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Arbitration
Overview
Including: Arbitration Law; National Arbitration and International Arbitration; Arbitration Clause; Request for Setting up of Arbitral Tribunal; Process; Challenging the Award and Appeals - Equity; Recognition of Foreign Awards and Respective Enforcement; Recognition; Enforcement
A recent case arose from the disputed connection between three contracts, of which only the first included an arbitration clause; however, the third contract generally incorporated the first. The Supreme Court held that the temporal, functional and economic connection between the contracts made clear that despite the autonomy of the contracts, the arbitration clause in the first contract applied to the third.
Overview (June 2011)
Including: A decade of growth; Case law; New arbitration legislation.
Disputes concerning non-disposable rights cannot be arbitrated. However, the Lisbon Court of Appeal recently held that in such cases the invalidity of an arbitration agreement relates only to those rights which are absolutely non-disposable, not to those which are relatively non-disposable, such as rights that involve an economic interest.
The Supreme Court recently addressed the mechanisms available, under both arbitration legislation and the Code of Civil Procedure, to parties seeking to challenge an arbitral award. The decision is seen as favouring arbitration in general, but recommends amendments to the legal framework for challenging arbitral awards - a new draft law proposes an improved approach to a number of its shortcomings.
The Lisbon Court of Appeal has stated that agreements from which a dispute stems must contain arbitration agreements directly, rather than in a document to which the agreement signed by the parties refers. This goes against the court's usual trend of interpreting the law in line with international practice and theory.
The Supreme Court has held that an arbitral award under the New York Convention can be enforced automatically in Portugal without having been reviewed or confirmed. The court's conclusion - which is highly innovative internationally, let alone in Portugal - is open to debate, but undoubtedly marks a major change in Portuguese case law.
Asset Finance
The creation of a new high-speed rail network in Portugal, and the utilization of rail assets by private entities on a concession basis, constitutes an excellent opportunity for private investment. Compatibility between the infrastructure and the rolling stock is crucial, so as to obtain the best results in terms of performance, safety, service quality and costs.
The new legal framework governing rail assets that form part of the public domain has established new rules and investment possibilities, opening the door for deals involving assets which were formerly off-market. There is now a greater opportunity to conclude transactions such as cross-border leases and sale lease-back structures.
In Portugal, mortgages over factories can be extended to cover all machinery, equipment and other chattels pertaining to the factory, as long as the relevant assets are listed in the mortgage deed. This increases the value of the collateral while at the same time linking the security of the credit facility to assets that are essential for the company to carry out its activities.
Banking
The Bank of Portugal has issued a notice on the applicability to payment institutions of a number of previously issued regulatory notices. Among other things, payment institutions must comply with its notices on uses of own funds, provision for credit and other risks, the provision of client information and the requirement to prepare consolidated and non-consolidated financial statements.
The Council of Ministers has approved a legislative decree that transposes the EU Payment Services Directive into Portuguese law. In addition to defining the categories of entity that may provide payment services, the decree stipulates prudential requirements for such entities and requires them to guarantee the transparency of the conditions and information requirements relating to their services.
As a result of a new legislative decree, the legal framework governing banking practices for the granting and renegotiation of mortgages - which covers interest calculation, early repayment, associated sales and duties of information and disclosure - now applies to other loans secured by the same property.
A new legislative decree sets out the information duties of credit institutions that wish to link life insurance contracts to mortgages. It reinforces consumer protection measures by establishing the required minimum content of life insurance contracts that may be offered to persons seeking a mortgage.
The Portuguese legislature has once again reacted to the problems in the financial sector, introducing changes to promote the disclosure of information about board-level remuneration in public-interest entities, including in the banking sector, and tasking the Bank of Portugal to supervise the credit institutions' lending to certain borrowers.
The Bank of Portugal has published details of a regulatory initiative that would impose greater duties on credit institutions to disclose the list of fees and interest rates that they levy on products and services. A notice and instruction set out details of the information required and the manner of its presentation.
Capital Markets
Related party transactions between public companies are common. However, by entering into such transactions, an entity could affect the balance sheet of another, making it incur losses or profits in such a manner that would be impossible in a transaction with independent third parties. These transactions are at a crossroads in terms of applicable rules; however, the International Accounting Standards provide key guidance.
Recent developments in corporate governance
The Securities Market Commission allows companies to adopt an alternative governance code to its official code, provided that it meets high standards of transparency and investor protection. In light of this, the Portuguese Institute of Corporate Governance has put forward the first code of corporate governance originated by the private sector. This warrants a comparative analysis of both codes.
Commercial Property
Until mid-2007 the execution of a transaction involving the transfer or encumbrance of real estate was generally subject to the execution of a notarized public deed and the subsequent registration of the transfer or encumbrance at the office of the Property Registry. A new regime for urban properties combines the two requirements in a single process.
Company & Commercial
The Supreme Court was recently asked to decide whether a company may demand that another company with a similar name forfeit the right to use the name, even if such use has been accepted for a number of years. The Court of Appeals had found that the rights relating to a company name are analogous to trademark rights and had applied the same time limit for objections on this basis.
The signature on a promissory note of a partner in the capacity of manager (where such capacity is not stated in the Commercial Register) is not binding on the company - despite the production of minutes attesting to the fact that the partner was entrusted with the management of the company - if such minutes were not signed by another partner whose managerial capacity is recorded in the register.
The Companies Code provides that a private limited company is not bound by the signature of only one of its directors if its articles of association provide that the signatures of two directors are required to bind it, unless the company ratifies the action. However, a Supreme Court judgment has cast doubt on the safety of legal transactions by reversing an established view of directors' responsibility.
An amendment to the rules governing the Court of Auditors extends the scope of the court's financial supervision to include undertakings which hold a concession for public works and services and for the management of undertakings, state-owned companies and semi-public companies.
Significant changes to the Portuguese Companies Act have streamlined the procedure for amending company bylaws by doing away with the requirement for a notarial deed in many cases. The new administrative requirements make it easier for companies to increase or reduce their share capital.
Online Incorporation of Companies
A new system of online incorporation offers an immediate, cheap and convenient way to create and register a company. Even if the applicant chooses not to use one of the pre-approved templates for the articles of association, the process will take no more than two business days.
Competition
Overview
Including: Influence of EU Competition Law; Scope of Application; Presumption of Dominance; Abuse of Economic Dependence; Abuse of Economic Dependence; Merger Control; State Aid; Cooperation between Authorities; Increased Investigatory Powers; Increased Transparency.
In a recent preliminary ruling on a referral from the Lisbon Court of Appeal, the European Court of Justice clarified that a regulation adopted by the Portuguese Order of Chartered Accountants which implements a system of compulsory training for its members must be regarded as a decision of an association of undertakings and constitutes a prohibited restriction of competition.
Over the past 10 years, the filing of notifications triggered by ex officio proceedings has been a common feature of the Portuguese competition landscape. In contrast, the imposition of fines for failure to notify has remained rare. However, the Competition Authority recently imposed a significant fine on the National Pharmacy Association and two subsidiaries for implementing a concentration without prior authorisation.
The Lisbon Court of Appeal rendered a judgment which concludes a long antitrust probe directed against a vertical agreement related to the exclusive supply and distribution of hospital equipement entered into in 2005 by Baxter and Glintt. The decision sends an important message to the economic and legal community, in that resale price maintenance can still play a significant deterrent role in competition law.
Pharmaceutical sector under scrutiny
The Competition Authority's merger review process in a recent case leads to the conclusion that the Portuguese pharmaceutical sector incorporates several relevant markets, including contract sales outsourcing, health management services, brand management and wholesale supply of medicines. The case further illustrates the authority's sound knowledge of the pharmaceutical market.
Leniency reshaped: a breath of fresh air?
In numerous jurisdictions leniency has become an important investigative tool for competition authorities, but in Portugal the leniency regime has had a somewhat underwhelming performance in recent years. The reform brought about by the Competition Act should spark renewed interest in the leniency regime, bringing forth new opportunities.
In 2009 Portugal introduced electronic panels on motorways displaying fuel prices at neighbouring service stations to promote price competition in the sale of roadside fuel on motorways. In a recent report the Competition Authority examined the impact of the measure on motorway fuel prices and provided new recommendations for this specific market.
Construction
Overview
Including: Who is Qualified to Build?; Registration; Licence; Subcontracting; Contractor's Obligations; IMOPPI Supervison; Liability for Administrative Offences; Criminal Liability.
It is the owner's duty to verify whether works are in the agreed condition and free of defects before accepting them. As such, the inspection of the works is a right, but also a burden that the law imposes on the owner, since failure to carry out the inspection implies acceptance of the works without reservation. Inspection must occur within a reasonable period of time.
Price Revision in Works Contracts
Under Portuguese law, contractors can revise the price quoted in public works contracts in case of unforeseen changes to the circumstances on which the contract is based. A new regime extends the scope of this mechanism to private works agreements and public goods and services purchase agreements - a timely development, given recent increases in steel prices.
Corporate Finance/M&A
Leveraged buy-out finance structures
In a leveraged buy-out the acquisition is typically financed with debt collateralised (directly or indirectly) by the target's own assets. Although still highly restricted by the Portuguese legal framework's stringent rules on financial assistance, a leveraged buy-out may be structured in such way that there is no direct assistance from the target, thus avoiding the general prohibition rule.
Step-in right clauses in financing deals
Step-in rights are common contractual arrangements in finance deals, stemming from step-in clauses that grant lenders the right to intervene or 'step in' to ensure that key contracts are completed successfully. If a step-in clause is excessively burdensome for one of the parties, it is challengeable in court on the basis of breach of good faith and public order.
Corporate Immigration
New Immigration Law Simplifies Visa System
The new Immigration Law introduces a single visa for foreign nationals wishing to enter Portugal and apply for a residence permit, replacing the six types of visa under the previous regime. The law provides better terms for many applicants, including temporary and seasonal workers, the families of visa applicants and non-EU students, but imposes stricter penalties on employers of illegal immigrants.
Corporate Tax
A Constitutional Court decision on the retroactive application of tax law changes sends a clear message: as far as the principle of legitimate expectation is concerned, taxpayers' interests take second place to the interests of the public administration. Moreover, taxpayers have no legitimate right to expect that laws will not be changed.
A bank levy will be imposed on all credit institutions with a head office and effective place of management in Portugal, as well as subsidiaries of foreign institutions and branches of institutions with a non-EU head office. Doubts have been raised about the legality of the government order, but in the country's economic state of emergency, taxpayers' safeguards are more likely to be swept aside.
Until recently, Portuguese holding companies enjoyed significant tax benefits, including exemption for dividends received from controlled companies. However, changes introduced - but not adequately explained - by the tax authorities have shaken confidence and reinforced the impression that, in political terms, making a profit remains a sin. Many companies may decide that the Netherlands and Luxembourg offer better prospects.
The State Budget Law for 2011 has been presented and its proposals are under discussion. From a corporate tax perspective, apart from a few benefits granted to non-resident entities that finance economic activities in Portugal, the general purpose of the new regulations is to increase the tax base, which will mean a greater tax burden for companies.
Many experts have claimed that Portugal's grave economic position requires immediate and far-reaching measures. The government has sought to downplay the situation, but Parliament has recently discussed new measures on personal and corporate income tax law, value-added tax and stamp duty.
Recent weeks have seen intense debate over a plan to abolish the full tax exemption regime for capital gains derived from the sale of shares held by taxpayers for more than 12 months. Since the announcement, the argument has spread to the corporate tax treatment of capital gains and to the mutual funds regime, while a Constitutional Court decision has shed significant light on the retroactive application of tax legislation.
E-commerce
Keeping Electronic Communications Private
Law 41/2004 brings the Portuguese legal framework into line with the EU Directive on Privacy and Electronic Communications, which reiterates the principle of confidentiality of electronic communications. Among other things, it introduces a mechanism for cooperation between electronic communications service providers, in order to ensure the security of services and of the network.
A new decree law has amended the Portuguese legal framework governing digital signatures in an attempt to harmonize it with EU regulations. The changes will incur additional short-term costs for companies, but should ultimately boost public confidence in the use of e-commerce and electronic communications.
Employment & Labour
Overview
Including: Legislative Framework; Types of Employment Contract; Termination of Employment Contract; Remuneration; Working Time.
New Temporary Work Regime
The new and eagerly awaited regime on temporary work has now been approved. It regulates the licensing and operation of temporary work agencies, as well as the contractual relationships between temporary workers, temporary work agencies and user companies.
The recent State Budget Law has introduced measures to encourage companies to recruit employees on permanent contracts. However, employers often overlook other incentives and benefits which are aimed at encouraging them to employ long-term unemployed people, disabled people, first-time job seekers and other people who are at a disadvantage in the labour market.
New Mediation System for Employment Disputes
The Labour Mediation System - the result of a protocol between the Ministry of Justice and various employers' and trade unions' associations - offers an alternative means of resolving litigation issues arising from employment relationships. A one-year trial of the system has begun in Lisbon and Oporto.
Reform of Unemployment Benefit Regime
In line with the reforming trend towards the redefinition of social protection schemes, the legal regime for unemployment benefit has been revised. New measures affect aspects including entitlement in the event of termination by mutual agreement or dismissal with just cause, the search for a convenient position and early access to old-age pensions.
Hiring Employees: Rules and Limits
Employers are free to choose whichever method of candidate assessment they prefer. However, the Labour Code lays down guidelines and orientations with respect to certain aspects of recruitment and employment, including the advertisement of a position, medical examinations of employees and the confidentiality of personal information.
The Labour Code includes a provision which clarifies the uncertainties which frequently arise in assessing the duration of the probationary period for new employees. It identifies periods during which there is no effective provision of work, defining cases where such periods count towards the probationary period and those where they interrupt and temporarily suspend it.
Energy & Natural Resources
Overview
Including: National Energy Strategy; Independent Regulatory Body; Quality of Service; Co-generation; Low-Voltage Facilities; Renewable Energy; Petroleum By-products and Natural Gas.
New Legislation for Natural Gas Markets
The Council of Ministers recently adopted two decree laws on the implementation of a national natural gas system. The measures revise the corporate structure of the energy sector and its public service concessionaires, introduce new pricing mechanisms and address the issue of security of supply.
The Portuguese government has put in place a series of incentives and measures to encourage investment in renewable energies, and the sector is developing as a result. However, it will be extremely difficult to meet the country's renewable energy targets if the licensing procedure is not made more flexible by dismantling bureaucratic hurdles.
After successive advances and setbacks, Portugal and Spain have signed an agreement setting up the Iberian Electricity Market (MIBEL). Government authorities hope that end consumers will be the greatest beneficiaries of an open market, which should result in better electricity services, lower prices and higher supply guarantees.
Regulatory Update
Two recent decree-laws recognize that the Portuguese Electricity Regulation Framework must continue to evolve in order to adapt the national electricity system to a market regime which is open to competition. To this end, they set out the conditions for the commercialization, import and export of electricity within a market regime.
Energy Sector Undergoes Overhaul
The government recently set out its new energy strategy. The programme has several ambitious objectives which aim to make the national sector more dynamic and efficient. The privatization of the leading Portuguese player in the petroleum and gas markets is also continuing.
Environment
Overview
Including: Key Principles; Basic Law on the Environment; Environmental Impact Assessment Law; Law on Non-governmental Environmental Organizations; Instruments of Protection.
New Framework for Emissions Trading
A new decree-law has changed Portugal's legal framework for the enactment of the EU emissions trading scheme. Accompanying legislation created the Portuguese Carbon Fund, which will manage the country's applications for emission credits and monitor its compliance with its Kyoto Protocol obligations.
Law 58/2005 establishes a new institutional framework for water management policy in Portugal. The aim of the new law is to provide the means for the sustainable management and protection of water resources. Its measures are to be implemented by regional water management authorities administering territories based on Portugal's river basins.
A new decree-law regulates the introduction and cultivation of genetically modified organisms. The main purpose of the legislation is to make the biotechnological advances of the past decades compatible with the preservation of the environment, in particular Portugal's indigenous species, and of the country's natural agricultural resources.
The National Programme for Efficient Water Use, recently approved by the Council of Ministers in Resolution 113/2005, is intended to protect the environment, minimize the risk of water shortages and protect water as a vital industrial, economic and natural resource. It incorporates or implements both national and European legislation, including the EU Water Framework Directive.
The Challenge of Effective Waste Management
Waste management has become one of the country's major concerns and is widely regarded as an urgent matter. It is hoped that the implementation of an integrated system of waste management will facilitate the swift adoption of adequate waste re-use and recycling procedures, with a view to reducing the quantity and toxicity of waste.
New Regulations for Hazardous Waste Centres
A recent decree-law provides for the creation of hazardous waste centres, and sets forth the licensing procedure for their installation and operation. It aims to ensure that the entities which are awarded permits have the capacity to install and operate the hazardous waste centres - a significant concern, given the environmentally sensitive nature of these centres.
Insurance & Reinsurance
As a result of two recent changes, the tax regime on insurance contracts under the EU free provision of services appears to have become more advantageous than the regime applying to contracts under Portuguese law. However, fiscal issues are rarely so simple in Portugal and taxpayers must consider the procedures required to make taxation effective.
Intellectual Property
Overview
Including: Patents, Utility Models and Topographies of Semiconductor Products; Designs and Models; Trademarks; Company Names and Logos; Copyright.
The government has finally enacted amendments to the Code of Copyright and Related Rights and the Industrial Property Code to transpose the EU Enforcement of IP Rights Directive. Although silent on certain problems, such as the need to train magistrates on specific industrial property issues, they include helpful measures, such as the right to apply for periodic penalty payments against infringers.
In 2006 the government created a fast-track system for purchasing registered trademarks as part of its programme to simplify company registration. The system now allows applicants to purchase a pre-registered trademark without incorporating a company, but may limit the potential value of a trademark as a marketing tool.
Court of Appeals Rules on Trade Names
The Lisbon Court of Appeals was recently asked to rule on, among other issues, the correct interpretation of the term 'trade name'. Some experts maintain that the expression covers not only an establishment's trade name (ie, its brand name or logo), but also its corporate name.
The publication in a magazine of the ending of a popular book led the Portuguese Authors' Society to sue the magazine publisher for copyright infringement and damages for loss of sales. The Supreme Court accepted the publisher's fair use defence in respect of infringement, but changes to the Copyright Code to protect the normal exploitation of a work will give rights holders a stronger case in the future.
The National Registry of Legal Entities has registered hundreds of trademarks, which are now available to any person wishing to incorporate a company and register the company name as a trademark under a new fast-track system. However, for all its advantages of time and cost, granting trademarks in this way may suggest that registration is immediately definitive, which is far from the case.
A recent decision to file criminal complaints against unidentified individuals for sharing music files was the first such action to be taken against peer-to-peer network users. The outcome of the investigations will clarify whether a person who allows others to download copyrighted material is breaking Portuguese law, but broader questions remain over the recording industry's approach to copyright issues.
Litigation
Portugal has an extensive network of highways, some of which are managed by public limited companies under concession contracts executed with the state. A recent decision centred on the potential liability of these companies in the context of an accident. However, the decision appears to be fairly partial and a degree of prejudice during the trial was evidenced.
Absence or Irregularity of Power of Attorney
Under the Code of Civil Procedure, failure to produce a power of attorney has catastrophic consequences: it is treated as though the party did not intend to defend itself and the defence is duly withdrawn. However, this appears to contradict other provisions of Portuguese law and may also be unconstitutional.
Enforcement Proceedings are Reformed
A new decree-law has substantially overhauled enforcement proceedings in Portugal. It is hoped that the entry into force of the new regime in September this year will mark a turning point and will help to ease the administration of justice.
Recording of Court Proceedings
The option to record evidence presented to a court of first instance is necessary in order to protect the rights of citizens who have recourse to the judicial process, as it permits reconsideration of the facts by a court of appeal. It also speeds up court proceedings, which leaves assistant judges free to try other cases.
State is Penalized for Failure to Legislate
A Portuguese court recently handed down a landmark judgment against the state for failure to legislate. It awarded damages of approximately €600,000 to the parents of a child who was sucked into the pipes of a swimming pool at a water park, because had such facilities been properly regulated by the state their son’s death could have been prevented.
New Law Creates Courts of Peace
Courts of peace have been created to resolve minor disputes by assisting the parties to reach agreement through a simple, informal, oral procedure. Small claims and minor cases will be diverted to these new institutions. This will enable the first-instance trial courts to hear more significant cases with greater thoroughness and efficiency.
Media & Entertainment
Portugal's legal framework for games of chance came under scrutiny in 2009 as a result of a dispute involving the state-controlled lottery organizer, the Portuguese Professional Football League and gaming company Bwin International, which became the league's sponsor in 2005. Although the dispute arose over sports betting, the European Court of Justice's ruling on online gaming may have wider implications.
The European Court of Human Rights has issued its judgment in a case involving the penalties imposed on a Portuguese journalist in connection with his interview with a senior football official. The appeal by the journalist and his television channel under Article 8 of the European Convention on Human Rights prompted an examination of the freedom of expression, the role of the press and the rights of public figures.
Projects & Procurement
Road Concessions Cast a Long Economic Shadow
A change in policy early in 2007 led to a decision to convert three of the country's seven shadow toll roads into conventional toll roads. The two concessionaires affected are still in negotiations with a government-appointed commission, and the policy decision will influence 10 concession agreements - due to be concluded by 2011 - for a further 680 kilometres of roads under the road-building programme.
Two major transport projects, the Lisbon to Oporto high-speed rail link and a new international airport, seemed close to approval earlier this year, but although both projects are due to start in 2008, the minister of public works may be considering an alternative location for the airport. The government has also announced plans to introduce public-private partnerships into the prison system.
The decree-law which sets out the legal framework for public-private partnerships (PPPs) was recently reviewed and amended. A revision of its scope of application has defined the types of entity which may be involved and the types of contract which may be governed by PPP rules.
The Audit Court monitors the legality of the most significant public contracts, such as public works agreements, public services concession agreements and public works concession agreements. Recent amendments to its legal framework will affect public works concessionaires and municipal public companies, which will now be required to deliver accounts to the court at least once a year.
A new decree law introduces several changes to the state's intervention in the design, tendering, awarding, monitoring and modification process of public-private partnerships (PPPs). The government has acknowledged the need to improve the financial control mechanisms required to set up PPPs, and to reinforce the interconnection of the public bodies involved in preparing and monitoring them.
Private Finance to Keep Projects on Track
Earlier in 2005 the Portuguese government announced the continuation of a number of major infrastructure projects approved by the previous administration. The largest of these is the construction of a high-speed railway; it is expected that the budget will largely be supplied by private sources, using project finance schemes which will involve granting concessions in the operation of the completed system.
Securitisation & Structured Finance
The government has recently enacted a new covered bonds regime. The measures are intended to expand the portfolio of eligible underlying assets, regulate the creation of special purpose vehicles and establish a regime for the assignment of mortgage or public sector receivables in connection with the issuance and management of covered bonds.
Shipping & Transport
Portugal has no statutory regime dealing with piracy, either under civil or criminal law. This could cause practical difficulties for a court where, for example, it is required to deal with the consequences of a Somali pirate attack off the Somali coast which is thwarted by a Portuguese warship. In such cases a Portuguese judge's scope of action would presumably be severely limited.
The Lisbon Court of Appeal has confirmed a first instance ruling that an agreement between a shipowner and a ship agent - and any disputes arising from termination of the agreement - are matters of maritime commercial law. The dispute in question fell to be resolved exclusively by the maritime court.
A recent order of the Lisbon Admiralty Court may have paved the way for the arrest of associated ships and piercing the corporate veil in arrest cases. The judge allowed the arrest of associated ships, owned by a company within a group, in connection with a claim relating exclusively to other group companies and to ships that the latter companies owned (or would have owned under the contract in dispute).
A recent report on maritime economic activity has given rise to several proposals to support sea carriage and shipbuilding. In addition, a change to the ranking of priorities for claims in favour of mortgagees will help to improve the competitive position of the Portuguese fleet, while a draft navigation law is likely to facilitate ship arrest in Portugal.
Many owners and insurers of vessels operating in the Portuguese jurisdiction, calling at Portuguese ports or sailing in Portugal's coastal waters are unaware of the importance of presenting a sea report following an incident at sea if damages or compensation may be sought in proceedings in Portugal. Potential claimants and defendants are well advised to follow and intervene in the inquest to confirm such a report.
New legislation has changed the ranking of priorities over Portuguese-flagged ships in favour of mortgagees. Most newbuilds and purchases of ships in service are financed by banks or leasing companies that require owners to flag their vessels in mortgagee-friendly jurisdictions; the recent change aims to halt a 20-year decline in the numbers of Portuguese ships and shipowners.
Telecommunications
Overview
Including: Market Liberalization; Legal Framework; Major Players; Opportunities for New Entrants; Licensing Regime; Interconnection; Competition Issues; Universal Service; Numbering; Regulatory Authorities and their Powers
ANACOM Consults on VoIP Regulations
Since March 2005 several Portuguese telecommunications operators have provided Voice over Internet Protocol (VoIP) services. ANACOM, the Portuguese telecommunications regulator, has now launched a public consultation on their regulation; the growth of the new technology has implications for numbering resources and operators' universal service obligations.
A decision of ANACOM, Portugal's domestic telecommunications regulator, regarding pricing and cost orientation on mobile networks was recently challenged in the courts by one of Portugal's three mobile operators, even though the operator in question may benefit from temporary positive price discrimination. This is the first case against the regulator which challenges its market analysis procedures.
ANACOM, Portugal's domestic telecommunications regulator, has recently been one of Europe's most active national regulatory authorities in analyzing and imposing obligations on product and service markets within the electronic communications sector. Since July 2004 it has analyzed 12 out of 18 markets identified by the European Commission as requiring market analysis and ex ante regulation.
Implementation of New Fee Proves Troublesome
The municipal fee for rights of way is being implemented. The fee was introduced by the Electronic Communications Law, which establishes that certain rights and levies of telecommunications operators at fixed locations may be subject to a fee. Unfortunately, to date, the new regime has proved problematic.
The government has approved a legislative proposal which would afford law enforcement agencies unlimited access to traffic data processed by communications and electronic communications operators. The proposal has come under fire as it would disproportionately increase the costs of telecommunications operators and severely endanger citizens' right to privacy.
Rights of Way Tax Finally Approved
Several months after the deadline established by the Electronic Communications Law, the Portuguese telecommunications regulator has finally approved a regulation setting out the procedures for the collection and delivery to municipalities of the new rights of way tax.
Trade & Customs
Originally established as an area for the duty-free importation of goods, the Madeira Free Trade Zone is now also an international centre for shipping and offshore financial services and trusts. If approved by the Portuguese Parliament, an extension of the zone's tax regime will allow companies incorporated in the zone before 2014 to benefit from favourable corporate tax rates until 2020.
White Collar Crime
The Criminal Procedure Law imposes limits on searches and seizures in places subject to professional secrecy, such as law offices, medical offices and banks. However, these searches have become routine in too many criminal investigations and are being used as an easy means of gathering evidence.
The Council of Ministers has announced the approval of two proposals to amend both the Penal and Criminal Procedural Codes. The proposals will now be submitted to Parliament for discussion and approval. The most significant – and also most controversial – proposed change to the Penal Code relates to the duration of the suspension of the statute of limitations, which has been greatly increased.
Plans to introduce a new crime of illegitimate wealth into the Penal Code have been delayed by the Constitutional Court. Among other things, it held that the proposed amendment to the code would violate the principle of the presumption of innocence, as a discrepancy between a person's wealth and that person's legitimate income and assets would be presumed to be illicit.
New crime targets illegitimate wealth
A new amendment to the Penal Code may provide a crucial mechanism for preventing corruption, targeting all assets in Portugal or abroad and forcing individuals and companies to provide a full picture of their accounts to the tax authorities. However, doubts remain over whether the new provisions are constitutional.
