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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.

Acquisition of Portuguese Nationality

ACQUISITION OF PORTUGUESE NATIONALITY

 

More and more, either for tourism or for investment purposes, Portugal has become a considerably relevant destination chosen by foreigners from all over the world.

Being the westernmost country in Europe, this nation, primarily known for its welcoming weather, long history and bathed by the Atlantic Ocean along its extensive coast, is now experiencing explosive economic growth, namely in terms of tourism, real estate and technological perspectives.

Although there is facilitated  access to the  country, which  is possible after either obtaining a tourist visa (permit to enter and stay for a limited period of time) or an investment visa (especially golden visas, which allow foreigners to obtain legal residency permission in Portugal, mainly by  investing  a minimum   amount  of  500.000€  in  real  estate  property),  only  acquisition of the Portuguese nationality  will  allow a  foreigner to obtain the equality of rights ensured to a Portuguese citizen.

Therefore, those who wish to become Portuguese nationals and fulfil the requirements to acquire Portuguese nationality will especially benefit from:

  1. The same constitutional rights and obligations assured to Portuguese citizens, namely fundamental rights that characterize a democratic state governed by the rule of law (encompassing rights such as life, freedom of expression, vote, work, social insurance benefits, health and housing), including the exercise of political rights and non-technical public functions, as well as those other rights and duties that the Constitution or the law exclusively reserve for national citizens, and which are denied explicitly to third-country nationals and stateless persons.
  2. Becoming a European Union citizen. A Portuguese national is simultaneously a citizen of the European Union (“EU”), which ensures a number of individual rights and duties at the European level, namely the free movement of people, goods (exempted from  taxes, customs duties and other  official charges), services and capital, the right of residency, and the right to work in any one of the 28 European Member States, as well as being entitled to the right of protection  provided by the diplomatic or consular authorities  of any Member  State when staying at non-EU countries, under the same conditions, when there is no diplomatic representation of the citizen’s home country.
  3. Access to the Schengen area without a visa. Similarly, Portuguese citizenship also guarantees entrance to the entire Schengen area, in other words, free movement of people without border control among the 26 members of the Schengen Agreement, without having to apply for a visa. Not only most Member States of the EU (all State Members, with the exception of Bulgaria, Romania, Cyprus, Croatia, Ireland and Great Britain) signed the Schengen Agreement, but also Iceland, Liechtenstein, Norway and Switzerland, which are not part of the EU. Consequently, any Portuguese citizen is allowed to legally live in any one of 26 Schengen area countries, four of which are not part of the EU.
  4. Dual citizenship. Portuguese nationality can simultaneously be cumulated with any existing nationality, allowing the dual citizenship regime to operate freely (except if forbidden by other countries) and therefore, by becoming a Portuguese national a citizen does not automatically lose his or her previous nationality.

There are four different ways which legally allow a person to acquire Portuguese nationality: (i) acquisition of citizenship due to birth circumstances (called “citizenship of origin”), (ii) acquisition of the citizenship through naturalisation, (iii) acquisition by declaration (a person fulfilling specific requirements, declares that he or she wishes to become Portuguese); and (iv) acquisition due to adoption.

 

  1. A) PORTUGUESE NATIONALITY ACQUISITION BY BIRTH

First of all, Portuguese nationality can be acquired depending on birth circumstances by those who are either:

  1. children with at least one Portuguese parent, either born in Portugal or in a foreign country (after birth registration with the Portuguese Civil Registry Office or a written declaration of will to become a Portuguese citizen), including the ones who were born in a territory under Portuguese administration;
  2. born before 8 October 1981, in a territory under Portuguese administration; or
  3. born outside Portugal, descendants of at least one Portuguese grandparent who possesses Portuguese  nationality and have significant connection with Portuguese community (e., has sufficient  knowledge of the Portuguese language, regular contacts with the country, and has not been convicted of a crime punishable under Portuguese law with imprisonment for three years or above), after having his birth registered at the Portuguese Civil Registry; or
  4. citizens born in Portugal with a foreigner parent also born in Portugal, in the condition that specific requirements regarding the residency status of their parents are met;
  5. born in Portugal and do not possess any other nationality.

This is an option which has retroactive effects, which means that its effects are produced from the moment of the citizens’ birth, without prejudice of the validity of juridical relations established before and based on another nationality.

If the citizen’s birth conditions do not fulfil all the requirements established in order to claim Portuguese citizenship by birth (as enumerated above), the citizen may also apply under certain other circumstances detailed bellow: through the mechanism of naturalization, by having a legally recognized relationship with a Portuguese citizen, or even by being adopted.

 

  1. B) PORTUGUESE NATIONALITY ACQUISITION BY NATURALIZATION

Unlike acquisition by birth, the consequences of Portuguese nationality acquisition by naturalisation only start taking effect from the moment of registration of the required acts or facts on which they depend. Therefore, the right to Portuguese citizenship is ensured and can be requested by those who are either:

  1. of legal age or with legal capacity according to the Portuguese law; legally living in Portugal with a valid residence permit for at least five years; with sufficient knowledge of the Portuguese language; has not been convicted of a crime punishable under Portuguese law with imprisonment for three years or above; and does not represent  any danger or threat to national security (g. being involved in terrorist activities);
  2. of legal age or legal capacity according to the Portuguese law; has not been convicted of a crime punishable under Portuguese law with imprisonment for three years or more; and does not represent any danger or threat for national security or defence; provided that  he or she was in the past a Portuguese national (who has lost the Portuguese citizenship status and who has not in the meantime acquired a different nationality);
  3. of legal age or legal capacity according to the Portuguese law; has been living in Portugal for the past five years and was also born in Portugal, child of a foreigner parent who was living in Portugal at the time of his birth; with sufficient knowledge of the Portuguese language; has not been convicted of a crime punishable under Portuguese law with imprisonment  for three years or more; and does not represent any threat for national security;
  4. of legal age or legal capacity according to the Portuguese law; has not been convicted of a crime punishable under Portuguese law with imprisonment for three years or more; does not represent any threat for national security; and who, not being a stateless person, (i) has been in the past a Portuguese national, or (ii) is considered descendant of Portuguese citizens, or (iii) is a member of a community  with  Portuguese ascendancy, or (iv) has rendered  or is required  to render relevant service to the Portuguese Republic or to the national community;
  5. of legal age or legal capacity according to the Portuguese law; has not been convicted of a crime punishable under Portuguese law with imprisonment for three years or more; does not represent any threat for national security; and who is a Sephardic Portuguese Jew descendant, with evidence of his or her heritage and allegiance to any Sephardic Community with  a Portuguese origin;
  6. of legal age or legal capacity according to the Portuguese law; with sufficient knowledge of the Portuguese language; has not been convicted of a crime punishable under Portuguese law with imprisonment for three years or more; does not represent any threat for national security; has been living in Portugal for at least 5 years prior to the application and has one descendant of Portuguese nationality acquired by birth.

 

  1. C) ACQUISITION OF PORTUGUESE NATIONALITY BY DECLARATION:

The following individuals are ensured Portuguese nationality:

  1. a foreigner who has been married for more than three years to a Portuguese national, by declaring his or her will to acquire Portuguese citizenship while married; or
  2. a foreigner who, at the time of the declaration, has been living with a Portuguese national under the common-law marriage regime for more than three years (duly recognised by a judicial decision of a court law); and
  3. those who have lost Portuguese nationality as a result of a declaration made during a period of legal incapacity may acquire it, when capable, by declaration.

 

  1. D) ACQUISITION OF PORTUGUESE NATIONALITY ACQUISITION BY ADOPTION:

A foreigner who was adopted abroad by a Portuguese citizen, after having the adoption’s foreign court decision duly confirmed by a Portuguese court of appeal, acquires Portuguese nationality without further legal constraints.

 

Based on the foregoing considerations and in light of the different Portuguese nationality acquisition mechanisms, let us now analyse the specific situation of citizens who were born in Macau, particularly in view of the transfer of sovereignty from Portugal to the People’s Republic of China on December 1999, taking into account the several legislative amendments approved in terms of Portuguese nationality regulations.

 

  1. E) ACQUISITION OF PORTUGUESE NATIONALITY ACQUISITION, SPECIFICALLY BY CITIZENS WHO WERE BORN IN MACAU:

On 20 December 1999, the sovereignty over the Macao Special Administrative Region (“MSAR”) was transferred from the Portuguese Republic to the People’s Republic of China, in compliance with the Joint Declaration on the Question of Macau signed in 1987 by both countries. In order to ensure a smooth transition, it was agreed that the Macau residents who were born in Macau and had already acquired Portuguese citizenship before the handover date would be able to maintain and use their Portuguese travel documents (which are granted only to Portuguese nationals in accordance with the law).

According to Law no. 37/81 of 3 October (which came into force on 8 October 1981), to acquire Portuguese nationality a citizen born in Macau has to meet one of the two following criteria:

  1. either be born in Macau until 8 October 1981, entitling the same to Portuguese nationality acquisition by birth; or
  2. if born from 8 October 1981 onwards, has least one Portuguese parent.

It is important to emphasize that amongst other conditions, and in order to exercise such right, it is necessary for individuals under this condition to provide evidence of previous registration of the citizen’s birth with the competent authorities at the place of birth, and that the relevant records state unequivocally the name of the parent who has Portuguese nationality.

In conclusion, after demonstrating the different advantages and generically listing the most common legally-established situations of acquisition of Portuguese nationality – as well as their mandatory requirements – it is possible to assert that each individual’s case has its own specificities, which require an individual analysis of the relevant circumstances in order to determine the best course of action.

 

New Regime of Financial Leasing Companies

In order to meet the development needs of today’s financial leasing industry in Macau, as well as revitalize the local financial leasing system, the Macau SAR Legislative Assembly enacted Law No. 6/2019, “Legal Regime of Financial Leasing Companies” and Law No. 7/2019, “Tax Incentives Regime for Financial Leasing Companies”.

Both laws were published in the Macau SAR Gazette on April 8, 2019 and became effective on April 9 of the same year, replacing the existing Decree-Law no. 51/93/M that came into force more than 20 years ago.

 

Redefinition into financial institutions

The new law (Law No. 6/2019) changed the legal position of financial leasing companies. Instead of qualifying the financial leasing companies as credit institutions, those institutions are now considered financial institutions, leading to more relaxed and different regulatory requirements than the ones previously applicable, and thereby revising the respective regime towards the development needs.

In addition, the new law adds the concept of subsidiaries for the purposes of financial leasing, the existence of which is subject only to prior communication to the Monetary Authority of Macau (“AMCM”). This being said, the banks and financial leasing companies authorized to operate in the Macau SAR are now allowed to incorporate subsidiaries to hold and manage specific financial leasing projects, so as to facilitate the business operations of the same. The operation of these subsidiaries does not require licensing, but a mere communication to AMCM.

 

Authorized activities

According to article no. 3 (1) and (2) of Law No. 6/2019, both financial leasing companies and subsidiaries besides the business of financial leasing per se, may engage in the disposal and management of leased assets, exchange operations, interest rate and currency swaps, as well as in any other activities, provided that there is prior authorization from AMCM.

Similarly to what happened with the previous Decree-Law no. 51/93/M, financial leasing companies shall not receive deposits or other repayable funds from the public. Therefore, the provisions of article no. 121 of the current Financial System Act (Decree-Law no. 32/93/M) regarding the crime of unauthorized acceptance of deposits or other repayable funds shall remain applicable.

The financial leasing business shall remain exclusive object of these entities, and therefore it is expressly prohibited for any person or entity to engage in leasing business without prior authorization to do so from AMCM. Thus, it is also prohibited to any person or entity that has not been authorized to do so, to include in his firm or to use in the exercise of his activity, words that express or imply that his corporate object is the activity of financial leasing.

 

Share capital reduction

As the previous regulatory regime did, the new law provides that financial leasing companies are to be established in the form of either private or public companies. At the same time, the new law stipulates that the minimum share capital requirement for the incorporation of financial leasing companies shall be 10 million Patacas, which represents a decrease of 20 million Patacaswhen compared to the previous minimum amount provided by Decree-Law no. 51/93/M, which means the lowering of barriers and, therefore facilitating the entry of qualified participants in the market.

However, the new law does not ease the requirements regarding the subscription and payment of the share capital, which according to article no. 7 (2) should be fully paid up upon incorporation of the company.

In addition, in order to prevent financial leasing companies from becoming shell companies, the new law requires at least one member of its administration body to have habitual residence in Macau.

 

Exemption of Stamp Duty and Complementary Income Tax (Law no. 7/2019)

The acts of incorporation of financial leasing companies or of subsidiaries established for the purpose of financial leasing, as well as those relating to the increase or reinforcement of the share capital shall be exempt from the payment of stamp duty. In addition, any contracts of financial leasing regarding capital goods, excluding real estate, are also exempt from stamp duty.

Finally, leasing financial companies are also exempt from payment of stamp duty on the transfer of assets with consideration, of real estate properties intended exclusively to be used as office of the company. However, each financial leasing company may only enjoy the said exemption on one property and only up to the maximum exemption amount of MOP 500,000.00 (five hundred thousand Patacas).

Regarding complementary income tax, it should be noted that a fixed rate of 5% applies to the income obtained from the financial leasing activity. This 5% tax is not applicable once the respective income is earned abroad and it is taxed there.

 

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THE NEW TAXI LAW

Aiming to meet the needs of the population and the concerns of entrepreneurs in the segment of the passenger transport by taxi, Law no. 3/2019, published on the 4th March this year, approved the new legal regime for the taxi service activity that will enter into force on the 3rd of June 2019.

 

GENERAL FRAMEWORK

From the analysis of this new legal regime, we highlight the legislator’s initiative to attempt for the consolidation, in a single Law, of the legal framework for the transport of passengers by taxi (although it does foresee the need for complementary regulation), thereby reducing legal uncertainties associated to the previous regulatory framework, which was spread throughout several separate diplomas – some of which older than 30 years – and whose loopholes the Macau Administration attempted to tackle on the specifications of the public tenders launched from time to time to award administrative authorisations to carry out the provision of taxi services.

The new legal regime for the taxi service activity has also introduced significant changes in the licensing procedures and has strengthened the enforcement mechanisms, as well as introduced tougher fines in case of breach of activity requirements.

 

NEW LICENCE MODEL

Only commercial companies incorporated in Macau, with a minimum share capital of MOP5,000,000.00 and exclusive business scope dedicated to taxi services are eligible candidates to be awarded with a license to carry out the taxi service activity.

As for the award of the licences, the new law sets forth that in principle the same shall be granted by means of a public tender organized by the Transport Bureau. Such kind of public tenders must be announced in the Official Gazette up to 30 days before the date of the call for tender.

It is important to note that the new law foresees two types of licences – a general licence and a special license – both provided for fixed periods of time and without possibility of renewal.

Moreover, these new licences cannot be assigned or charged in favour of any third party.

The distinction between the two types of licences takes into account the places where the licence holders are authorized to pick up or to drop passengers. Therefore, holders of the general licence may pick up and drop passengers everywhere with the exception of those prohibited by law, whereas holders of the special licence may only do so at the places specifically indicated in their respective licences.

It should be noted, however, that the mere ownership of one of these licences is not sufficient for a company to start its business operations, as licence holders are required to apply – in accordance with their respective licences – for the permits of the vehicles that are intended to be assigned to the taxi activity.

 

THE TRANSITIONAL REGIME

With respect to existing permits, the new law allows the current license holders to continue carrying out the taxi activity, and if such permits are subject to a validity period, they may do so only until the expiration of their term or of its renewal term. Moreover, the assignment or charge of such licenses is also still allowed – however from now onwards such kind of agreements are required to be executed in writing and a notice of the same shall be made to the Transport Bureau.

According to the new law, current license holders have a period of 18 months counted from the date of the entry into force of the complementary regulations, to upgrade the respective taxis with the mandatory equipment that is defined by the new law, such as the global satellite navigation system and the sound and image recording system.

Lastly, holders of a professional taxi driver licence must, upon entry into force of the taxi law, apply at the Transport Bureau for the replacement of their former licences by taxi driver identification cards. Failure to do so will bar the existing taxi drivers from paying the annual tax fee, which will only be possible after the present licence is substituted by the new identification card.

 

André Castanheira Pinto
David Sá Machado