment firm or fund manager authorised to provide services in Portugal under an EU passport will be allowed to continue to do so until end of 2020, provided that:
- Before Brexit, the relevant Portuguese authority (Bank of Portugal or CMVM) has received a notice from the relevant UK authority for the provision of services or the performance of an activity in Portuguese territory by such entity; and
- Within three months after Brexit, the relevant entity notifies the CMVM that it intends either to (i) unilaterally terminate the existing contracts or (ii) request authorisation to carry out its activity in Portugal.
Until the authorisation request is submitted, which must occur no later than six months after Brexit, the UK entities may not perform any new transactions with retail clients, save for the termination of existing contracts.
Banking contracts concluded before Brexit, such as deposits or other repayable funds, credit transactions, payment services and electronic money - as well as related ancillary contracts - will remain in force if the UK entities notify the Bank of Portugal within three months and comply with Portuguese laws.
UK investment funds may continue to be traded in Portugal provided that the relevant UK authority notifies the CMVM before Brexit and the fund manager provides the CMVM with the relevant information within the same deadline.
Finally, insurance contracts concluded with UK based insurance companies covering risks located in Portugal prior to Brexit will also remain in force, although they may not be extended.
In what concerns social security, UK individuals who have compulsorily paid contributions in Portugal will be entitled to claim benefits provided equivalent treatment is granted by the UK authorities to Portuguese citizens residing in the UK.
The new rules, approved by Decree-Law 147/2019, will enter into force if a no deal Brexit occurs and will expire on 31 December 2020.
Back in 2015, Spain levied a special tax on electricity producer which was suspended on the beginning of October 2018 for a six months period. Now that the suspension has ended, and as in Portugal there is no such tax, this was perceived as a competitive advantage to investors in the Iberian electricity market.
Apparently this is no longer the case as the Portuguese government has introduced a brand new special tax of €4,18 per MWh to be levied in 2019 upon all renewables not subject to a special regime. The Portuguese government argues that this fiscal disparity creates a market disturbance and should be treated as an extra-market event “which may influence the market price and revenues of the different Portuguese producers”.
The Portuguese government is in fact authorized by Decree-Law no. 104/2019 to create a payment on account in order to suppress such disparity between Portuguese and Spanish electricity producers.
This new tax was determined by the Secretary of State for Energy through the Ruling no. 8521/2019 after a proposal from the Energy Services Regulatory Entity and has entered into force on 27 September 2019.
This new tax was already foreseen in the State Budget for 2019 and its creation raises questions on its lawfulness.
The California Senate passed the new Assembly Bill 5 (“AB5”) - a controversial bill aimed at curbing the abusive use of the figure of the service provider in employment relationships.
As with the Supreme Court ruling in the Dynamex case, this new bill, published September 10th, establishes the “ABC” method, which requires the verification of three requirements for the qualification of a service provider: (i) the worker may freely carry out and organize his/her work; (ii) the execution by the employee of tasks outside the normal scope of the hiring company's activity; and (iii) usual involvement of the worker in independent businesses or occupations, with the same nature as the activity performed for the hiring company.
Should the amendments to the AB5 be approved by the California State Assembly, their entry into force will cover a wide range of professionals in many different areas: construction, security, domestic service, catering, doorkeepers and janitors – as well as Uber and Lyft drivers. It is estimated that in California there will be about one million professionals affected by this bill.
The approval of the bill will also imply that these professionals will benefit from, inter alia, health insurance, minimum wage, maternity and paternity leave, overtime pay, unemployment protection, and the possibility of unionization. This means that the lives of workers who currently have no labor protection will be radically changed.
The AB5 represents the first major political battle in the United States against the collaborative method which characterizes the gig economy – and it is an attack to the root of its business model. The new bill will deem the drivers of private transportation platforms, like “Uber” and “Lyft”, as employees.
Given the great influence of California, it is likely that other states, such as New York or Washington, where similar projects have already been presented (but which eventually had no continuity) may adopt similar measures.
Once approved by the California State Assembly, the new bill will come into force on 1 January 2020.
We will have to wait to confirm the practical results of this new bill. However, it is anticipated that not all companies will requalify their service providers as employees. In this sense, Uber is an illustrative example – the driver’s company has an history of resisting the labour regulation and the qualification of its drivers as employees.
With the wildfires afflicting again the country, and a general election in early October, the Portuguese cabinet launched two programs to combat the climatic changes and their negative effects on the environmental, social and economic domains: Program of Action and Adaptation to Climate Change (P-3AC) and Program of National Strategy of Active Cycling Mobility (ENMAC).
In the P-3AC program, the Portuguese Cabinet established as priority action lines, the prevention of rural fires, the improvement of soil quality, water management and urban vulnerabilities, reserving, to the effect, a financial package of 372 million euros to be spent up to 2020.
This package includes (i) 129 million euros to implement urgent measures, such as planting fire-resilient forest species, promoting the reduction of fuel biomass through intermunicipality structures, reconfiguration of telecommunications networks in forest areas and the installation of a communication system to alert the rural populations; and (ii) 127 million euros to make water consumption more efficient, for instance, favoring the conversion of crops to less water-demanding species, varieties and cultivars or promoting the installation of rainwater harvest system to support the industrial activity and improve the water savings.
The Portuguese Government forecasted a total spending of 560 million euros in coastal protection until 2030, to promote a more resilient coastline to erosion and coastal flooding and the removal of structures or buildings in high risk zones.
In parallel, the ENAMC program puts in place active mobility strategies in large urban areas for the 2020-2030 decade, with the intent of reducing the culture of individual transport.
Recognizing the health, traffic, economic and environmental benefits brought by cycling mobility, the program targets having 10,000 km of cycle paths until 2030 in the urban areas and creating an awareness program to universalize this mode of transport. Among the objectives of this program we can find:
- having cycling as extracurricular subject in the schools;
- building an articulated system of cycling stations;
- changing the Road Law to increase favorable and safer conditions for the users of this cycling vehicles, for example, creating more strict rules about the behavior in the cycling paths and assessing the chance of attenuation of the injured person's guilt as a cause of exclusion or reduction of compensation in the event of objective liability.
In addition, the Labour Law will be amended to improve conditions, in the medium and large companies, for workers to use bicycles, such as the right to specific space and bike lockers.
Legal 500 - Interview with António de Macedo Vitorino
Senior Partner António de Macedo Vitorino talks differentiation and success in today's market, forward-thinking strategy and the true meaning of 'adding value' to clients.
1) What do you see as the main points that differentiate Macedo Vitorino & Associados from your competitors?
Attention to the details, clarity, looking one step ahead. Generally, firms will tell you that they can deliver the best service and that they are commercially aware, but only a few can actually deliver. This is because any firm is only worth what their lawyers are capable of doing. If you have a talented team and the right business procedures, you can excel. For us, the key elements in service delivery are the attention to the quality of our processes down to the smallest points, not overstepping your role and to understand and really listen to your client. Not many firms do that. We cannot pretend that we are the best, but we like to pride ourselves in not falling short on our promise to clients: clarity, straight to the point, no legal jargon.
2) Which practices do you see growing in the next 12 months? What are the drivers behind that?
Data protection, M&A, banking and real estate. These are the areas we are seeing expanding in the market. We expect growth to continue despite the uncertainty that is felt caused by Brexit and US/China tensions. The real estate boom seems close to its end but before slowing down there will be a period of continued growth. There are several projects in the pipeline that will keep the economy and law firms busy for at least the next 12 months. On data protection and privacy, we have only scratched the surface. The use of personal data for client profiling and service and product customization will be the next big thing. Trading of data and b2b services using personal data will continue to grow. So, we see this as one of the big market opportunities for the next 12 months and beyond. Transactional services in M&A and banking are also expanding. We are now around pre-crisis levels, but we expect this to improve.
3) What's the main change you've made in the firm that will benefit clients?
Updating our internal IT systems and moving to an extremely secure cloud system. Clients don’t see it but it is changing the way we collaborate, the way we produce documents with the changes being made simultaneously by many lawyers working in the office, from home or anywhere where they have an Internet connection. We work faster and better. It’s a revolution as big as the use of email in the nineties.
4) Is technology changing the way you interact with your clients, and the services you can provide them?
Yes. We can now share workspaces with clients and bring them in on the document creation process. Sharing and working on documents in a single point of access has already changed the way we do due diligence work. We are now a long way from the days we had to go to a physical data room to look at documents and take notes. You can access virtual data rooms. That has been a big change, although people seem not give it too much credit.
Sharing actual work spaces and promoting collaborative working will more than double the speed at which you can negotiate and produce a contract, a legal opinion or a court brief.
We are now doing it internally with extraordinary results. We need to bring in the client and other stakeholders to the document production process. We will gain in the speed at which we work and also in the quality of the end product. The technology is available. We only need to start doing things in a different way. In the next ten years, collaboration tools and systems will be the norm.
In 5 to 10 years Artificial Intelligence tools will also be used on a day-to-day basis, but we are not there yet.
5) Can you give us a practical example of how you have helped a client to add value to their business?
Tough question. We like to say that if we deliver a good service, we have added value to the client’s business.
Many times, it’s in the small stuff that you add real value. Picking up the phone and answering a question can lift a weight from the client’s shoulders and that is what we are here for.
We are not stars doing miracles, but ordinary people who can do their job well.
Sometimes, doing your job well can have an outstanding result. For instance, on one occasion we were working on a financing and we were able to negotiate two comfort letters that made the difference in the pricing of the loan facility to fall to less than 20% of the initially agreed price. Because of that the entire structure of the transaction changed, new lenders were brought into the deal and the clients and the borrower were very happy with the result.
But we still say that our job is that attention to the detail and not trying to reinvent the wheel. Small things may make a big difference. We add value if the client tells us that we did our job well no matter how small or how important that particular assignment was.
6) Are clients looking for stability and strategic direction from their law firms - where do you see the firm in three years’ time?
In many instances the lawyer’s role is more that of a counsel. Clients want lawyers’ reassurance that the desired actions are suitable from a legal stand point, giving them a stable base for conducting business.
Clients also seek advice or even the validation of strategic decisions.
Counseling is at the root of a lawyer’s traditional role and it seems increasingly important as the forms of delivery of legal services become more commoditized and are taken over by legal processors and the legal arms of accounting firms.
We expect to continue the same path we have to date but also to bring more disruptive solutions to the market. We will continue investing in people, processes, technology and our clients.
Macedo Vitorino launched a new edition of its «Why Portugal» report today.
«Why Portugal 2019 - Doing Business in Portugal» contains the main information needed for anyone who wants to invest in Portugal: the creation and organization of companies, partnership contracts, labour law, tax law, intellectual property, real estate and litigation.
Together with the investor's guide we publish the «Why Portugal 2019 – How does Portugal compare?» report, which shows the situation of Portugal in comparison to other countries according to information from international sources such as the World Bank and the Economic Forum Comparative tables on the most important aspects to be taken into account by investors when choosing the best places to invest.
"We are delighted to have been able to review and update the information provided by our investor guide. These reports represent the effort of many people and demonstrates a remarkable organization capacity that shows the way we work," says António Vitorino, the partner in charge of the"?WhyPortugal?"project since it started off in 2013.
"After several years of crisis, during which it was difficult to explain the advantages of Portugal both to foreigners and to Portuguese, today it even seems easy to praise Portugal," added António Vitorino. "But we must always try to improve. The competitiveness of an economy always depends on its ability to innovate, to correct the worst and to improve the best. Competitiveness is a race: we cannot stop."
This guide reviews the main aspects to be considered by foreign investors looking at?Portugal as a place to invest,?such as how to set up of a business, government incentives, employment rules, tax system, intellectual property protection, investing in real?estate and judicial system.
Learn more at «Why Portugal 2019 - Doing Business in Portugal» and «Why Portugal 2019 – How does Portugal compare?»
MV Conversation with António de Macedo Vitorino
In the latest version of their investment Guide ‘Why Portugal’, Macedo Vitorino gives an insight into the realities and legalities of investing in Portugal, answering the key questions any potential investors need to know.
Since the 90s, Macedo Vitorino has made it a priority to impart pertinent information to potential investors in Portugal. Initially this began as a paper covering business forms, employment and tax issues, but since 2013 this has morphed into the ‘Why Portugal’ Guide. This go-to online platform for foreign investors into Portugal answers key questions and addresses fundamental issues investors need to take next steps in their decision-making process.
What started as an informative paper sowed the seeds for an idea that came into fruition in 2013, explains António Vitorino. “There were a myriad of investment guides out there, usually compiled by investment agencies and law firms, but we wanted to create something that took this to the next step, not just information on the law or stereotypical ‘attractive qualities’ of Portugal itself, but something practical and objective that investors could act on.”
Macedo Vitorino took the initiative to create something that looks at things from the investor’s point of view, tackling the actual realities of setting up or investing in Portugal, what investors can and can’t do, and their options and limitations. “For example, if you’re looking to start a business here you need to know how long it takes to create a company, how rigid the employment rules are, what your tax obligations will be and what are the practical steps to buying real estate in Portugal. These are just the basics.”
But when the «Why Portugal Guide» began in 2013, it was a time when all bets were on as to whether Portugal would remain a part of the Eurozone or even in the EU, says António Vitorino, and people said it was one of the worst places to invest in Europe. “So, it was logical for us to also touch on the actualities behind the country’s legal, political, social and economic systems as well as how Portugal compares against the rest of the EU. Investors need a full informed picture to be able to make their investment strategy.”
This comparison is a key part of the decision-making process for investors and it’s important to have this information from the start. Aside from the legalities, you need to know the type of country you are looking to invest in, he explains, especially if you are looking for the best route into the EU or you are coming in from a country outside the EU and maybe not familiar with the landscape and legal system.
“How does the judicial system actually work? How does Portugal compare to the rest of the EU for red tape and bureaucracy? These are crucial questions that need substantiated answers,” says António Vitorino. “That’s why we looked for credible international sources, such as the World Bank’ Doing Business Report, the World Economic Forum's Global Competitiveness Report and relevant EU rankings, so investors can see Portugal’s historic position from objective sources with the statistics to match.”
They also help the investor by interpreting that data into practical points that they can use to build a realistic picture of where Portugal stands. For example, in 2012 Portugal was number one in Europe for starting a business and a pioneer in the world for online incorporation of companies. “Of course, some 10 or more countries have now caught up, and now we’re not number one but still high in the rankings. But what the investor really needs to take from this is that it’s quick and easy to incorporate in Portugal,” says António Vitorino. Another example relates to resolving disputes. “We alert investors that realistically it can take up to two years to resolve a dispute in the judicial courts, which puts Portugal somewhere in the middle of the EU ranking tables, lower than the benchmark countries. While this is not ideal, it is something we’re working to improve, and investors just need to be aware to avoid any surprises.”
The key takeaway to highlight for any investor, however, is the openness of the Portuguese economy to foreign investment, with the country ranked in the top three in Europe according to a study published by the European Central Bank, which states that Portugal has “virtually” no barriers to foreign investment. “We don't have barriers to foreign investors as other countries, political or economic, and no barriers derived from nationality or any policy of protecting or favouring local companies,” says António Vitorino. “This is key, because it distinguishes Portugal from the rest of the EU in what is otherwise a pretty level playing field for investors.”
‘Why Portugal 2019’ is available in PDF and online at https://www.macedovitorino.com/why-portugal and has dedicated sections covering investment incentives, residence permits, starting a business, tax, real estate and disputes, as well as a lot more information on corporate law, additional answers to employment questions and diving deeper into questions of IP.
If you need further clarification or help with any of the issues involved, please do get in touch at https://www.macedovitorino.com/contactos/.
MVConversations with João Macedo Vitorino
Recent changes to the law and an upcoming auction hope to take Portugal from Europe’s lowest solar user to a being considerable presence in the market.
The future may be getting brighter for Portugal’s solar industry. The country’s as yet unexploited sunny climate is being put to market next month with its first ever solar auction for 1.4 GW in four key regions - Portugal’s largest ever solar energy auction. The auction comes on the back of recent reforms to the Energy Law addressing setting up the way forwards for increasing the energy grid capacity.
There has, however, been criticism and a worry that the longer-term costs are being compromise for hitting short-term goals, says João Macedo Vitorino. “While the auction system itself has been discussed at government level, it has never been discussed with the market itself. Certain issues such as the impact of reducing the return on investment in a very competitive European market, long-term costs to consumers and clarity on the actual capacity available on the grid remain unclear.”
Until recently, solar project licences were sought directly from DGEG, the Portuguese Energy Authority. Without a clear view of the actual capacity available on the grid, investors would go down the road of working on obtaining the production licence, getting environmental and geology reports, etc, but in the end there was either no capacity or the authorities simply said ‘no’, he explains. “This risk just wasn’t attractive for investors.”
Up until recently the costs of implementation were high and wouldn’t be feasible at market prices. “To sell energy at that price on the market wouldn’t get a return on an investment,” says João Macedo Vitorino, “but over the past two years, prices of solar panels has gone down, projects at market value are viable and the political will is there to get things moving with a new regime.”
From now on, to apply for a licence you first need a grid connection reservation title. This can be done in one of three ways. First, enter into a direct contract with a grid operator where there is available capacity in the grid; second, where there’s no such capacity, a direct contract with a grid operator but with the producer assuming the costs of connection to the grid; and finally through a Government auction, such as the one next month.
These positive changes to the regime have had a knock-on effect for current projects with licences or in the process obtaining them. “The Government has effectively cancelled these projects and they need to resubmit to the auction,” explains João Macedo Vitorino, “which means running the risk of refusal, so we are likely to see some court cases cropping up in the future”.
While next months’ auction has the potential to increase the number of projects to be connected to the grid, one concern is that successful bids are to be awarded on the basis of the lowest tariffs. While an aggressive fixed tariff (starting at 20% below the market price as of today) means short-term savings for consumers, should energy prices go down the fixed tariffs granted in the auction will remain the same, adding a substantial advantage for the producers but imposing high invoices for the consumer.
Comparison can be drawn with what happened with the Portugal’s small hydroelectric projects auction for capacity back in 2010. Bidders made offers for tariffs that couldn’t sustain the investments that the projects needed, projects didn’t go ahead, and no further auctions took place, he explains. “To hit the new 5GW to 6GW solar targets set by the Government, we would need at least 3 or 4 auctions to take place, which may not be feasible if conditions remain as they are as they may not be enough to attract investors.”
An alternative to this auction system would be a free market approach where all stakeholders have clarity on the grid capacity available today and in the near future. This would mean they could plan in advance where to invest, with a grid connection being granted on a simple principle of first-come first-served. While there are numerous viable locations for solar projects, such as in the Alentejo region, many do not have grid capacity access in their vicinity. To cover the distance needed to put these locations on the grid requires substantial investment, driving up the costs of the project itself, adds João Macedo Vitorino. “This is something that could deter investors when coupled with auction conditions designed to reduce project profitability. Although encouraging costs sharing between grid operators and developers could be one way to bridge this gap, as laid out in the revised Energy Law, investors will not be attracted to auctions in areas of low grid density.”
Ultimately, while elements of the new legislation and auction system do address difficulties brought up by market players, the overall solution and architecture has never been validated by those same market players. “While the potential is there to put Portugal on the solar map, the Government is trying to force the market players to share profit margins with consumers, which will most likely result in delaying the deployment of solar energy output in Portugal,” explains João Macedo Vitorino. Unless these conditions change for future auctions, we run the risk of history repeating itself and either failing to get the investors needed to increase grid capacity or see consumers bearing the costs in the long-term.
For anyone interested, the tender documents and maps of grid availability can be accessed online at https://leiloes-renovaveis.gov.pt/ and bidders registration is open until 7th July.
Last 14 June of 2019, the European Parliament published new regulations aligned with the long term goals for full integration of the EU energy market.
Regulation (Eu) 2019/941 Of The European Parliament And Of The Council, of 5 June 2019 on risk-preparedness in the electricity sector, repeals the Directive 2005/89/EC and establishes new rules concerning the storage of energy to guarantee its in case of a crisis. This Regulation also uniformizes the obligations of the grid operators on this regard, specially, with the need of making plans for contingency periods and new forms of cooperation among the State Members.
Regulation (Eu) 2019/942 Of The European Parliament And Of The Council, of 5 June 2019, redefines the legal framework of the European Union Agency for the Cooperation of Energy Regulators (“EUACET”). EUACET will issue opinions and recommendations to the players and national agencies and submit guidelines on energy policy to the European Commission agency aiming to further involve all Member States regarding in energy cooperation within the EU.
Regulation (EU) 2019/943 Of The European Parliament And Of The Council, of 5 June 2019 addresses the two main goals for the decade: decarbonize the sector and generate cleaner energy. It includes thresholds for CO2 emissions of each electric facility that generates power using fossil sources.
Directive (EU) 2019/944 Of The European Parliament And Of The Council, of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU aims to confront the new challenges to the energy market posed by smart grids and the smart metering.
We are still waiting…
Portugal has not yet approved a local law implementing the General Data Protection Regulation (GDPR).
On March 2018, the Portuguese Council of Ministers presented a bill to the Portuguese Parliament. The new law was supposed to come into force on the same application date of the GDPR, 25 May 2018. In May 2019, we are still waiting for the bill to be voted.
During the last year, the Portuguese GDPR bill was criticized by many, including the Portuguese supervisory authority, the Data Protection Authority (Comissão Nacional de Proteção de Dados - CNPD), which had no say on the drafting of the bill.
Among other issues, the Government’s proposal replicated several provisions of the GDPR and, in some cases, contravened the GDPR. For instance, the bill proposal stated that the local law would apply to “the processing of personal data of data subjects resident in Portugal”, instead of referring to the data subjects who are in Portugal, irrespectively whether they are (or not) resident in Portugal, which limits the scope of the law and leaves unprotected non-residents that happen to be in Portugal.
After the discussion period and a review by Portuguese Parliament members, the territorial scope provision was amended to comply with the GDPR. The current version also shows some effort in avoiding useless duplications of the GDPR text.
The exemption of fines to public entities was another provision receiving a strong disapproval by the Portuguese supervisory authority. In this regard, Article 83/7 of the GDPR states that “(…) each Member State may lay down the rules on whether and to what extent administrative fines may be imposed on public authorities and bodies established in that Member State.”
In Portugal, there is no tradition of exempting public entities from fines. There is no material reason for a different treatment between public and private entities. In fact, the proposed exemption gave many public entities the idea that controls would not apply to them and that they would have more time to implement the GDPR. As a consequence, the public sector, along with the SMEs, have been delaying implementing the GDPR.
In the meantime, answering to the public criticism, the Portuguese Parliament proposed a compromise. In the current draft bill, the exemption will be applicable under justified grounds on a case by case basis by the Portuguese supervisory authority and for a maximum period of three years. All the other rules, including corrective GDPR measures, will apply to public entities.
However, this compromise solution is still considered a sensitive matter. If this provision was approved, it is very likely that the Portuguese supervisory authority will apply the exemption in very exceptional cases only.
The Portuguese bill also includes specific provisions on the Data Protection Officer (DPO), including secrecy and confidentiality duties, tasks, and which public entities are obliged to appoint a DPO.
In general terms, the GDPR establishes that public authorities are required to appoint a DPO. In order to determine which public entities have to fulfil this obligation, the Portuguese GDPR bill provides a list of public entities, including the Portuguese State, the Autonomous Region of Madeira, the Autonomous Region of Azores, municipalities, independent supervisory authorities, public institutes, public law schools, State, municipal business sectors and public associations.
Between the earlier version and the latest one, there are two major differences. Portuguese parish councils (juntas de freguesia) with more than 750 inhabitants are obliged to appoint a DPO. Earlier, the appointment of a DPO was decided by each parish on a case by case basis.
There is also another change, which may have a significant impact on the State business sector (sector empresarial do Estado – «SEE»): while the first proposal provided that only the public undertakings (entidades públicas empresariais – «EPE») were obliged to appoint a DPO, the new version includes all public business entities of the SEE, all of them must have a DPO.
The Portuguese bill also provides the following:
(a) GPDR codes of conduct or certification mechanisms must be approved by a certification body recognized by Instituto Português de Acreditação (IPAC, I.P.) and in accordance with the requirements established by the Portuguese supervisory authority. As far as we know, no codes of conduct or certification mechanisms about GDPR are in place until now;
(b) In relation to the offer of information society services, the Portuguese bill establishes that data processing of a child above the age of 13 years will not require consent given by the parents. Although Portuguese law usually adopts a conservative approach on minors’ rights establishing the age of 16 years, as a reference age, the Portuguese bill opted to follow the majority of the Member States, which consider the age of 13 years old for information society services;
(c) The Portuguese bill provides for specific rules on the processing of employees' personal data in the employment context, in particular as regards the conditions under which employees’ personal data may be processed on the basis of the employee’s consent, as well on the use of video surveillance systems and employees’ biometric data. Generally, the employee’s consent is not a lawful basis for employees’ data processing if: (i) from the employee’s data processing results a legal or financial advantage for the employee; or (ii) the data processing is necessary for the performance of the employment contract. Video surveillance systems may only be used against employees in the scope of a criminal lawsuit. The use of employees’ biometric data is only lawful for purposes of employees’ attendance and access controls to the employer’s premises.
(d) The processing of genetic data and data concerning health rules are subject to the principle of “need-to-know” the data. Data controllers are obliged to give notice to data subjects of all accesses to their personal data concerning health. This means that data controllers will have then to implement such traceability mechanism;
(e) No data retention deadlines are applicable for data concerning Social Security contributions for retirement purposes;
(f) Except for willful cases, the starting of a misdemeanor proceeding by the Portuguese supervisory authority must be preceded by a warning for the remedy of the breach within a reasonable deadline. For very serious infringements, the fines thresholds are divided into three different recipients categories: (i) €5,000 to €20,000,000 or 4% of the annual turnover, for large companies; (ii) €2,000 to €2,000,000 or 4% of the annual turnover, for SMEs; and (iii) €1,000 to €500,000 for individuals. Half of these amounts are applicable in case of serious infringements.
In some matters, the Portuguese GDPR bill is silent. For instance, the bill does not establish specific rules applicable to private life data, including solvency and creditworthiness. This data was considered similar to sensitive data (now, special categories of data) under the former Portuguese data protection law.
The Portuguese GDPR bill also does not contain specific provisions about the relationship between the GDPR provisions and the access right to public documents, nor private enforcement rules in relation to the decisions taken by the supervisory authority.
Moreover, the Portuguese bill surprisingly establishes a «standstill» period for new consents, entitling data controllers, either private or public entities, to obtain new data subjects’ consents within an additional period of six months from the effective date of the local law. This provision, which remains unchanged in both versions of the bill, clearly contravenes the GDPR, which is directly applicable in all Member States, including Portugal. The GDPR does not include any special rules on consent matter, which allow Portugal to set a different deadline beyond 25 May 2018. Therefore, it is expected that this provision is not incorporated into the statutes of law.
Although some sensitive issues still remain, the final text should be voted and approved by the Portuguese Parliament’s members during next month.