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New regulation to empower the Competition Authorities: Legislative proposal no. 99/XIV/2 was submitted this year. It implements Directive (EU) 2019/1 that aims to empower the competition authorities of the Member States to be more effective enforcers and ensure the proper functioning of the internal market. This new framework will amend the current Competition Legal Framework (Regime Jurídico da Concorrência) and the Competition Authority Statutes (Estatutos da Autoridade da Concorrência), to ensure that the Portuguese Competition Authority has additional guarantees of independence, as well as the power to investigate and decide on fines.
Discussions in Parliament are still continuing, although the Government is intending to accelerate approval of this proposal. Due to the vacatio legis provided for most of the provisions, we can expect this new framework to be fully in force in 2022.
Credit Servicers, Credit Purchasers and the Recovery of Collateral Directive: In 2018, the European Commission presented a proposal for a directive to develop secondary markets for non-performing loans (NPLs) by removing restrictions to the transfer of NPLs by credit institutions to non-credit institutions, while at the same time safeguarding consumer’s rights. This proposal also intends to increase the efficiency of debt recovery procedures by creating a new framework for extrajudicial enforcement of claims. The proposal was recently approved and was published on 28 November 2021. We can expect developments and discussions during 2022, considering the directive must be implemented by Member States in 2023.
New framework for banking activity on the horizon: In April 2021, the Portuguese Banking Regulator (Banco de Portugal) issued a final report containing the conclusions of the public discussion on the draft of the Banking Activity Code. The Code aims to substitute, systemise and update the former Legal Framework of Credit Institutions and Financial Companies (Regime Geral das Instituições de Crédito e Sociedades Financeiras), as well as implement the EU “Banking Package” Directives (CRD V and BRRD II) and (partially) the Directive on the prudential supervision of investment firms.
The Portuguese Ministry of Finance is examining the draft and we may expect it to be presented and discussed in Parliament in 2022.
Implementation of the EU Collective Redress Directive: Directive (EU) 2020/1828 represents a significant milestone for the development of representative actions to protect the collective interests of consumers. This Directive aims to ensure that consumers have access in all Member States to at least one injunctive and redress measure, and establishes rules to guarantee that the respective proceedings mechanism is efficient and effective, including in cross-border situations.
Member States will have to implement the Directive into their national laws by December 2022.
Implementation of the Transparent and Predictable Working Conditions Directive: Directive (EU) 2019/1152 sets out the minimum rights that every worker in the EU who has an employment contract or employment relationship is entitled to. The Directive sets forth important rules regarding the maximum duration of the probationary period, parallel employment, minimum predictability of work, on-demand contracts, transitions between forms of employment, mandatory training, and collective agreements, as well as information obligations and other procedural amendments. Member States must implement this Directive by August 2022.
New framework for the National Electric System (NES): A new draft for the organisation and operation of the NES is currently under public consultation. The main objective is to ensure the NES is ready for the new challenges imposed by the Portuguese climate neutrality target for 2050. It also implements EU Directives 2019/944 and 2018/2001 which entail major changes to the regulatory framework. The key topics in this draft legislation include (i) the administrative control of NES activities, (ii) network planning, (iii) the introduction of competition mechanisms for NES’s activities, (iv) the participation of consumers in energy production and in the consumer markets, and (v) the improvement and increase of new developments such as repowering, hybridisation and storage, which are key in complying with targets and tackling grid scarcity. The deadline for feedback to the consultation closes soon and new developments are expected in 2022.
European Green Deal - The “Fit for 55 Package”: On 14 July 2021, the European Commission published its “Fit for 55” package to help the EU meet its climate targets. It encompasses a suite of legislative initiatives across various sectors, including energy, transport and construction, and fundamentally overhauls the EU’s climate policy framework with the aim of putting the EU on track to reach its 2030 climate target of 55%. 2022 should also bring important legislative initiatives at EU level on, among others, emissions trading systems (ETS), energy taxation and efficiency, and renewable energy. These will result in changes to the Portuguese regulatory framework.
EU sustainable finance package: In April 2021, the European Commission adopted a comprehensive package to support greater investment in sustainable activities. This is an instrumental measure to make Europe climate neutral by 2050. This package comprises (i) a EU Taxonomy Climate Delegated Act, that clarifies which economic activities most contribute to meeting the EU’s environmental objectives, (ii) a proposal for a Corporate Sustainability Reporting Directive, that aims to improve the sustainability information of companies while making it clearer and more accessible to the public, and (iii) six amended Delegated Acts on fiduciary duties, investment matters and product governance rules, with a view to guarantee that financial firms include sustainability in their procedures and their investment advice to clients. These new frameworks are expected to come into force in 2022.
Implementation of the Directive on Copyright and Related Rights in the Digital Single Market: Directive (EU) 2019/790 of the European Parliament and of the Council, of 17 April 2019, concerns copyright and related rights in the Digital Single Market and amends Directives 96/9/EC and 2001/29/EC. The deadline for the implementation of this Directive was 7 June 2021 and the law proposal is currently awaiting public consultation in Parliament.
Revised framework for cross-border conversions, mergers and demergers: Directive (EU) 2019/2121 represents a significant step in harmonising company law and cross-border company mobility in the EU.
Substantial changes in Portuguese legislation are expected with the inclusion of the cross-border conversions and demergers frameworks, as well as amendments to the current cross-border mergers framework. The Directive introduces relevant procedures for regulating the frameworks, mainly in relation to shareholders, employees and stakeholders.
Although the deadline for implementation is January 2023, discussions are expected to begin in 2022.
Implementation of EU Preventive Restructuring Directive: Legislative proposal no. 115/XIV/3, that aims to implement Directive (EU) 2019/1023, was recently submitted to Parliament. Several amendments to the Portuguese Insolvency and Company Recovery Code (Código da Insolvência e da Recuperação de Empresas) are expected, including in the legal framework of special revitalisation (PER) and insolvency proceedings.
Besides the impact that this will have on restructuring and insolvency matters, this proposal will also make changes to the Portuguese Companies Code (Código das Sociedades Comerciais). These concern the inapplicability of certain frameworks during any corporate restructuring proceedings provided in the Portuguese Insolvency and Companies Recovery Code. According to the proposal, the following provisions shall not apply in the context of such corporate restructuring proceedings: (i) the regime applicable to the subcapitalisation scenario, (ii) the requirements for the share capital increase, and, in particular, (iii) for the share capital increase by incorporation of reserves, as well as some provisions regarding the reduction of share capital, mainly the requirements for (iv) the calling of the general assembly, (v) the resolution, and (vi) the protection of creditors regime.
This proposal may be subject to changes as a result of the public discussion and voting in Parliament. We can expect a new framework to be in force in 2022.
Implementation of the EU Whistleblowing Directive: Directive (EU) 2019/1937 on the protection of persons who report breaches of Union law is due to be implemented by December 2021. The corresponding law proposal no. 91/XIV/2 was recently submitted.
The new framework enhances protection of whistleblowers who report or publicly disclose a breach. Consequently, companies with more than 50 employees will be required to introduce or update their internal reporting channels through which persons with a working relationship to the company can report on breaches.
We expect further developments before the framework comes into force.
Implementation of the European Electronic Communications Code Directive: Directive (EU) 2018/1972 of the European Parliament and of the Council, of 11 December 2018, aims to review the legal framework applicable to electronic communications. The deadline for the implementation of this Directive was 21 December 2020, the Portuguese Government having approved a draft proposal of law, which is now pending approval in Parliament.