Regulatory Compliance e- Report 2013

May / June 2013 • IBERIAN LAWYER • www.iberianlawyer.com

EU & CompEtition REpoRt

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An abstract from Iberian LawyerMay / June 2013

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A ticking time bomb

Regulatory Compliance Report 2013

• IBERIAN LAWYER • May / June 2013 www.iberianlawyer.com38

Banking & FinanCE REpoRt

Mediation Forum 2013 Master Class & Mediators Gathering

MATAMediation and Training Alternatives

An annual two-day Mediation Forum in London hosted by Mediation and Training Alternatives (MATA) in cooperation with Iberian Lawyer’s In-House Club. The skills-based Master Class will be followed by personal guidance from some of Europe’s leading mediation experts, offering a unique opportunity to share, learn and discuss the better use of mediation when resolving disputes.

4th - 5th July, London

Who should attend?Those seeking new skills and techniques for resolving both commercial and inter-personal conflicts – be they considering mediation or already a trained mediator:

Lawyers

Senior executives

Business advisers

Human Resources professionals.

Why attend?This annual event will assist you in:

Gaining new skills while refreshing your mediation skills

Networking with some of Europe’s leading mediators

Learning about the options for developing a career in mediation

Updating your knowledge on international developments.

Topics covered:

4th July: Mediation Master ClassIdentifying the blocks to settlement and overcoming them • Using your facilitative skills and evaluative feedback to help parties• Dealing with the challenge of multiple parties• Handling ethical issues when they arrive•

5th July: Mediator Gathering Mediation developments across several jurisdictions • Mediation surgery – senior mediators discuss problems and • challenges Open forum – participants raise their own issues• Speed dating – face-to-face sessions with senior mediators •

For further information and to receive the brochure please contact: [email protected]

In collaboration with:

May / June 2013 • IBERIAN LAWYER • www.iberianlawyer.com 39

A ticking time bomb

The crisis has prompted a run of ever-changing regulations across Iberia, bringing to the forefront the increasing need for legal services on compliance. But more recently, it is the costs of non-compliance that are grabbing the headlines. Cases involving fi nes, reputational damage and even potential jail terms are highlighting the risk companies take if they do not make compliance a priority.

La crisis ha provocado constantes cambios en la normativa de la Península

Ibérica, poniendo de manifi esto la creciente

necesidad de asesorarse jurídicamente en materia

de Cumplimiento Normativo. Sin embargo, últimamente, los titulares de la prensa destacan el coste para las empresas del incumplimiento. Las

posibles multas, el daño reputacional e incluso

las penas de cárcel son los riesgos a los que se enfrentan si no priorizan

su control interno.

Iberian companies are entering a new era where compliance is seen as a ‘must have’ rather than a ‘nice to have’. Until recently, it was only the large multinationals that had it at the top of their agendas, while the small and medium-sized (SMEs) were far more concerned with surviving the crisis.

But the consequences of non-compliance are hitt ing the headlines, with corruption and fraud cases on the rise. And what is grabbing companies’ att ention is not only the reputational and economic damage, but the personal liability of company employees that could result in a jail term if convicted.

SMEs are therefore waking up to the need for internal programmes, policies and compliance offi cers, and to do so before any problems arise. With compliance, prevention is always bett er than cure.

“While perceived by some companies as a necessary burden, others believe that there is a compliance dividend – a business case for investing in proactive compliance programmes,” says Magda Cocco, a Partner and Co-Head of the TMT, Privacy & Data Protection, IT & Outsourcing practice group at Vieira de Almeida.

Clients therefore want law fi rms that off er teams with specifi c industry knowledge, tackling compliance from both a legal and economic perspective, and anticipating changing legal frameworks. And there is no doubt that compliance is now top of the priority list, say lawyers, as the penalties for not doing so could potentially devastate a business.

What is ‘compliance’?The concept of compliance is a huge challenge, with many diff erent variants on its exact meaning. The problem is that it touches so many areas, and the regulations are hugely varied depending on sector.

But there is a common methodology

across the board, agree lawyers – the need for a company to understand and comply with a set of rules to be able to work in their domestic market and also to enter and do business in international ones. “And some clients are at the forefront of compliance,” explains Cecilia Pastor, Corporate Partner and Head of Compliance at Baker & McKenzie in Spain. “They have taught us what compliance is and how to live with it.”

Risk management is a key concern at the moment, at both strategic and operational levels. Organisations are therefore increasingly placing greater emphasis on compliance and governance issues, says Iria Calviño, Co-Head of Public law & Regulatory practice of Herbert Smith Freehills Spain.

However, one complaint from lawyers and clients alike is that Iberian regulations are not clear when compared to the transparency of the US and UK systems, for example. “The real question is what we understand by the term ‘compliance’,” says Alejandro Touriño, IT and Compliance Partner at Ecija. “Since our regulations are at such an early stage, we can decide what they should cover and what we mean by ‘compliance’ in Spain.”

Portugal is also learning how to play the game of regulatory law, says Gonçalo Anastácio, Head of Competition at SRS Advogados. “Many stakeholders don’t want to understand the regulation that is needed in our new liberalised economy. But as this is changing, it is becoming increasingly necessary to have proper regulatory tools.” One of the major problems, say lawyers, lies with the regulators themselves. “Clients tell us that they don’t know how to act or how to comply because some regulators do not issue guidelines or reply in time to questions,” explains João Paulo Teixeira de Matos, a Partner at Garrigues in Portugal.

Maybe one good thing to come out of the crisis is that the country has become more exposed to, and scrutinised by, the international community. For Portuguese companies to do business abroad, and also for the domestic economy to att ract much-needed investment, there has to be transparency when it comes to compliance. But compliance is still very much an elitist concept in Portugal, summarises Daniel Reis, TMT Partner at PLMJ: “It is a rich man’s game.”

The client perspectiveClients are becoming increasingly aware

REgUlatoRy ComplianCE annUal REpoRt

Mediation Forum 2013 Master Class & Mediators Gathering

MATAMediation and Training Alternatives

An annual two-day Mediation Forum in London hosted by Mediation and Training Alternatives (MATA) in cooperation with Iberian Lawyer’s In-House Club. The skills-based Master Class will be followed by personal guidance from some of Europe’s leading mediation experts, offering a unique opportunity to share, learn and discuss the better use of mediation when resolving disputes.

4th - 5th July, London

Who should attend?Those seeking new skills and techniques for resolving both commercial and inter-personal conflicts – be they considering mediation or already a trained mediator:

Lawyers

Senior executives

Business advisers

Human Resources professionals.

Why attend?This annual event will assist you in:

Gaining new skills while refreshing your mediation skills

Networking with some of Europe’s leading mediators

Learning about the options for developing a career in mediation

Updating your knowledge on international developments.

Topics covered:

4th July: Mediation Master ClassIdentifying the blocks to settlement and overcoming them • Using your facilitative skills and evaluative feedback to help parties• Dealing with the challenge of multiple parties• Handling ethical issues when they arrive•

5th July: Mediator Gathering Mediation developments across several jurisdictions • Mediation surgery – senior mediators discuss problems and • challenges Open forum – participants raise their own issues• Speed dating – face-to-face sessions with senior mediators •

For further information and to receive the brochure please contact: [email protected]

In collaboration with:


of the consequences of non-compliance, especially given the increased risk of high fi nes, the lack of an effi cient judicial control, and, more importantly, the potential for individual criminal liability and potential jail terms.

But the meaning and awareness of compliance also depends very much on the sector and nationality of the client. According to Irene Martínez Saltó, a lawyer in the Corporate Compliance Department at Cuatrecasas, Gonçalves Pereira in Spain, there are two types of client – Spanish companies with no experience in corporate compliance or how to deal with criminal liability issues, and multinational companies with subsidiaries in Spain that need to adapt, expand and harmonise their procedures to the Spanish legal requirements.

Lawyers across Iberia agree that international companies are those more open to the issue. “Foreign clients often come to you asking for advice on compliance,” says Santiago Garrido, Head of Regulatory at Hogan Lovells in Spain, “but with Spanish clients, sometimes you have to sell the concept to them.”

Spanish companies don’t yet understand that the most important point for any compliance programme is evaluating risk, says Bernardo del Rosal, Of Counsel at Cliff ord Chance in Spain. “Preventing risk is the best guarantee at avoiding problems in the future. But we need a big example case in the courts before companies will take note.” Pescanova and Caja Madrid are two very recent examples, and lawyers believe there are

many more to come.However, many clients feel that because they

already have a compliance programme they are covered. But it is not a question of having one, but of whether it actually works and deals with the question of liability.

In Spain, SMEs and foreign-owned subsidiaries are those with increasing compliance needs, says Rocio Merlino Sanchez-Elvira, a Partner at Islaw Abogados in Spain. Medium-sized enterprises that are expanding require the most support when it comes to compliance, because as a consequence of

growth, they usually have to adapt their structures and capacities to new tax obligations, for example. “In those cases, they often rely on the use of external advice services,” says Carlos Diéguez, Head of Tax at Broseta, “accompanying them in the process of the implementation of new tax management procedures.”

Over the past months, major amendments aff ecting entities doing business in Spain have been introduced, mainly related to corporate income tax and new reporting duties. These entities should therefore pay special att ention to tax compliance, says Pablo Wesolowski, Senior Partner at DAC Beachcroft in Spain, in order to avoid unexpected risks and subsequent penalties.

Compliance, however, is not necessarily a current priority for a number of SMEs, as they are focusing on overcoming the diffi cult market situation. But more and more mid-sized enterprises are seeing that compliance is not just an issue for big companies or multinationals, and recognising that the fi nancial and criminals risks of non-compliance can be life-threatening. “On the other hand, clients see that meeting their compliance commitments not only helps to avoid risks but also brings fi nancial added-value,” says Sönke Lund, a Partner at Monereo Meyer Marinel-lo Abogados. “Lots of their business partners demand proof of compliance by the company, and this development will be even stronger in the future.”

While perceived by some companies as a necessary burden, others believe that there is a compliance dividend – a business case for investing in proactive compliance programmes. Magda Cocco, Vieira de Almeida

“”


When it comes to having a compliance department, it is the international fi rms and Big Four auditors that lead the way in Spain. This is due to their US or Anglo Saxon infl uences – jurisdictions that have a more advanced compliance approach than their Iberian counterparts.

Baker McKenzie, for example, is divided into international groups with global and regional steering committ ees, and a dedicated team in Madrid. While at BDO, they have a strong Anglo-Saxon infl uence so compliance is in their culture, according to Paula Álvarez-Ossorio, Director of the Legal Department at BDO in Spain.

At Jones Day, the Madrid offi ce

has a multidisciplinary team that coordinates with other worldwide offi ces of the network, if needs be, on cross-border matt ers. DLA Piper Spain also has an internal Risk Management and Compliance Helpdesk.

The domestic fi rms, however, adopt a more varied approach. At Pérez Llorca, for example, they have a compliance department with members from diff erent teams, while at Monereo Meyer Marinel-lo Abogados, the Compliance Department is embedded in their Corporate and Business Transactions Practice Group. Since the end of 2010, Cuatrecasas, Gonçalves Pereira has had a corporate compliance team, while Ecija has a dedicated

compliance team within its Information Technology department. And at Garrigues, compliance advice is implemented by multidisciplinary teams led by the criminal law, corporate governance and sustainability departments, explains Jesús de la Morena, a Partner at Garrigues in Spain.

Lupicinio Abogados, however, takes another approach, with a mix of an internal department with an external alliance – Informa Consulting, a fi rm of compliance services. “The team is formed by lawyers, auditors and consultants providing an interdisciplinary perspective to our services,” says Sergio Salcines Gasquet, Head of their Compliance.

Spanish style


this complexity and the technicality on the market, have produced in regulatory rules in these areas.

Since the onset of the crisis, there has also been a very noticeable upturn in the number of investigations conducted by the Tax Authorities, says Adolf Rousaud, Managing Partner and Head of Corporate at Rousaud Costas Duran in Barcelona. And this has increased further as the economic situation has deteriorated.

Key areas of client concern include the review of compliance programmes and general policies of the company and the implementation of whistle blowing channels, according to Miguel Bermúdez De Castro, Corporate and Finance Partner at Jones Day in Spain, as well as assistance in antitrust dawn-raids and cartel investigations, and the drafting of guidelines for competition inspections.

Advice on and implementation of the US Foreign Corrupt Practices Act (FCPA) and other anti-bribery regulations is also very much in demand. And practical advice is also needed on corporate governance, risk management and other areas, says Jesús Vélez Partner, Insurance/Reinsurance Partner at Kennedys Abogados, which are key to clients operating successfully in their respective regulated environments.

The Spanish energy sector, in particular, has suff ered the consequences of the Government’s att empts to reduce the ‘tariff defi cit’ and to re-establish the balance between the costs and revenue within the Sector.

A criminal necessityAmendments to the Spanish Criminal Code mean that the prevention of company and individual criminal liability, including directors and employees, is a key area where clients are asking for assistance, according to Estibaliz Aranburu, a Partner at Gómez-Acebo & Pombo. And when defending against allegations of personal liability, if the company can show that they have an established compliance programme in operation, then it may help to mitigate the charges, says Jesús Santos, Head of White Collar Crime at Baker & McKenzie in Spain.

But this poses a number of diffi culties because there are no guidelines on how to shape compliance programmes, and what specifi c measures, structures or procedures must be implemented by a company to prevent bribery and other criminal conduct, says Juan Jiménez-Laiglesia, Co-Managing Partner at DLA Piper Spain. Nor are there guidelines on how to develop eff ective corporate anti-corruption policies, which makes it diffi cult to analyse compliance in the context of corporate criminal liability arising from bribery off ences.

However, the Ministry of Justice has recently submitt ed a draft amending the Spanish Criminal Code to the Council of State to tackle these very issues and more. Described by lawyers as a potential “breakthrough” in the compliance arena, the draft still has to go through the legislative process before things can really begin to move forwards.

Spanish demandsThe fi nancial sector is in turmoil, and, as a consequence of the crisis, recent years have seen an rise in the amount of regulation. The Spanish authorities have also been increasing the pressure for information in the fi nancial sector, and the costs of compliance have never been higher, say lawyers. Furthermore, says Natalia Martí Picó, Corporate Partner at Roca Junyent, the complexity and the technicality of some areas, such as derivatives and securitisations among others, as well as the eff ects of

Some clients are at the forefront of compliance. They have taught

us what compliance is and how to live with it. .

Cecilia Pastor, Baker & McKenzie

“”


Most law fi rms agree that due to the size of the Portuguese market, and the considerable amount of national and EU industry regulations, it is very diffi cult to set up a ‘one size fi ts all’ team.

Diff erent business areas have diff erent compliance needs, says Bruno Azevedo Rodrigues, a Partner at ABBC, and while a ‘preventive’ approach may be common, the issues that each sector faces, the clients’ obligations and the measures and remedies to adopt are quite diversifi ed. As a result they have dedicated teams advising on regulatory matt ers, including compliance, on a sector-basis.

Pbbr also has a team specialised

in compliance issues, says César Bessa Monteiro, an IP and TMT Partner, made up of a specifi c group of lawyers, one from each area of specialisation. While AVM Advogados forms multi-jurisdictional teams gathering experts from the relevant jurisdictions.

At Miranda Correia Amendoeira & Associates, they have implemented a multi-tiered approach to regulatory compliance, says Luis MS Oliveira, Head of Public and Regulatory, organising teams on the basis of clients’ needs for legal assistance on compliance, with rules that are specifi c to each of the various regulated industries, and also common cross-industry

compliance rules.At Gómez-Acebo & Pombo in

Lisbon, their tailor-made team approach is led by a lawyer in regulatory compliance, part of the public department, and in charge of organising specifi c task force teams according to the practice areas and sectors involved.

While this trend of an ‘ad hoc’ method of providing compliance services isn’t likely to be changing anytime soon, say lawyers, this doesn’t mean it won’t eventually have to happen.

Many believe that in the future Portuguese law fi rms will have to have dedicated compliance departments, although this may take a while to materialise.

Portuguese practice


“There have been several regulatory changes during 2012, so the demand of legal compliance services has significantly increased,” says Antonio Morales, a Partner at Latham & Watkins in Spain. In particular, renewable energies are facing permanent legislative changes, according to Juan Rodríguez Cárcamo, a Public Law Partner at Pérez-Llorca.

And changes in metals prices, and the prospect of shale gas production activity in Spain, are increasing the activity of junior mining and oil and gas companies. Accordingly, their compliance needs are also growing due to new and stricter regulations, as well as due to community concerns and social pressure by ecological organisations on the Administration, says Antonio García Muñoz, Head of Public, Regulatory, Environmental and Competition at Lener.

Portuguese necessitiesPortugal also suffers in the energy sector, most notably due to the legislative and regulatory changes impacting it over the last year as a result of the MoU signed with the Troika. Furthermore the water and waste management sectors, particularly on environmental matters, are high on agendas. Complying with environmental law is always something to which clients ask for a ‘high level’ of attention. The requirements have been increased in the last years, says Rita Santinho Martins in Administrative, Regulatory and Environmental at Gómez Acebo & Pombo in Portugal, and the regulatory authorities are increasingly demanding.

In addition to the banking, finance and insurance sectors that were directly impacted by new regulations as a result of the crisis and increasing levels of accountability, other sectors have been targeted by increased compliance requirements, says António Vicente Marques, Founding Partner of AVM Advogados. “Pharmaceutical, healthcare, telecoms and activities impacting on environment are some of the sectors affected by this new wave of compliance requirements.”

And medium-sized companies in the technology and scientific sectors are increasing their activity in Portugal, adds Cláudia Amorim, Senior Associate in Corporate Crime and Regulatory Compliance at Sérvulo & Associados, and trying to take their first steps towards risk management.

In tax in particular, increasing pressure from the Authorities has been felt in recent years in relation to the assessment and collection of taxes. Accordingly, two big trends have emerged in tax compliance lately.

The first is an increasing demand from high-net-worth individuals to restructure their assets to comply with the applicable regulations, avoiding any future additional

assessments, says Rogério Fernandes Ferreira, Founding Partner at tax boutique RFF & Associados. “And companies continue needing judicial assistance in tax litigation as there have been, on several matters, administrative instructions which, despite being in breach of the applicable legislation, are put in place to raise the tax revenue.”

Crossing the borderDoing business in general is becoming more and

more complex. Business is increasingly done on a worldwide, basis, which, according to Sofia Ferreira Enriquez, Head of Regulatory and Compliance at Raposo Bernardo, means that more laws and regulations apply. Generally speaking, the failure of a company to comply with the local law of a given jurisdiction may mean failing to gain international visibility, and therefore competitiveness, says Tânia Pinheiro, a Partner in Tax, Restructuring, Administrative and Judicial Tax Litigation at Caiado Guerreiro.

With the crisis increasing the need for internationalisation, clients are facing complex regulatory frameworks worldwide. “The potential risks of ineffective global governance and compliance systems for multinational companies are often not recognised until failure occurs,” says Patricia Manca, Regulatory and Corporate Compliance Partner PwC Tax & Legal Services in Spain. “One of the major challenges that multinationals entities are facing is the need for the implementation of internal controls to ensure effective control of legal entities on a global basis.”

Internationalisation is therefore an important question, as it can, and in fact very often does, present serious compliance issues, says Antonio Mendonça Raimundo, a Partner at Albuquerque & Associados, especially relating to specific geographical areas where the harmonisation of laws, regulations and practices does not exist or is scarce.

For Spanish companies with an international presence, the way to address compliance matters is to apply the strictest and most advanced laws, rules and regulations to all their worldwide operations. “The aim is to apply a sole set of policies and procedures to the holding company and all its worldwide subsidiaries,” explains Silvia Steiner, Commercial, Competition & Anticorruption Compliance Partner at Osborne Clarke in Spain. This will not only assure the company being legally compliant but also allows for more effective control and follow-up in the implementation of policies and procedures.

While the international law firms can rely on their own offices worldwide, many domestic firms tackle the issue of cross border advice by using international networks and alliances to allow them to provide a more complete and global approach to compliance. But a challenge that both frequently face is having to explain to clients that they have to comply with certain rules that don’t exist in their domestic legal systems, adds Reis at PLMJ.

Consequently, export compliance is becoming an increasing problem for Spanish companies, particularly

Portugal is learning how to play the game of regulatory law. Many stakeholders don’t want to understand the regulation that is needed in our new liberalised economy. But as this is changing, it is becoming more and more necessary to have proper regulatory tools. Gonçalo Anastácio, SRS Advogados

“”



Clients are much more aware of their compliance obligations, especially in view of the so-called ‘Commitment Law’, according to Miguel Lorena Brito, Head of Public Law at F. Castelo Branco & Associados. “This Law has been one of the major changes of 2012 and clients are still asking many questions about it.”

According to this Law, a public entity cannot enter into a contract without prior budgetary provision and a specific sequential numeric code. “Clients are also responsible for ensuring their contracts comply with these new provisions and regulations,” explains Lorena Brito, “and if they accept non-compliant job orders or awards they are in danger of not getting paid for the goods supplied or the services provided.”

The framework for public procurement in Portugal also includes the recent introduction of a unified Entity for Shared Services for Public Administration that supervises most of

the Government and Central Authorities’ purchases. This results from a merger of former procurement agencies, the main being the ANCP– National Agency for Public Procurement.

“For many products and services we therefore have a ‘central shopping’ Entity that organises public tenders and approves lists of suppliers and capped prices,” he says. In certain sectors, suppliers now know that they have one opportunity to deal with the Government and if they don’t get listed they can be out of the public sector for two or three years.

Reinforcement of the Audit Court’s supervision powers should also be mentioned, as contracts with public and municipal companies above certain amounts are now subject to the Court’s prior clearance.

While it’s too early for any criticism, these amendments have been welcomed as creating a more transparent and efficient public procurement system, concludes Lorena Brito.

Committing to compliance

Los clientes son mucho más conscientes de sus obligaciones en

materia de cumplimiento normativo, especialmente

teniendo en cuenta la nueva legislación

denominada “Ley de Compromiso”, comenta Miguel Lorena Brito de

F. Castelo Branco & Associados.

Miguel Lorena Brito


those working in the Middle East, and similar jurisdictions, says Manuel López, Regulatory Finance Partner at Ashurst in Spain, as they are now realising the problems that they might have. When foreign clients are acquiring Iberian companies that are trading internationally, for example, they always question whether these companies are complying with all the necessary rules and regulations worldwide – something that could prove to be a deal breaker.

The money and risks involved can be tremendous, as it has the potential to affect the companies, third-parties, exporters, and even banks and insurance companies.

Therefore foreign clients are taking compliance very seriously, say lawyers, and domestic companies have to act quickly to ensure they

are fully compliant, or risk losing foreign clients.

Good business senseThe bottom line seems to be that if a client’s core business is affected, then they will pay attention to compliance. Lawyers see that unless clients see an example of the repercussions of non-compliance then many don’t understand why they need

to invest. “Portuguese companies don’t want to spend money, and when it comes to

compliance they feel that lawyers are selling them things

they don’t need,” says Tiago Félix da Costa, a Litigation and Arbitration Lawyer at Morais Leitão, Galvã Teles, Soares da Silva. “What we need is one big example case and then everyone will understand the consequences of not paying attention.”

Furthermore, the size of a company is not a defining factor when it comes to the importance of compliance, but sustainability is, says Armando Martins Ferreira, a Partner at Abreu Advogados. Companies need to be compliance-oriented to be successful in the long run, and better prepared to overcome market stress caused by the pressure of regulators, competitors and clients, and to face new external market opportunities.

With increasingly complex regulatory regimes worldwide, and businesses internationalising to mitigate their inactivity domestic markets, clients can no longer take a mostly reactive approach, and must proactively embrace a preventative one.

“You need to be compliant by law,” says João Mattamouros Resende, a Corporate/Commercial Partner at Cuatrecasas, Gonçalves Pereira in Portugal, “but there is also a commercial need for it. Compliance just makes good business sense.”

Therefore, the rise in reported corruption and fraud cases, and the headline grabbing criminal sanctions currently being faced by directors and employees, means that companies can no longer ignore the issue of compliance.



Environmental balancing actBusinesses may not have the financial capabilities to comply with all their obligations

Portuguese companies currently need to contend with both changing environmental obligations and economic considerations, says Manuel Gouveia Pereira, Managing Associate of the Environment Practice Area at Vieira de Almeida & Associados. Finding the right balance, he says, is difficult.

The desire to cut carbon emissions is a long-held goal of the EU. One central component was the EU Emissions Trading System (EU ETS), a model where greenhouse gas emissions are capped and the surplus emissions traded for cash. The concept was welcomed when it launched in 2005, says Gouveia Pereira, but during the second trading period 2008-2012 things changed due to the surplus of allowances.

“As from 2013, the energy sector in Portugal can no longer be awarded CO2 allowances for free but have to go through an auction process,” he explains. ”The system is not working as there is a huge excess of allowances so the value of carbon is very low.” The attitude of most companies regarding emissions to the

Las empresas portuguesas tienen que hacer frente a las obligaciones ambientales y a las consideraciones económicas, dice Manuel Gouveia Pereira de Vieira de Almeida & Associados. Sin embargo, a menudo las empresas no disponen de la suficiente capacidad financiera para poder cumplir con todas sus obligaciones.

El rápido ritmo de las reformas en el ámbito fiscal implica que las empresas necesitan mantenerse actualizadas en cuanto a la normativa vigente para evitar que infrinjan la ley por desconocimiento de los cambios legislativos, dice Adolf Rousaud de Rousaud Costas Duran.

Manuel Gouveia Pereira

Adolf Rousaud

Businesses have to ensure they maintain adequate and up-to-date tax compliance procedures to avoid falling foul of legislative changes, says Adolf Rousaud, Managing Partner and Head of Corporate at Rousaud Costas Duran in Barcelona. This is mainly due to the rapid pace of reform in the tax arena and the various influences now at play on domestic policy.

“Since the onset of the financial crisis, there has been a very noticeable upturn in the number of investigations conducted by the Authorities,” he explains, “and this analysis, particularly of corporate issues, has increased further as the economic situation has deteriorated.” In light of a reduced national tax base, tax evasion and avoidance is now a very political issue and the response by the Spanish Authorities reflects that of governments across Europe. It is adopting a much more aggressive approach to the assessment of tax issues and in the demand for supporting data, says Rousaud.

“We are seeing a more joined-up approach being taken by the Authorities, improved data sharing between the relevant agencies and greater pressure being placed on banks and institutions to provide financial information to corroborate suspicions. This means that companies engaged in tax evasion have far fewer places to hide.”

For legal and tax departments in companies it is not business as usual, he emphasises. There is a much greater demand being placed on companies to produce paper trails to validate transactions, and to demonstrate transparency in the processes utilised to manage their tax affairs.

“The Authorities are being very aggressive, the penalties for non-compliance are increasingly severe,” he concludes. “Companies have to be able to prove that they are operating not only within the letter of the law, but more than ever acting also within the spirit of it.”

Fighting tax investigations

environment is to stick to strict pollution compliance levels, resulting in the volume of projects decreasing so as to meet the expectations of the law. To compound matters, Portugal outlined the latest of its Integrated Pollution Control, Compliance and Enforcement laws this year that will put new limits on industrial emissions.

“The rules state that companies need to comply with the best practices possible to reduce pollution, from machinery and engines to waste water and chimneys,” Gouveia Pereira adds. “The feasibility of this best practice approach is seldom taken into consideration by the Portuguese authorities, but regardless companies still have to comply.”

Gouveia Pereira says businesses may have to spend a lot of money to comply with regulations. “Operators have a huge number of rules to meet but, unlike 10 years ago, they will not all have the financial capability to do so. The environmental euphoria of the 2000s has given way to a new period of ‘post-financial crisis’ reality.”

May / June 2013 • IBERIAN LAWYER • www.iberianlawyer.com

Spanish companies are battling with ever-changing corporate rules to ensure that their business activities are fully-compliant with domestic and international regulations.

Paula Álvarez-Ossorio, Director of the Dispute Resolution Department at BDO and lead contact for compliance, identifies three topical issues that Spanish corporates are currently facing.

The first two issues involve legislation, namely the 2010 reform of the domestic criminal code, which brought in criminal corporate liability, and the US Foreign Account Tax Compliance Act (FATCA), which will come into force on January 1st, 2014.

“FATCA combats tax evasion using foreign financial institutions,” Álvarez-Ossorio explains. “The extraterritorial scope of the FATCA legislation will affect a wide range of players in the financial markets, which will have to adapt to the demanding administrative burden that FATCA has established.”

The third matter is functional. The financial crisis in Spain means affected organisations are now looking to ensure that they are fully-compliant with the new legal and economic rules.

Álvarez-Ossorio believes that compliance in Spain is a relatively recent field and still a challenge for companies, law firms and courts due to the lack of local precedents.

Spanish companies are therefore looking at the Anglo-Saxon compliance model as best practice for the good management of companies, in order to reduce legal risks.

“Any good compliance programme must include the specific risks affecting the company, must respond to change, ensure fairness and should be real and applicable to the whole company,” Álvarez-Ossorio concludes. “It is very important for law firms to train their lawyers to develop and offer complete compliance programmes that are adapted to clients’ needs and requirements.”

Comply with me

El cumplimiento normativo en España es un campo relativamente

reciente y sigue siendo un reto para las

empresas, bufetes de abogados y tribunales,

debido a la falta de precedentes locales, dice

Paula Álvarez-Ossorio de BDO.

La privatización de ANA ha provocado una gran

preocupación por los cambios acaecidos en las

normas de aviación. El acuerdo fue un impulso

para las finanzas del gobierno, pero esto

ha causado algunos problemas a la hora de

regular la nueva entidad aeroportuaria, dice António Moura Portugal de ABBC.

Paula Álvarez-Ossorio

Air charges on the riseThe privatisation of ANA causes concern over changes to aviation regulations

António Moura Portugal

After more than 10 years of speculation, Portuguese airport operator Aeroportos de Portugal – ANA was finally privatised at the end of last year. The French infrastructure giant Vinci landed a 95 percent holding in the asset with a bid of more than €3bn, handing it the right to service airports in Lisbon, Porto, the Algarve, Alentejo, Madeira and the Azores.

The deal was a boost to Government’s finances, but it has created certain issues when it comes to the regulatory model adopted, says António Moura Portugal, a Partner at ABBC & Associados. “The sale creates something of a paradox, as the old legal model, which was set in stone and fully public, has been replaced by an annex of a private concession agreement.”

Additionally, the previous “single till” financing model has been replaced with a “dual till” system, he explains. Under the former, both the airside revenue (such as landing fees and other aviation services) and commercial revenue (such as shops

sales and long-term parking) would be liable to fund the infrastructure. Under the new system, it is only the airside revenue that can be used and “this model will eventually lead to a rise in airport charges”, Moura Portugal claims.

“This change needs robust regulation from The National Institute of Civil Aviation of Portugal, and assessment of the fulfilment of quality level requirements for the monopolistic operator.”

The main concern already announced publicly is that airlines may stop using Portuguese airports if the prices become too expensive. As ANA holds the main assets, there is little choice, for example, for airlines to select an alternative to Lisbon airport run by a competitor unlike in London.

“The Government can’t take airlines for granted,” Moura Portugal warns. “There need to be transparent and objective rules and an independent and accountable regulator.”

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