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Newsletter March 2021

Legal Updates

COVID-19 and its Impact on the Judicial and Administrative Activity

Law 4-B/2021, of 1 February was approved and published, establishing a system of suspension of procedural deadlines as a result of the measures adopted in the context of the COVID-19 disease pandemic, amending Law 1-A/2020, of 19 March, for the ninth time. This new exceptional regime was adopted following the current epidemiological situation which also reflects itself in the scope of the judicial and administrative activity.

According to the Law, as a rule, all diligences and deadlines for the practice of procedural and administrative acts in non-urgent cases are suspended.

Nonetheless, exceptions are foreseen, such as when all parties agree and expressly declare to have conditions to ensure the practice of acts and diligences through adequate telematic means.

Proceedings, acts and diligences considered urgent by law or by decision of the judicial authority will continue to be processed, without suspension or interruption of deadlines, acts or diligences.

Law 4-B/2021 produces effects since 22.01.2021, until a new decree-law is published declaring the termination of this exceptional regime.

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Rule of the Insolvency Proceedings Declared Unconstitutional

In the recent judgment no. 70/2021, the Constitutional Court declared the unconstitutionality with general mandatory force of the rule resulting from the combination of article 15 of the Insolvency and Corporate Recovery Code and article 629 (1) of the Code of Civil Procedure.

When applying the two legal provisions, an ordinary appeal against court decisions will only be admissible if the value of the appeal is greater than the jurisdiction of the court against which it is appealed, and in the case of insolvency, the general rule is the value of the appeal to be determined by the value of the debtor’s property indicated in the petition.

The Court opposed to the said application, emphasizing that in the case of an appeal against the decision that denied the application for exemption from the remaining liabilities, this rule cannot apply, and the value of the suit in these cases must correspond to the value of the liability from which the interested parties wish to be exonerated, by the constitutional principle of equality.

The combined application of these provisions had previously been found to be inconsistent with the Constitution in specific cases, but the declaration with mandatory and general force consolidates this understanding and it opposed to the perpetuation of this legal interpretation.

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Business Updates

Netflix Tax, Another Cost for The Consumer?

The tax applied to streaming platforms such as Netflix, HBO and Disney+ entered into effect on 17 February, having been enacted during 2020, through Law No. 74/2020, of 19 November.

The said operators of on-demand subscription audio-visual services will be subject to the payment of a 1% tax on the relevant income of this sector, or, if impossible to determine the specific value, it will be assumed that the annual value of the tax will be one million euros.

The objective of this tax is the development of the cinematographic art and the audio-visual sector, by reverting to the revenue of the Institute of Cinema and Audiovisual, I. P.’s.

Nonetheless, given the need for regulation, and its approval and publication by the government within 60 days, it can be said that, strictly speaking, this tax is not yet in force. As a matter of fact, this is the time to consider the consequences that the inclusion of one more tax may have for consumers, who may have to bear it through an increase in subscription prices.

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New electronic signature regime

Decree-Law no. 12/2021 was published on 9 February, regulating the validity, effectiveness, and probatory value of the affixing of an electronic signature to digital documents, ensuring the implementation of the provisions of Regulation (EU) 910/2014.

The signature in electronic format allows for the authorship of an electronic document to be known, and it aims to produce the same effects of an autographic signature affixed on paper written documents.

Along with electronic signatures, the above mentioned Decree-Law also regulated electronic seals, time stamps, the “EU” trust mark, electronic registered delivery services and certificate services for website authentication.

Electronic signatures are a possible solution for distance contracts, such as labour or service contracts, facilitating commercial transactions between the parties involved, promoting citizens’ trust in the use of these mechanisms.

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