The Portuguese President recently ratified the Trade Agreement between Canada and the European Union (CETA), after its approval by the Portuguese Parliament on September 20, 2017.
CETA aims at (i) strengthening the close economic relationship between the parties, (ii) establishing clear, transparent and mutually advantageous rules governing investment, and (iii) reducing custom duties. European companies can now benefit from new opportunities and have secured easier access to Canadian public procurement. On the other hand, CETA creates new opportunities for farmers and food producers (including exports of Portuguese non-food goods to Canada), with an expected reduction of 90.9% in Canadian customs duties, which facilitates products exports such as wine and cheese.
Nevertheless, CETA has met the resistance of several European countries, as it provides for the establishment of arbitration courts to resolve disputes between multinationals and governments that will prevail over judicial courts, the rules of each national legislation and over EU law.
In Portugal, CETA provisionally entered into force on 21 September 2017, being still subject to the approval of all member countries of the European Union to become fully effective.
An international public tender is expected to be published in both the Portuguese and European Union official journals on the second half of 2017 to select a private partner for the development of a new Hospital Centre in Lisbon (Hospital de Lisboa Oriental, hereinafter the “Hospital”) under a Public-Private Partnership (“PPP”).
The new Hospital intends to replace the hospital units of São José, Curry Cabral, Santo António dos Capuchos, Dona Estefânia, Santa Marta and the Alfredo da Costa Maternity.
The PPP’s project will have as scope the design, financing, construction and maintenance of the Hospital´s infrastructures. Clinical health services and heavy medical equipment shall be borne by the State.
After the publication date of the international public tender, competitors will have a six-month deadline to submit their tender proposals, being subsequently selected 2 to 3 competitors for a negotiation phase. The selection of the candidates will be based on two main criteria:
(i) Price: corresponding to the net present value, as at December 2019, of the private partner’s consideration provided at the tender proposal; and
(ii) The project’s technical quality: with 13 evaluation factors and a total of 88 specific features.
The PPP will have a 30-year term, which includes a 3-year term for the construction of the Hospital and a 27-year term for the maintenance of the infrastructure.
This project is expected to require a €300 million investment from the private partner and it shall have an estimated annual remuneration of €16 million to be paid by the State once the Hospital has been built.
The construction of the new Hospital located in the parish of Marvila is scheduled to start in January 2020, and will have a gross construction area of approximately 180,000.00m², with a total capacity of 875 beds and a 2,945 parking spaces to be operated by the private partner.
The Hospital is due to start operating in 2023.
Foreigners wishing to start a professional activity in Portugal have easier conditions to acquire a residence permit with the new Portuguese legislation enacted yesterday.
Those who do not have a valid residence visa may:
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apply for a residence permit, through the SEF website or before a SEF regional delegation; and
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apply for a residence permit only with a promised employment agreement.
Also, expelling undocumented foreigners already living in Portugal with minor children and with effective parental responsibilities (e.g. providing them support and education), even if the minors are third-country nationals, is no longer possible.
The Portuguese Government approved Decree-Law 81-C/2017, which establishes the rules applicable to the intermediation and the provision of advisory services in consumer credit agreements .
Unlike most European Union countries, Portugal had failed to implement Directive 2014/17/EU on credit agreements for consumers relating to residential immovable property (Mortgage Credit Directive) and had not yet regulated the activity of credit intermediaries.
Under the new rules, the Bank of Portugal will play a leading role and will be responsible for the prior authorisation and the supervision of credit intermediaries and advisors.
Among other powers, the Bank of Portugal will be responsible for (i) authorising the exercise of these activities, (ii) creating and updating the credit intermediaries’ registry database, (iii) controlling compliance with the applicable rules, (iv) issuing regulations, (v) assessing consumer complaints and (vi) applying sanctions.
Under the contemplated authorisation procedure, the Bank of Portugal must take a decision within 90 days as of submission of the application. The deadline may be extended to 180 days if the Bank of Portugal requests additional information to the applicant.
Credit intermediaries will be divided into the following three categories taking into account their relationship with the creditors or the consumers and whether they carry out another activity:
- Tied credit intermediary;
- Non-tied credit intermediary; and
- Credit intermediary in an ancillary capacity.
Tied credit intermediaries and credit intermediaries in an ancillary capacity – which will include suppliers of goods and service providers – must enter an agreement with a creditor or a group of creditors, will act on their behalf and under their full responsibility and cannot receive any remuneration from consumers.
Non-tied credit intermediaries must enter into an intermediation agreement with the consumers and cannot receive any remuneration from the creditors.
The new rules will enter into force on 1 January 2018. Notwithstanding, any persons or entities that already carry out a credit intermediation activity on the date the new rules enter into force may continue exercising this activity, without an authorisation, for a period of 12 months. During this transitional period, the applicable conduct, information and assistance duties must be complied.
A recent amendment to the Water Law stipulates that multi-municipal systems are to remain under public control and may only be granted under concession to public owned or controlled companies, while municipal systems may be managed by public-private partnerships or by private entities. Consequently, and to this extent, Portugal remains partially open to international water sector private investors.
The new rule implies the reversal of the reorganization of the water sector that resulted in the merger of 19 multi-municipal systems into 5 large companies, initiated by Mr. Passos Coelho’s social democrat government. The current government intends to merge municipal systems serving less than 20.000 users and, for that purpose, maximize the use EU structural funds allocated to Portugal.
Portuguese multi-municipal water systems encompass the collection, purification and distribution of water and are connected to municipal systems which, in turn, link the multi-municipal systems to end users. In Portugal, the State is responsible for the multi-municipal systems and municipalities are responsible for the municipal systems. For a better understanding of the Portuguese water sector, please refer to our publication The Water Market in Portugal.
From 3 July 2017, the process of acquiring Portuguese nationality will be faster and more predictable.
The streamlining of the process is due to the measures introduced by Decree-Law no. 71/2017, of 21 June, namely:
- The attribution to the Central Registry Office (Conservatória dos Registos Centrais) of the possibility to conclude that the applicant has ties to the Portuguese community (previously, such competence was assigned to the member of the Government responsible for justice);
- The creation of presumptions of effective connection to the Portuguese community and knowledge of Portuguese language; and
- The waiver of presentation of the applicant’s criminal record of his country of birth or his country of nationality when the applicant has not lived there after completing 16 years.
As from July 2017, issuers, intermediaries and management entities will be subject to new rules arising from the implementation of directives relating to transparency requirements (Directives 2013/50/EU and 2007/14/EC), prospectus (Directive 2003/71/EC) and criminal penalties for market abuse (Directive 2014/57/EU and Implementing Directive 2015/2392).
The implementation was approved by Law no. 28/2017, of 30 May, which also amended the Portuguese Securities Code (Securities Code) in order to adapt it to Regulation (EU) no 596/2014 on market abuse (Market Abuse Regulation) and appointed the Portuguese Securities Market Commission (Comissão de Mercado de Valores Mobiliários - CMVM) as the competent authority to ensure the application of the Market Abuse Regulation in Portugal.
Among other changes, new administrative offences and crimes were added, some penalties were aggravated and some duties, requirements and limitations are now cross-referred with those established in the Market Abuse Regulation, including (without limitation) regarding investment recommendations, market abuse, inside information or managers’ transactions and duty to report suspicious transactions.
As an example of the aggravation of the penalties, in a case of market manipulation the maximum penalty increased from five to eight years of imprisonment if the relevant conduct causes an “artificial” change in the regular operation of the market.
For less serious administrative offences, the applicable fines increased from 2,500€ and 5,000€ to 5,000€ and 1,000,000€, respectively.
The statutes of limitation in the case of very serious administrative offences were also increased from five to eight years and the following ancillary penalties were added: (i) suspension of dealing on financial instruments for its own account and (ii) cancellation of registration or revocation of the authorisation for the exercise of functions in entities supervised by the CMVM.
In addition to these changes, greenhouse gas emissions allowances will also be subject to Securities Code rules. As a result, transactions involving these instruments and parties to these transactions will be subject to the supervision of the CMVM, as well as to the new sanctions contemplated in the Securities Code, starting as of 2 January 2018.
Finally, benchmark indexes and spot commodity contracts will also be subject to market manipulation prohibition set out in the Market Abuse Regulation and, consequently, to the supervision of the CMVM and the sanctions now contemplated in Securities Code.
As from today, 4 May, bearer securities will no longer be permitted in Portugal and any existing bearer securities must be converted into nominative securities within the next 6 months.
Pursuant to Law no. 15/2017, enacted today, terms applicable to the conversion of bearer securities into nominative securities will be defined under a specific regulation to be enacted within 120 days. In case this regulation is issued towards the end of this 120-day period, entities may, in practical terms, have less than 6 months to complete the required conversion.
Once the 6-month period has elapsed, transfer of bearer securities will not be permitted. In addition, rights of the holders of bearer securities to receive any dividends in respect of such securities will be suspended.
Bearer securities, such as, for example, bearer shares of a limited liability company, belong to whoever holds the relevant share certificate. Unlike nominative securities, the issuing entity is not able to identify to the owner of bearer securities nor to track transfers of ownership.
The prohibition of bearer securities now enacted aims at controlling and preventing money laundering and tax evasion by ensuring that ultimate beneficial owners of investments and assets may be identified.
The Portuguese Government has changed the feed-in-tariffs scheme aiming at eliminating the accumulation of public incentives for generation of renewable energies that has been allowed to this date.
Ordinance No. 69/2017, recently published, provides for the deduction of the subsidies received for the promotion and development of renewable energies when producers have cumulatively received other incentives. This way, producers shall also be forced return the funds already received. The list of producers covered by this ordinance and the amounts to be deducted or to be returned (if in the meantime producers cease to be entitled to the feed-in-tariff) will soon be published.
With its retroactive effects, this decision sets a new precedent in counter-cycle to the long stand police of regulatory stability in the Portuguese renewables’ sector. And, at a time when other countries like Spain are taking steps to relaunch their renewables market, this decision is, most likely, not helping to attract new renewables’ investment projects to Portugal, irrespectively of the bigger or smaller material impact it may have on those who will be effected by it, which is yet to be seen.
Almost a year after the signature of the Paris Agreement, a date has been set to come into force: November 4th 2016.
This agreement will become in effect 30 days after the date on which at least 55 members to the UNFCCC (United Nations Framework Convention on Climate Change) which together represent at least an estimated 55% of total global emissions of greenhouse gases, have deposited their instruments of ratification, acceptance, approval or accession.
Portugal has deposited its ratification instruments, after the Portuguese Parliament and the President of the Republic of Portugal having both approved and ratified, respectively, the Agreement, making Portugal one of the 55 countries required for its entry into force. In order to reach the goal of a sustainable development, strengthen the global response to climate change and eradicate poverty ambitious targets have been set.
The Paris Agreement aims to hold the increase in the global average temperature to well below 2°C and lower greenhouse gas emissions. Portugal, along with the E.U. Member States, committed to a binding target of an at least 40% domestic reduction in greenhouse gas emissions by 2030.