Impacts of coronavirus outbreak prevention measures on labour agrements

Dear all,

In face of the recent measures being taken by the Macau Government for prevention of coronavirus and in anticipation of the possibility of employees based in Zhuhai being prevented to come to Macau to work, it is important to be aware of the legal framework applicable to the case.

First of all, please note that currently there are no guidelines issued by the Macau Government in respect of this matter. As such, the below advice may have to be adjusted in the coming days, subject to the measures adopted by the Macau Government.

Bearing the above in mind, in case workers based in Zhuhai are barred, by order of the Macau Government, from crossing the border to come to Macau to work, the following legal framework shall apply:

 

Macau residents

In case of border closure, the absence from work shall be considered justified, for force majeure reasons, non-attributable to the worker (article 50. Par. 2 subpar. 2) of the Labour Relations Law).

As such, Macau residents will be entitled to not show up for work until the border closure ceases. Although their absence is justified, employees will not be entitled to remuneration while the absence lasts.

In case the closure of borders lasts for an extended period of time (or for an indefinite period), the possibility of the employment agreement lapsing may be considered, due to the fact that it is impossible for the worker to perform his/her duties (article 73 par. 1 subpar. 2) of the Labour Relations Law). In this event, no compensation shall be due to the employee for termination of the employment agreement.

However, at this stage, it is still too early to determine whether it would be reasonable to consider that the employment relationship has lapsed, specially taking into account that there are no known measures adopted by the Macau Government in this respect.

Finally, please note that the above does not prevent the employer and the employee from reaching alternative arrangements (e.g. negotiating a period of unpaid leave; arranging for the annual leave of the employee to be taken during the border closure period; or providing the employees with accommodation in Macau) or negotiating some kind of settlement/compensation for early termination of the employment agreement.

 

Non-resident workers

As with Macau resident workers, in case of border closure, the absence from work by Non-resident workers shall be considered justified, for force majeure reasons, non-attributable to the worker (article 50. Par. 2 subpar. 2) of the Labour Relations Law).

As such, Non-resident workers that live in Zhuhai will be entitled to not show up for work until the border closure ceases. Although their absence is justified, employees will not be entitled to remuneration while the absence lasts.

In addition, the employer may elect not to renew the work permit of Non-resident workers whose work permit reaches its term during the period of border closure.

With respect to the lapsing of the employment agreement in case the closure of borders lasts for an extended period of time (or for an indefinite period), due to the fact that it is impossible for the worker to perform his/her duties (article 73 par. 1 subpar. 2) of the Labour Relations Law), it is our view that it is still to early to determine whether such action would be justified.

Nevertheless, it should be noted that that the hiring of Non-resident workers is subject to stricter requirements than those imposed on the hiring of resident workers and is subject to effective limitations (such as the imposition of quotas).

As such, depending on the evolution of the coronavirus outbreak, this may become a pressing matter and may lead to the determination that the employment agreement has lapsed, so that the employer is allowed to replace the positions left vacant by the Zhuhai based employees. In this circumstance, no compensation shall be due to the employee for termination of the employment agreement.

Nevertheless, for now, it is important to wait for the announcements made by the Macau Government, as it is possible that specific measures are adopted to allow employers to temporarily fulfill the job vacancies created by the absence of Non-resident workers based in Zhuhai.

In any case, the above does not prevent the employer and the employee from reaching alternative arrangements during the border closure (e.g. negotiating a period of unpaid leave; arranging for the annual leave of the employee to be taken during the border closure period; or providing the employees with accommodation in Macau) or negotiating some kind of settlement/compensation for early termination of the employment agreement.

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We will monitor the developments of the measures taken by the Government and we will let you know in case there are any updates.

 

Best regards,

Manuela António – Team

 

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Manuela António – Lawyers and Notaries signs strategic partnership with Jingsh Law Firm

We are pleased to announce that on January 3rd, 2020 our Law Office signed a long-term strategic partnership with Jingsh Law Firm, one of the biggest law firms in China.

The event took place in Beijing and was attended by our Partner Hugo Maia Bandeira and our Associate António Zhang, both of which also joined the 2020 Jingsh Global Partners & Directors Summit, the very next day.

More than 300 people attended the 2020 Jingsh Global Partners & Directors Summit. Our partner Hugo Maia Bandeira was one of the panel speakers at the event. It was an important opportunity to speak about the future of Macau and the development of the Greater Bay Area project, among other relevant topics.

 

Check out some of the highlights of the events below:

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Residency, work, entry and stay authorizations in Macau

Overview and responsible governmental entities

The exponential growth and economic prosperity of the Macau Special Administrative Region (the “MSAR”, “Region” and “Macau”) in the last few decades have brought a wave of business and investors to the Region, and with them an increasing demand for work, residency and stay authorizations.

In general terms, no person is allowed to stay in the MSAR without either an Authorization to Stay, a Special Stay Permit, a Special Authorization to Stay, an Extension of Stay or a Residency Authorization.

As for the handling of the procedures, there are four main governmental entities responsible for issuing authorizations related to residency, work and stay in Macau: the Trade and Investment Promotion Institute (“IPIM”), the Residence and Stay Affairs Department of the Public Security Police Force (“PSP”) and the Identification Services Bureau (“DSI”) and the Labour Affairs Department (“DSAL”) – each of them playing a defining role in the Region’s Immigration.

 

Entry and Stay in the MSAR

According to the Region’s legal framework, non-residents are required to possess a valid passport and an “Entry Permit” or a “Visa” to enter into Macau, in accordance with Administrative Regulation No. 5/2003 (Regulations of Entry, Stay and Residence Authorization). There are however a few exceptions, such as individuals making use of the Macao International Airport for transit up to 48 hours, to other destinations, who are able to enter and stay in Macao without the said documents.

On the other hand, individuals who are not exempted from a “Visa” or an “Entry Permit” are granted an authorization to stay for generally 30 days from the date of entry with a “Visa”, an “Entry Permit” or an “Authorization to Enter and Stay”. In these cases, such persons can enjoy multiple entries within the referred 30 days without having to apply for another “Visa”, “Entry Permit” or an “Authorization to Enter and Stay”.

 

Work in the MSAR: the Blue Cards

Regardless of their country of origin, no one can work in Macau – with the exception of Residents of course – unless they have the authorization to do so, including Portuguese and Chinese nationals. Therefore, non-resident workers must be employed by an MSAR employer with a valid work permit issued by the DSAL, and also apply for a stay permit, commonly known as Non-resident Worker’s Identification Card (“Blue Card”) in the PSP.

This Blue Card is mainly issued to three separate categories of workers:

  1. specialized non-resident workers that possess a high level of academic qualifications and/or a highly qualified technical aptitude or professional experience, and intend to perform duties requiring a high degree of specialization;
  2. non-specialized non-resident workers, due to unsuccessful hiring or insufficient local employees in the local labour market; and
  3. domestic workers.

In any case, and regardless of the category that the non-resident workers fit, these workers can be directly recruited by their future employer, who must be duly authorized to hire non-resident workers. Further, the employer must ensure that there are no resident workers available to perform the same duties under the conditions of equal cost and efficiency, and there must be a specific need for the worker’s competences from the MSAR’s labour market.

As far as criticism goes, the past few years have not been the easiest for the working class in Macau, as they have been subject to an extremely precarious position and overall and dependency on the local authorities. Also, some of the requirements demanded by the authorities have proven to be more and more difficult to meet, especially with regards to specialized and non-specialized non-resident workers during the Blue Card’s approval process – surrounding the procedure with a great deal of obstacles and red tape procedures. This is mainly due to the MSAR’s employment policies, which have been increasingly protectionist towards local workers.

 

Residency authorizations in the MSAR

In a nutshell, individuals living outside of the MSAR may apply for a Residency Authorization with three different entities:

  • the IPIM, for people who intend to apply for residency in the MSAR as investors (major investment / investment plan), managerial personnel or technical personnel;
  • the PSP, notably, for (a) Portuguese nationals; (b) spouses/partners of de facto marriages on the basis of family reunion, from Mainland China, and holders of the “People’s Republic of China (the “PRC”) Permit for Travelling to Hong Kong and Macao”; (c) children born outside of the MSAR and whose parents are Macao permanent residents / “PRC Permit for Travelling to Hong Kong and Macau” holders, on the basis of family reunion; and
  • the DSI, through application of a Certificate of Entitlement to the Right of Abode, for people who claim the right of abode in the MSAR but do not possess a valid Macau Resident Identity Card, and who are not living in any part of the PRC (except for Hong Kong and the Taiwan Region). This option is applicable to (a) Chinese nationals or their descents, and (b) Portuguese descents with some level of affinity to the MSAR, either because they were born in Macau or they have lived in Macau no less than 7 years before or after the establishment of the MSAR, in 1999.

 

Residency authorization in particular: entanglements and delays

As hinted above, foreigners who intend to apply for a Residency Authorization in Macau and by family reunion must process their application process through IPIM. Unfortunately, this group of people have not experienced a very positive outcome regarding the issuance of their Residency Authorization.

In fact, not only have the requirements for the attribution of Residency Authorization have become more and more strict, but also the procedure itself has become cumbersome and lengthy – dragging itself, in some cases, for more than a year.

In terms of success of the application, historical reasons are still an important factor when applying for Residency Authorization in Macau, making the entire procedure much easier for people of Chinese and Portuguese nationality and/or their respective descendants.

The most flagrant and well-known cases happen within the IPIM, a public institute which undeniably serves very little of its legal purposes in terms of promoting the investment in the Region, as well as handing out residency authorizations as it should – little over 20 per year.

Moreover, it should be noted that the IPIM’s decision for handing out residency authorizations is mainly focused on the potential growth of certain sectors of the economy in the MSAR.  In their own words, the IPIM seeks to “attract overseas talents to Macao to motivate the diversification of Macao’s industries, improve the competitiveness of industries”, giving priority to specific professions within the following sectors of activity: the (i) Financial Sector; the (ii) Information Technology Sector; the (iii) Traditional Chinese Medicine Industry; the (iv) Lusophone Markets and Chinese-Portuguese Translation; and the (v) Convention and Exhibition Industry.

Also, applicants must bear a high-level academic background, profuse professional qualifications and in some cases sufficient experience for the job, and the position must be filled by an applicant whose qualifications are more competitive than local workers.

 

Conclusion

In the end, the issuance of authorizations to work to live in the MSAR has become increasingly constrained due to the overall requirements demanded by different local entities, current local policies which are biased towards local workers, and especially due to the long and exhausting procedures.

In reality, meeting all of the requirements for these authorizations has proven to be an intimidating task, especially considering that in some cases, such as with residency, the IPIM holds full authority and discretion and is given no particular timeframe for handling these procedures. This, of course, discourages the applicants, driving away potential contributors to the development of Macau’s social and economic wellbeing.

 

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Another year, another milestone here at Manuela António Law Office

Another year, another milestone here at Manuela António Law Office.

On this day, 28 of November 2019, our firm completes 33 years of its establishment.

As always, we take this occasion to thank the support of our excellent team of collaborators, as well as of our loyal clients for their priceless aid in our success.

As the saying goes, keeping together is progress. Working together is success.

On today’s competitive world of business, our firm is still going strong amongst the professional leads of the time, with countless achievements and accomplishments along the years, having once again won numerous awards as one of the top law firms in Macau.

Until we meet again,

Happy anniversary!

THE KIMBERLEY PROCESS RULES FOR DIAMOND TRADE IN MACAU

The Legislative Assembly of the Macau S.A.R. recently passed two legal diplomas which will enable Macau to implement the Kimberley Process Certification Scheme (KPCS): Law no. 15/2019, and Administrative Regulation no. 29/2019 – complementing the former. This will allow the Region to formally engage in the international trade in rough diamonds, in line with the currently established international standards.

The above legislation came into force on the first day of October and aims to help Macau develop its already significant diamond and jewellery trade sector

I. Requirements and liabilities

In accordance with the new laws, an individual or entity that intends to import, export, transit, purchase, sale or transport rough diamonds in Macau will be required to obtain an operator License (the “License”). The License will be valid for two years and is renewable for equal periods, provided that the applicant submits the request for renewal and the necessary information at least 10 working days before its expiry date. It should also be pointed out that this request must be submitted with the Macau Economic Services Bureau (the “DSE”).

The issue or renewal of the License is subject to the cumulative fulfilment of the following requirements:

  1. having not the commencement of activity at the Macau Tax Bureau (the “MTB”);
  2. to not have been declared bankrupt or insolvent unless they have been rehabilitated according to the law;
  3. to have a permanent registered office in order to pursue their activity in Macau;
  4. having no tax debts towards the Macau S.A.R.;
  5. to be considered suitable for the exercise of the activity.

It should be noted that the operator or its directors may be considered unsuitable for the exercise of their activity if they have practised in the Macau S.A.R. or abroad certain acts that may be deemed as adverse to the transaction of rough diamonds. Nevertheless, it should be noted that such acts will not be considered for the issuance of the License if the individual or entity was rehabilitated under the law.

In terms of the actual application, the DSE is the responsible entity for the handling of the procedures, and the applications should be accompanied by the following documents (notwithstanding certain exceptions provided for in the law):

  1. the address of the registered office where the applicant is operating in Macau and the identification details of his/her name or business name and, in the case of a legal person, the identification details of its directors;
  2. a certificate of the applicant’s criminal record or equivalent document and, in the case of a legal person, that of its directors;
  3. a certificate of the Commercial Registry or a photocopy of the document proving the declaration of commencement of the activity for taxation purposes and, in the case of a legal person, a certificate of Commercial Registry, including copies of the articles of association duly updated;
  4. a declaration issued by the applicant stating that he/she has not been declared bankrupt or insolvent, in accordance with the applicable legal provisions, in the case of a legal person, as well as a statement issued by the applicant stating that the members of the governing bodies have not been declared bankrupt or insolvent;
  5. a document which proves that the applicant does not owe any taxes in the Macau S.A.R.

The presentation of the necessary documents for the request of the certificate, import license, export license or transit license is made by electronic data transmission, and the electronic processing provisions set forth by Law 5/2005 (documents and electronic signatures) are applicable.

After due submission, the head of the DSE shall then decide to grant or reject the application within 10 working days from the date of receipt of all documents pertaining to the application.

As referred, upon being granted, the License will be valid for a period of 2 years, renewable for equal periods. It should also be noted that the License can be cancelled by DSE (please see below paragraph III).

In addition to the License, the economic operator will also require to request a license for importation, exportation and transit as well as certificates, whenever it desires to carry out an importation, exportation or transit operation. These requests need also to be submitted with DSE.

The period of validity of these certificates cannot exceed 60 days and the export, import and transit licenses shall be valid for 30 days.

In terms of the overall reach, importation and exportation of rough diamonds from non-participating countries of the KPCS or regions are strictly prohibited.

 

II. Obligations of the operator

Any individual or entity engaged in the importation, exportation, transit, purchase, sale or transport of rough diamonds is required to:

  1. keep up to date records concerning the activities of rough diamond trading for a period of five years, through a digital database – including import, export, purchase or sale, namely the names of the customers and suppliers, license and certificate numbers and the quantity and value of rough diamonds sold, exported or purchased;
  2. to submit to the DSE whenever required the complete records regarding the activities of importation, exportation and purchase and sale of rough diamonds; and
  3. to pay all the expenses arising from inspection reports carried out abroad regarding rough diamonds.

 

III. License Cancelation and consequences

The License is cancelled in any of the following situations:

  1. If the licensee requests it;
  2. If the licensee no longer meets any of the requirements for the exercise of the activity and this situation has not been remedied within the legally determined timeframe;
  3. If the holder of the License does not fulfil any of the requirements for the exercise of the activity at the time of the License application, within the validity period of the License (with certain exceptions);
  4. The licensee assigns his License.
  5. The License holder dies (in case of an individual), or there is a termination of his activity (in case of a legal entity);
  6. Expiry of the License, without being renewed;
  7. The License has been obtained through false declarations, misrepresentation or other unlawful means;
  8. The licensee does not voluntarily pay the fine imposed under the law no. 15/2019;
  9. The licensee is prohibited, by a Court decision, from exercising the activities regulated by the law no. 15/2019 for a period that exceeds the remaining period of validity of the License.

Should the License be cancelled, the holder is required to immediately cease the pursuit of rough diamond trading activities, without prejudice of obtaining a new License, if the necessary legal requirements are met.

IV. Compliance and Sanctions

Apart from licensing procedures, the DSE is in charge of undertaking inspections and surveys as it deems necessary to ensure the application and enforcement of the new law, notably by overviewing the activities and the facilities of the relevant entities – who are legally compelled to cooperate with the DSE. Also, the DSE acts as an assistant to the Macau Customs Services (the “MCS”), which is the general supervisory body for the purposes of Law no. 15/2019 and Administrative Regulation no. 29/2019.

The MCS is responsible for verifying the conformity between certificates, licenses and documents submitted by the operator carrying out import or export activities of rough diamonds – without prejudice to the supervisory powers conferred on the DSE.

In that regard, the DSE alongside the MCS hold the authority to undertake, within their discretion, the precautionary seizure of rough diamonds which are in breach of the provisions of the law. Upon such seizure, the MSC or the DSE will notify the holder of the diamonds or the offender, in order to remedy the situation within 30 days. Should the situation remain unsolved within the period provided for in the preceding paragraph, the DSE or the MCS will then determine the definitive seizure of the respective rough diamonds.

 

Lastly, it should be noted that Law no. 15/2019 contemplates a section for criminal responsibility and administrative sanctions.

In this context, the crime of disobedience is the only criminal sanction which the law prescribes, as a result of the failure to comply with the duty to cooperate with the DSE – in regard of the abovementioned inspections and surveys.

As far as administrative sanctions are considered, the fines may range between the amounts of MOP10,000 and MOP5,000,000 for violation of certain legal provisions. Here are the relevant administrative offences:

  • The lack of certificates for diamond import and export issued by the competent authority is sanctioned with a fine of MOP500,000 to MOP5,000,000;
  • The continuation of exercise of the diamond trading activities upon cancellation, suspension and declaration of nullity of the License to trade diamonds is sanctioned with a fine of MOP200,000 to MOP2,000,000;
  • Participating in trade or exporting rough diamonds to KPCS non-participating countries or regions is sanctioned with a fine of MOP200,000 to MOP2,000,000;
  • The violation of the obligation to keep continuously updated all records concerning the activities of diamonds for a period of five years, via a computer database, is sanctioned with a fine of MOP10,000 to MOP50,000;
  • The non-return of a License upon its expiration date or the declaration of its nullity is sanctioned with a fine of MOP10,000 to MOP50,000.

Also, there are also a few accessory sanctions which may additionally be carried out, either cumulatively or on their own. Specifically:

  1. loss of rough diamonds in favour of the Macau S.R. government – which are then destroyed;
  2. prohibition of issuance of certificates to the offender for a period not exceeding two years;
  3. cancellation of valid certificates issued to the offender.

 

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New law concerning restrictions on the supply of plastic bags in retail activities in Macau

Following the general and increasing trend on the worldwide environmental protection measures, the Legislative Assembly has recently approved and the Chief Executive ordered the publication of Law no. 16/2019, setting forth a number of rules with respect to the restrictions on the supply of plastic bags within the Region. The legislation, which comes into force on November 17th of this year, primarily seeks to reduce the negative impact of plastic bags on the environment, as a way to gradually refine the consumer’s environmental awareness and behaviours by means of imposing a contribution/tax over the use of those items.

Although relatively simple and straightforward, there are a few details worth pointing out, notably in terms of some of the legislator’s options, restrictions imposed and respective exceptions, and also with regards to the inspection on compliance with its provisions through the definition of infractions and setting of penalties.

Firstly, the sole focus of the law is to tax every plastic bag used within the acts of retail sale in commercial establishments, leaving wholesale out of the equation. We should bear in mind however that there is an overwhelming difference in the usage of plastic bags between retail sale and wholesale, which is much more significant, and therefore, the government might have opted to introduce a new tax on plastic packaging, which was not done.

The second observation to be made is related to the choice made by the legislator allowing for free plastic bags to be supplied to carry both unpackaged food or medicines not previously packed, as well as for products purchased at retail outlets located within the passenger boarding or disembarkation areas of the airport, or in corridors giving access to such areas. In this instance, one could argue that most unpackaged food consists of fruit and vegetables, which are washable and often come in their own – compostable – natural wrapping. Plastic packaging can, of course, help to keep food hygienic, and also makes it more convenient for consumers to grab and go, although the overall result might not be in the best interest of the environment.

In terms of monitoring of compliance with the law, the Directorate of Environmental Protection Services is responsible for this task, having free access to any retail establishment, in particular for the verification of data records, if any, concerning the collection of plastic bags supplied to customers.

The violation of the provisions of the law constitutes an administrative offence sanctioned by MOP1,000.00 for each plastic bag and MOP10,000.00 patacas in the case of breach of the duty to cooperate by the retailers and respective staff, such as managers, directors and assistants. This being said, it is also worth noting that companies (even if irregularly incorporated) are also liable for the offences set forth in this law when committed by their corporate bodies or representatives, on their behalf and in their collective interest.

As for the charging value, there is still no price tag on each plastic bag, and it will be determined by an Order from the Chief Executive later on, during this year and presumably before the law comes into force (November).

 

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Acquisition of Portuguese Citizenship Through Marriage and Common-Law Marriage

The Portuguese government, through recent changes in the Portuguese Nationality Act (“PNA”) – Law no. 31/81 of 3 October – has lessened the requirements for the acquisition of Portuguese citizenship.

Over the years, the PNA has undergone several changes, sometimes making it more accessible for individuals to successfully meet the requirements stipulated for the acquisition of the Portuguese nationality, but on other occasions making it much more difficult, mainly due to legal and bureaucratic encumbrances.

However, a substantial amendment was made recently to the PNA through approval of Organic Law no. 2/2018 of 3 July, making matters much more comfortable for cases where married couples (including those under common-law marriage) with one of them being a Portuguese national, have children in common.

One of the changes in the PNA that made things easier in case of acquisition by marriage, is the barring of the possibility of opposition by the Portuguese Attorney General with the argument that the foreign spouse has no effective connection with the national community, whenever the couple has children in common.

Although the procedure may take its time for completion, this change in the PNA represents a tremendous fostering of the mechanism for acquisition of the Portuguese nationality, as it relinquishes the element of connection to the Portuguese community, which was in the past an essential burden of proof for eligible candidates.

To put it plainly, as long as the couples mentioned above provide the right documentation – which includes, among others, a declaration expressing the will to become Portuguese and a clean criminal record certificate –, the application for Portuguese nationality for the spouses and their underage children would not be subject to opposition from the Attorney General.

As visible throughout our website, our office has the necessary know-how in dealing with these complex matters with expediency and proficiency, and shall be more than happy to assist not only in cases involving acquisition of Portuguese nationality, namely through marriage, but also in those cases of acquisition of Portuguese residency through application of the Golden visa, which is also a popular gateway process for attaining the Portuguese citizenship on a long-term basis.

 

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The Cybersecurity Law

The Cybersecurity Law

Cybersecurity is a world-wide hot topic nowadays, and hence it is no surprise that progressively more and more countries are adopting relevant laws to regulate the matter.

As for the newly enacted Macau SAR´s Cybersecurity Law, published in the Official Gazette this 24 June 2019, although not publicly assumed, it follows the trend imposed by its PRC´s homonymous law, at least to a certain extent. The basic principles, duties and enforcement ideas are somewhat present. Nevertheless, the powers vested to the new regulatory supervising entities are still less comprehensive than those existing in PRC´s.

As the Region´s first comprehensive privacy and security body of rules over cyberspace, we are yet to fully discover the challenges that this new Law and its enforcement will pose, notably its articulation with the existing Personal Data Protection Law.

Nevertheless, despite being approved amidst some criticism and concerns regarding potential violations of basic freedoms, as it will only come into effect on 21 December 2019, there will hopefully be enough time to produce the set of regulations foreseen in the Cybersecurity Law and, most importantly, to quell the concerns with its implementation and enforcement.

At this stage it is however certain that, while bringing necessary regulation to prevent the failure of essential infrastructures for the security and the economy of the Macau SAR, the potential reach of the Cybersecurity Law and the duties imposed on operators of critical infrastructures mean that this new piece of legislation will present unprecedented challenges to local people as well as local and foreign businesses in Macau.

 

General Overview

The law is intended to determine and regulate the Macau SAR´s cybersecurity system, aiming to protect the networks, systems and computer data of the operators of critical infrastructure.

It provides for three levels of supervision:  the Commission for Cybersecurity (CPC) in a first level, the Cyber Security Incident Response and Response Center (CARIC) in an intermediate level, and the supervisory bodies, as the final level.

The CPC is the top political body, chaired by the Chief Executive of the Macau SAR, and will be responsible for defining the guidelines, objectives and strategies towards cybersecurity goals, as well as proposing and negotiating agreements and protocols that may be deemed necessary to guarantee the Region´s cybersecurity, with both local or foreign public and private entities.

The CARIC, a specialized structure for the prevention and handling of any cybersecurity incidents, shall be coordinated by the Judiciary Police, and is responsible for monitoring the computer data transmitted between the operators of critical infrastructure networks and the internet, aiming to prevent, detect and fight cybersecurity incidents.

Finally, the supervisory bodies shall be responsible for overseeing private operators by areas of activity (v.g. the Monetary Authority will inspect banks, the Health Services will inspect private hospitals, etc.).

The composition, powers and mode of operation of all these entities will be defined by the Chief Executive in complementary regulation, thus meaning that the real range of this Law (and the competence of the new entities related thereto) shall only be fully comprehended when those regulatory pieces of legislation are enacted.

 

Critical Infrastructures operators

The Cybersecurity Law is applicable to both public and private operators of critical infrastructures using computer networks or systems. The former generally include the Chief Executive´s Office and other holders of political and judicial offices, the Region´s public services and agencies. In turn, the latter include all private entities, with or without registered address in Macau, that are allowed to conduct business in Macau in certain key areas  which include, amongst others, banking, insurance and finance activity, healthcare services, gaming concessionaires, media (that are not exclusively aimed at broadcasting entertainment contents) and telecommunications.

 

Duties

Amongst the vast group of duties that the Cybersecurity Law imposes (organic duties, procedural, preventive and reactive duties, self-evaluation and report duties and collaboration duties), the most noteworthy are:

  1. allowing the representatives of CARIC or of the supervisory bodies to access their networks (without any prior judicial decision approving the said access);
  2. appoint a person in charge of cybersecurity, and its substitute, who shall be in constant contact with the regulatory supervising entities (being subject to a prior probity check);
  3. approve an internal cybersecurity plan and procedural guide aimed at the prevention, monitoring, report and reply to cybersecurity incidents;
  4. regularly check the security and the existing risks to its networks and systems;
  5. submitting an yearly cybersecurity report listing, inter alia, the cybersecurity incidents and the measures adopted to prevent new incidents;
  6. network operators must register the identification of the pre-paid SIM card users acquired before of the enactment of the law (or otherwise suspend service to such SIM cards);
  7. network operations must verify and register the identity of the clients upon the execution of agreements, confirmation of provision of internet access services, registration of domain names or public services of land or mobile telecommunications; and
  8. the internet services providers must keep, for a year, the network address translation records from private networks addresses into public network addresses.

Needless to say that the aforementioned duties will definitively bring implementation and maintenance costs to each of the entities covered by this new Law although, again, the full extent of such costs is still to be assessed, pending further regulation of the Cybersecurity Law.

 

Penalties for infractions

As for penalties, those in breach of the Cybersecurity Law may be fined up to MOP5 Million.

Other ancillary penalties may also be imposed on those in breach such as the loss of the right to supply products to the Government or to receive Government subsidies for a period of up to 2 years.

In addition, individuals in breach of preventive, reactive or procedural duties may see their employment suspended or terminated or sent to compulsory retirement.

 

Concerns raised with the implementation of the Cybersecurity Law

The major concern lies on the authority granted to CARIC, which is coordinated by the Judiciary Police, to conduct real-time monitoring of the computer data transmitted between the operators of critical infrastructure networks and the internet.

Considering that the operators of telecommunications infrastructures are subject to the Cybersecurity Law, this provision has raised fears of opening the door to real time monitoring of virtually every person and entity in the Macau SAR.

In addition, the Cybersecurity Law does not seem to implement any mechanism of oversight of CARIC’s actions, e.g. when monitoring data and accessing critical infrastructure operators´ premises and networks, which again poses the concern of unsupervised police action in extremely sensitive areas of the Macau SAR’s economy as well as unwarranted interference in the citizens’ privacy and personal data.

Without a streamlined oversight mechanism, citizens and companies will have to rely on existing channels (e.g. the Personal Data Protection Office, the Commission Against Corruption, the Public Prosecutors Office and the Courts), which also entails an additional level of uncertainty and, eventually, a long period of time before a final decision over a claim is obtained.

Finally, the requirement that the identification of all SIM card owners is registered, has also attracted criticism towards the abuses that such provision may lead to.

In any case, the Government has continuously maintained that it will only analyze the flow of computer data, meaning that, according to the Government, data will not be decoded nor freedom of expression and/or economic freedom and/or intellectual property rights will be affected.

In summary, in a world where cyber risks are a constant threat, there is definitively the need to implement a cybersecurity legal framework and to impose special duties of care to certain industries. However, only time will tell whether the Cybersecurity Law will serve its legitimate purposes or whether it will lead to abuse.

 

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REGISTRATION OF AIRCRAFTS IN MACAU

Civil aviation and aerial activities in the Macau SAR (“Macau”) are governed by the Civil Aviation Activity Regulation (Executive Order n. º 10/2014) which set forth the general principles for aerial operations in this jurisdiction, and by the Air Navigation Regulation (Executive Order n. º 64/2019) which determines the mandatory technical requirements to provide safe and effective operation by aerial transportation.

Internationally, Macau is a signatory of The Convention on International Civil Aviation, also known as the Chicago Convention, which established the International Civil Aviation Organization. Under this Convention Macao is subject to certain obligations relating to the operational safety of civil aviation.

On other hand, Macau is not part of the Convention on International Interests in Mobile Equipment, also known as the Cape Town Convention, whose purpose is to resolve the problematics of obtaining certain and opposable rights to high-value aviation assets, namely airframes and aircraft engines.

According to the Macau’s Civil Aviation Activity Regulation, commercial aerial transportation such as passenger aerial transportation, cargo and mail to and from Macau are formed as public service concession to be granted to an operator incorporated in Macau and duly certified by the Civil Aviation Authority of Macau (“AACM”). One of the operator’s main responsibilities is to request AACM the prior authorization to operate leased aircrafts in order to comply with AACM’s security standards.

It is under AACM’s scope the issuance, renewal and amendment of any certificates, authorizations or licenses related to aircrafts, as well as the admission of similar documents when issued outside of Macau.

Under Macau law, an aircraft to be authorized to fly in here must be mandatorily registered in (i) Macau, (ii) any country signatory of the Chicago Convention, or (iii) any other country in relation to which there is an agreement with the Macau Government.

As an aircraft can only be registered in one country, and in case the aircraft is to be registered in Macau, the AACM will require evidence that (i) the aircraft is new and shall be delivered by the manufacturer directly, or (ii) it is, or will be in the short-term, deregistered in the country of origin, in order to complete the respective registration procedures in Macau and subsequently have issued the required certificates.

Moreover, it is also mandatory for the lessee (the Macau company which will operate the aircraft, i.e. an airline) to be licensed as a Macau company, and to register the lease Agreement with the AACM.

Apart from the above mentioned registration and according to Law no.10/98/M, the aircraft shall have to be registered as well with the Macau Moveable Assets Registry (“Registry”). This registration shall disclose to the public the legal status of the assets and rights registered, and it is independent to the registration with AACM.

Under Macau law, the first registration to be made with respect to any asset is the ownership, which is mandatory with respect to all aircraft registered with AACM.

Subsequently, it is also possible to register a mortgage, lease and other rights or liens over the aircraft. However, it is only mandatory by law to register the ownership rights with the Registry. Important to note that as for any mortgages and other security interests, AACM will not handle/register the guarantees over the aircraft, but rather the Registry.

Finally, registration of the aircraft with the AACM will levy the payment of certain fees, notably for the issuance of the required certificates such as Certificate of Registration, Airworthiness, Station License and Noise Certificate. The same shall apply with each registration with the Registry (i.e. ownership, lease, etc.) which shall be subject to the payment of a registration fee of MOP5,000.00.

Change of Law nº9/1999 – Judicial Organization Law

Background:

The Government of the Macao Special Administrative Region (the “MSAR”) has recently approved an amendment to the Judicial Organization Law (Law no. 9/1999), which also includes some amendments to the relevant Judicial Proceedings Codes, by means of the Law no. 4/2019 that was published on the 4th of March 2019. This Law has entered into force on the 4th of April this year.

 

Overview:

Although Law no. 4/2019 accommodates different adjustments in the Judicial Organization Law, as well as in all Proceedings Codes currently in force in MSAR, one of the most relevant amendments introduced by this Law relates to the appeal requirements in the civil court proceedings.

 

Brief commentary:

Law no. 9/1999, also known as the Judicial Organization Law, regulates the essence of the MSAR’s Judicial Organization such as the structure, competence, hierarchy and composition of the MSAR courts, as well as the monetary thresholds up to which each Court may rule a decision without appeal (in Portuguese called “alçada”).

According to the rules in place in the MSAR jurisdiction, in order to appeal from decisions of the First Instance Court (the “FIC”) to the Second Instance Court (the “SIC”), and from decisions of the SIC to the Court of Final Appeal (the “CFA”), the law requires, amongst others, that the monetary amounts expressed for each case are above a certain figure.

Before Law no. 4/2019 has entered into force, the mentioned amounts were as follows:

SIC – MOP $50,000.00;

CFA – MOP $1,000,000.00.

 

However, with Law no. 4/2019, the abovementioned amounts were modified as follows:

SIC – MOP $100,000.00;

CFA – maintain MOP $1,000,000.00.

 

This means that nowadays for all court cases (except the criminal court cases which have a particular appeal mechanism), the said limits will apply, and as a consequence only court cases with financial values above the said limits are appealable either to the SIC or to the CFA.

In our view, an increase of the amount to appeal from FIC to SIC while the amount required for the appeal to CFA remains unchanged seems to be somehow inconsistent, in particular if we take into account that such amounts should be aligned with the economy of the MSAR, which in the past 20 years grew exponentially.

Another amendment concerning with this matter, relates to the new wording that was introduced by the Law no. 4/2019 to the number 2 of article 638 of the Civil Proceedings Code.

Before Law no. 4/2019 entered into force, in principle, confirmatory decisions awarded by SIC were not appealable to the CFA, unless the decision of the SIC breaches mandatory case law.

However, taking into account the new wording of number 2 of article 638 of the Civil Proceedings Code, we may conclude that almost all court decisions of the SIC will be eligible for appeal to the CFA.

Indeed, only the confirmatory decisions decided by SIC regarding the decisions of the FIC concerning formal matters of the case are unappealable.

This means that it is predictable an increase in the volume of the number of court cases pending in the CFA and consequently of the lead time of each Court case, is likely to be also higher, as the CFA court is only staffed by 3 judges.

Therefore, it seems that these amendments to the Civil Proceeding Code are neither aligned with the reality of MSAR nor with the available resources of the CFA, and as consequence we fear that disputes from now on will be pending for years in the MSAR Courts.

In light of the above, and taking into account that be Civil Proceedings Code is currently under legislative review, we hope that the Government of the Macau SAR and the Legislative Assembly will be able to reconsider the provisions in place, and proceed to solve these issues.