What to expect in 2022: Key legal issues for companies

Key points

> Recovery and Resilience Plan. We expect an addendum to the Recovery Plan enabling the mobilization of credits provided for in the allocation to Spain, and the approval of new Strategic Projects for Economic Recovery and Transformation (known as PERTE) to develop the Spanish language, the care economy, the aerospace industry and the agri-food chain.

> Companies. Companies must take into account (i) the possibility of regulating online shareholders meetings in the bylaws, (ii) potential restrictions on dividend distribution, and (iii) the introduction of measures aiming to strengthen digital technology to award acts and business and to encourage innovative startups.

> Restructuring and insolvency. The approval of the draft bill amending the Insolvency Act will bring about a significant change to early restructuring transactions, which can benefit from pre-insolvency instruments providing greater speed and flexibility, and that will also enable the sale of production units.

> Environmental, social and corporate governance (ESG). The future act on waste and contaminated land will restrict the consumption of single-use plastics, introduce new taxes on non-reusable plastic packaging and waste disposal, and impose new obligations regarding contaminated land. The EU taxonomy is moving forward and expanding to new sectors. Likewise, international and EC measures will likely be adopted to improve the comparability of sustainability reports and to develop a EU standard on corporate due diligence and accountability to mitigate the impact of companies on human rights and the environment.

> Capital markets. The draft bill regulating the securities market and investment services and its three implementing regulations are still being processed. Among others, the draft bill aims to develop the regime applicable to special purpose acquisition companies (SPAC). In 2022, we also expect the approval of the first stewardship code for listed companies.

> Financial regulation. The EU will soon launch three new regulations: (i) the Digital Operational Resilience Act (DORA), (ii) the regulation on markets in crypto assets (MiCA), and (iii) the regulation on a pilot regime for market infrastructures based on distributed ledger technology. In Spain, it is envisaged that (i) the draft bill on the creation and growth of companies will adopt new measures regarding venture capital and alternative investment, and (ii) the amendment of the Regulation implementing the Act on Collective Investment Undertakings will be approved.

> Agreements. The rebus sic stantibus clause stands to become the main legal instrument to rebalance contractual relationships affected by the challenges facing the economy in 2022. The Court of Justice of the European Union (CJEU) will rule on the dies a quo to calculate the statute of limitations for bringing return proceedings linked to the declaration of contractual invalidity.

> Consumer contracts and relations. Companies that market retail products and services need to be aware of significant amendments affecting consumer contracts and relations that extend consumers rights, which entered into force on January 1, 2022, and those that will come into force on May 28, 2022.

> Real estate and urban planning. The future act on the right to housing could have a significant impact on the sector, as it introduces rent ceiling systems, it penalizes owners of vacant housing, it broadens the concept of person in a situation of vulnerability in procedures for the suspension of eviction and it increases the reserve for protected housing. The plenary session of the General Council of the Spanish Judiciary has recently rejected the first report on this draft bill.

> Foreign investments. The projected Regulation on Foreign Investments is expected to provide greater legal certainty with regard to requesting prior authorization for foreign direct investments by investors resident in countries outside the European Union and the European Free Trade Association (EFTA), as it helps define strategic sectors and investments subject to it based on the investor profile.

> Competition. The most significant changes in 2022 stem from a wave of reforms of regulatory and legal instruments in Europe (with the review of the regime applicable to vertical and horizontal agreements, and the implementation of the Digital Markets Act) and Spain (with the new reform of the Spanish Antitrust Act and the Antitrust Regulation), and from the adoption of notices requiring action from the European Commission (on the definition of relevant market for the purposes of EU competition law) and the Spanish Markets and Competition Commission (on hearings held before the Council and on the quantification of damages resulting from the infringement of competition rules).

> Tax. The General State Budget Act has introduced a minimum taxation on corporate income tax for tax periods beginning in 2022. For practical purposes, this will affect companies and tax groups seeking deductions for investments and business activities. Also, 2022 is likely to bring about regulations giving legal effect to the international agreement on the minimum effective tax rate for the global activities of large multinational groups, due to come into force in 2023.

> Employment. Companies must continue to manage the impact of the pandemic on labor relations, risk prevention, remote working, vaccination and data protection, and make any adjustments required due to certain events. This may involve extending temporary redundancy plans (ERTE) or even implementing new restructuring measures. At the same time, the recent labor reform has introduced significant amendments requiring companies to adapt the management of their labor relations to the new regulatory framework.

> Intellectual and industrial property, and audiovisual services. Laws on brands, industrial design and patents are expected to be amended through a law reform which is currently at the preliminary draft stage.

> Civil litigation and arbitration. The “2030 Justice Plan” is moving forward with three draft bills (on Organizational Efficiency of the Public Service of Justice, Procedural Efficiency, and Digital Efficiency), which will entail major changes in the area of justice at every level.

> Criminal litigation. The European Public Prosecutor’s Office, a supranational authority in charge of conducting criminal investigations and bringing to judgment crimes against the EU budget, will begin operating in 2022. The European Public Prosecutor’s Office is expected to play a decisive role in monitoring the distribution of funds throughout the EU in the context of the pandemic.

> Energy. The future act on compensation for unemitted CO2 of the electricity market will affect nuclear plants, hydroelectric power plants and wind farms existing since before the European CO2 Market was created.

> Public sector agreements. The General State Budget Act has made several amendments to the Act on Public Sector Agreements, which have entered into force this year. Also, new thresholds have been set this year for public agreements subject to harmonized regulations (SARA).

> Telecommunications. The future General Telecommunications Act, currently pending approval by the plenary session of the Spanish Congress of Deputies, will have a considerable impact on the sector, as it adopts measures to encourage investment in telecommunications networks and to create a one-stop shop to process permits for network deployment.