Legal Flash: What to expect in 2022?

Banking and Finance: One of the most significant legislative changes in the banking and finance sector in recent years is expected: the draft project for the Banking Activity Code, replacing the current Legal Regime of Credit Institutions and Financial Companies. Changes are also expected to the regime for covered bonds and adherence to the Legal Regime of Participative Loans, approved in late 2021.

Corporate: Several legislative developments were passed in late 2021 that will be implemented in 2022. In the 2021 proposal for the distribution of profit and loss, companies must consider whether they are prohibited from distributing profit during the term of the obligations arising from the granting of extraordinary aids due to the COVID-19 pandemic. The registration of the appointment of managers and directors became subject to the appointed manager or director submitting the corresponding letter of acceptance. The creation of an online registry for permanent representations (branches) of foreign limited liability companies was also approved.

Restructuring and insolvency: In early January, measures to support and speed up corporate restructuring processes and repayment agreements were approved, including the additional protection conferred to the financing of business activity during recovery.

Capital Markets: The Portuguese Securities Code was changed on December 31, 2021, introducing significant changes to several regimes, both for listed companies and for public offerings.

Contracts: As with insolvency, the approval of measures to support and speed up corporate restructuring processes and payment agreements annulled contractual clauses that attribute to the special process of revitalization (PER, in its Portuguese acronym) the value of a condition subsequent for the business, or that grant, in this case, the other party the right to compensation or the right to terminate the contract.

M&A – Foreign Direct Investments: In this field, developments are expected from the Portuguese authorities relating to the Foreign Direct Investment EU Screening Regime and potential amendments to Decree-Law 138/2014, expanding scrutiny to other economic activity sectors and introducing procedures for the exchange of information and collaboration with Member States and the European Commission.

Investment Funds: The investment fund industry awaits the new Asset Management Legal Regime, which will replace the current regulations applicable to investment funds.

Energy: The entry into force of the regime for the organization and functioning of the National Electricity System is one of the main developments in 2022. It came into force on January 15.

Real Estate: One positive development for 2022 is the simplification of real estate transactions. The changes to the regime for granting the investment residence permit will also be consolidated in 2022, prioritizing the acquisition of residential property in the country’s interior and islands. As of March, lawyers will have to send the Bank of Portugal information on public deeds, notarized private documents, or documents with a notarized signature in which they are involved and which fall under certain contracts.

Insurance: The recent pan-European personal pension product (PEPP), which is established by a European regulation and which aims to improve crossborder portability and make it easier to change providers, is expected to be fully implemented in Portugal. The Portuguese Insurance and Pension Funds Supervisory Authority (ASF) is also expected to publish a significant set of regulatory standards pertaining to market conduct and the processing of claims, the governance of insurance and reinsurance companies, and the security and governance of information and communication technologies.

Consumption: On January 1, the new consumer protection law entered into force, significantly changing the regime applicable to the sales and guarantees of goods and introducing the concept of digital contents and services. Directive (EU) 2019/2161 of the European Parliament and of the Council of November 27, 2019 (commonly known as the Omnibus Directive) was also partially transposed and will enter into force in May, changing several regulations on general contract clauses, pricing, commercial practices with price reductions, unfair commercial practices, and remote contracts. The Digital Services Act is also expected to be approved in 2022. This will supplement and modernize the regime currently regulated by the Electronic Commerce Directive.

Data Protection: In 2022, the ePrivacy Regulation is finally expected to be approved, regulating privacy and the protection of personal data in electronic communications. The European Parliament and the Council recently reached a political agreement on the text of the Data Governance Act, which will facilitate the reuse of protected public sector data and create new regimes for data intermediation and altruism purposes. The Whistleblowing Directive, which aims to protect individuals reporting breaches of Union law, will also come into force in 2022.

Public and Environmental Law: In 2022, licenses, authorizations, and administrative acts will be simplified, and services will be decentralized, reopening the discussion on regionalization. In environmental matters, legislative changes are expected that will support carbon neutrality and government investment in the creation of hydrogen refueling stations.

Criminal: Measures within the National Anti-Corruption Strategy were approved in late December 2021. The regulation also establishes specific measures to implement internal compliance mechanisms. In June 2022, the law transposing the Whistleblowing Directive will come into force, establishing new obligations for companies, specifically the implementation of internal whistleblowing channels to enable companies to receive and process complaints.

Tax: The Proposed State Budget for 2022 presented by the government makes it impossible to have any certainties regarding new tax developments in 2022. Even though the Socialist Party won the election and the government is expected to continue with its policies, the fact that this victory is based on a clear parliamentary majority, free from coalitions and compromises with left-wing parties, will make it easier to thoroughly reword the Proposed Budget, which is likely to be more favorable to investment and business. At the international level, in 2022, the European Union is likely to materialize the International Agreement on minimum taxation for multinationals, which is expected to come into force in early 2023.

Intellectual Property, Telecommunications, Media, and Technology: The Artificial Intelligence Act is expected to be approved in 2022, introducing harmonized rules in the European Union for marketing, commissioning, and using AI systems. Also, new legislation aimed at transposing into Portuguese law the European Electronic Communications Code is currently being approved by the Assembly of the Republic. The NIS2 Directive, which provides measures to reinforce cybersecurity in the European Union, is also expected to be approved. Directive 2019/790/EU should also be transposed into Portuguese law in 2022. Significant changes to the Code of Copyright and Related Rights are also expected.

Competition and European Union Law: Several significant changes are expected in 2022, including the review of the General Block Exemption Regulation, which applies to vertical agreements; and the R&D Agreement Regulation, which applies to horizontal agreements. The review of three Commission communications/guidelines is also expected. The new Digital Markets Act is also expected to be approved. At the national level, the ECN+ Directive is expected to be transposed into Portuguese law. It will also be interesting to see how the most recent change to the Portuguese Competition Act, which will significantly affect the tourism industry, will be implemented in practice. The pre-control merger procedure merger control procedure will be simplified through the use of new notification forms, which have already been approved.

Labor: Companies that intend to implement remote work in 2022 must adjust their practices to the new legal regime for remote work. The creation and regulation of whistleblowing channels will pose new challenges for companies, as well as the creation of talent retention policies and plans, and plans for managing the impact of the pandemic. With the Socialist Party’s victory in the latest election, one of the labor measures is expected to be legislative changes to the Agenda for Dignified Work.

Health: New legislative developments are expected regarding two significant paradigm shifts that already took place in the sector, in May 2021 and January 2022, respectively: the implementation of the Medical Device Regulation and the new European Clinical Trials Regulation. The regulation of surrogate pregnancy is also expected. The dynamic activity and pace of the medicinal cannabis market is also expected to continue. The new changes to the industrial cannabis regime, approved in January 2022, indicate that there are growth opportunities for this sector in Portugal.