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Spanish Companies Act Development: Minimum Dividend Distribution

Following latest law developments, Spanish regulation on minimum dividend distribution obligation becomes in force again. Under certain circumstances, if shareholders do not resolve to distribute at least 1/3 of the legally distributable operating profit of the preceding financial year, any shareholder having requested for dividend shall be entitled to claim the right of separation.

Advocate General: Spanish "floor" clauses in morgtgage contracts are lawful

Source: Court of Justice of the European Union

The following information has been just published at the Court of Justice of the European Union, pending publication of the full text of the Advocate`s General Opinion. Note the Opinion is not binding on the Court of Justice (Advocate General proposes to the Court a legal solution to the case). The Judges of the Court are now beginning their deliberations in this case. Judgment will be given at a later date:

“According to Advocate General Mengozzi, the temporal limit on the effects of the invalidity of ‘floor’ clauses included in mortgage loan agreements in Spain is compatible with EU law.

This limit is justified by the macroeconomic issues associated with the scale on which those clauses are used In Spain, many individuals have initiated judicial proceedings against financial institutions seeking a declaration that the ‘floor’ clauses inserted in mortgage loan agreements concluded with consumers are unfair and that, consequently, they are not binding on the consumers.

The clauses in question provide that, even if the interest rate falls below a certain threshold (or ‘floor’) defined in the agreement, the consumer must continue to pay minimum interest equivalent to that threshold, without being able to benefit from a lower rate. By judgment of 9 May 2013, the Tribunal Supremo (Supreme Court, Spain) held the ‘floor’ clauses to be unfair, given that the consumers had not been informed properly about the economic and legal burden which the contract would place upon them. Nevertheless, the Tribunal Supremo decided to limit the temporal effects of the declaration of invalidity of those clauses, so that they would have effect only for the future, as from the date of delivery of the abovementioned judgment. Some of the consumers affected by the application of those clauses are asking for repayment of the sums they claim have been unduly paid to the financial institutions from the date on which their loan agreements were concluded. The matter having been brought before them, the Juzgado de lo Mercantil no 1 Granada (Commercial Court No 1, Granada, Spain) and the Audiencia Provincial de Alicante (Provincial High Court, Alicante, Spain) ask the Court of Justice whether the limitation of the effects of the declaration of invalidity from the date of delivery of the judgment of the Tribunal Supremo is compatible with the Directive on unfair terms, given that, according to that directive, such clauses are not binding on consumers. In his Opinion, Advocate General Paolo Mengozzi takes the view that the directive does not seek to harmonise the penalties applicable in the event that a term is found to be unfair and, therefore, does not require Member States to provide for the retroactive invalidity of such a term. Similarly, the Advocate General notes that the directive does not define the circumstances in which a domestic court may decide to limit the effects of decisions in which a term is found to be unfair. Therefore, it is for the internal legal order of the Member States to define those circumstances, subject to compliance with the EU law principles of equivalence and effectiveness.

With regard to the principle of equivalence, the Advocate General notes that the Tribunal Supremo does not limit the temporal effects of its decisions only in disputes involving EU law. On the contrary, it is common ground that that court has already made use of such an option in purely internal disputes. With regard to the principle of effectiveness, the Advocate General takes the view that, given that they constitute penalties having a deterrent effect on sellers or suppliers, the prohibition of ‘floor’ clauses as from 9 May 2013 and the obligation to repay the amounts unduly received from that date contribute to achieving the objectives pursued by the directive.

Moreover, the Advocate General recognises that, when ruling on the temporal effects of its decision, a national supreme court may balance consumer protection with macroeconomic issues associated with the scale on which ‘floor’ clauses are used. In that context, the Advocate General takes the view that, exceptionally, a temporal limit on the effects of the invalidity of an unfair term may be justified without upsetting the balance in the relationship between consumers and sellers or suppliers.

In those circumstances, the Advocate General suggests that the Court should hold that the temporal limit on the effects of the invalidity of ‘floor’ clauses included in mortgage loan agreements in Spain is compatible with the directive.

How will BREXIT impact?: Risks & Opportunities

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We all know that Britain vote for the BREXIT, i.e. to leave the European Union yesterday, will bring a period of uncertainty, changes and insecurity.

We AMBER LBA, are working to advise our not only  to assess the risks  to face on their legal position, investments, etc., but  also to identify and seize the opportunities that changes to come will bring.

We work closely with our clients in the identification of opportunities and managing risks, either on their current position or assessing the planning for their investments and future interests with 360-degree approach.

We know that a comprehensive assessment must cover, among other areas, financial, accounting, legal, tax, asset valuation, labor, together as applicable to  our client’s business interests and strategy.

Anticipating problems and challenges ahead and getting preventive professional advice facilitates decision-making, generates savings in time and money, reduces conflicts and improves processes.

We in AMBER LBA know that time-to-market is essential for our clients. We advice and support our clients to improve their market position and manage the risks affecting them in highly competitive business arena.

We from Amber LBA offer the support of our professionals who will be pleased to provide as much information and specialized advice through  our  usual communication channels You can also contact us at info@amberbas.com.

Spain shall amend its Consumer Law

The European Commission is requesting Spain to bring its national laws on civil procedure regulating mortgage enforcement and payment orders in line with EU Consumer Law.

The aim of the Commission’s action is to ensure that consumers are fully protected against unfair contract terms.

The Directive (Council Directive 93/13/EEC) on unfair terms in consumer contracts guarantees that, whenever the contract has not been individually negotiated, the consumer is not bound by unfair terms.

A contract term is considered unfair if it is significantly imbalanced and against the requirement of good faith.

Member States must make sure that national law provides effective means to enforce these rights and that such unfair terms are no longer used by businesses.

Whilst welcoming the changes that the Spanish authorities brought to the civil procedure, following the Court of Justice’s Mohamed Aziz (C-415/11) ruling of March 2013, the Commission still has a number of concerns. If Spain fails to reply in a satisfactory way within two months, the Commission may send to the Spanish authorities a reasoned opinion.

Source: European Commission

Updated FATF List. Jurisdictions with strategic AML/CFT deficiencies. February 2016

Last week, the ultimate FAFT Plenary meeting was held in Paris (France). A new Public Statement was produced identifying jurisdictions that may pose a risk to the international financial system.

In order to facilitate the adaptation of the lists, we have included a comparative table including the latest Public Statement of the high-risk and non-cooperative jurisdictions (October 2015) and the one passed last week.

 

 

Updated FATF List. Jurisdictions with strategic AML/CFT deficiencies. October 2015

Last week, the ultimate FAFT Plenary meeting was held in Paris (France). A new Public Statement was produced identifying jurisdictions that may pose a risk to the international financial system.

In order to facilitate the adaptation of the lists, we have included a comparative table including the latest Public Statement of the high-risk and non-cooperative jurisdictions (June 2015) and the one passed last week.

BITCOIN is exempt from VAT in Europe

 

 

The European Court of Justices has ruled today that

  1. transactions which consist of the exchange of traditional currency for units of the bitcoin virtual currency and vice versa, in return for a price (on the one hand, paid by the operator to purchase the currency and, on the other hand, the price at which he sells that currency to his clients), constitute the supply of services for consideration (art. 2 (1) (c) of Council Directive 2006/112/EC of 28 November).
  2. such transactions are exempt from VAT in accordance with article 135 (1) (d) of Directive 2006/112.

Source: ECLI:EU:C:2015:718

 

Virtual coins are very controversial since for several reasons.

This week it has been reported that the ONIF (National Bureau of Fraud Investigation) is requestingIn Spain, this week has been reported that the ONIF (Nacional Bureau of Fraud Investigation) is requiring information from businesses that accept payments with bitcoins.

Meanwhile, FATF has just published yesterday a new report on Emerging Terrorist Financing Risks indicating there is an increase on the use of virtual currencies and other “anonymous” means of payment by terrorist organizations

Updated FATF List. Jurisdictions with strategic AML-CFT deficiencies

 

The FATF (Financial Action Task Force, also known as GAFI, its French acronym)  met in Brisbane (Australia) and held (on 24-26 June, 2015) its XXVI Plenary meeting.

 

In this meeting, the FATF has updated his public statement identifying jurisdictions with strategic deficiencies in anti-money laundering and couuntering the financing of terrorism measures (AML/CFT). Authorities and entities subject to AML/FT measures shall adapt their processes to the new changes.

 

 

Switzerland and the EU sign tax transparency agreement

Today Switzerland and the EU signed a tax transparency agreement in order to improve the fight against tax evasion.

Under the agreement, they will automatically exchange information on the financial accounts of their residents from 2018 ending Swiss bank secrecy for EU residents and preventing tax evaders from hiding undeclared income in Swiss accounts.

Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxation and Customs, said: ” The EU led the way on the automatic exchange of information, in the hope that our international partners would follow”

The automatic exchange of information is one of the most effective instruments for fighting tax evasion. It provides tax authorities with essential information about their residents foreign income.

Under this  agreement, Member States will receive, on an annual basis, the names, addresses, tax identification numbers and dates of birth of their residents with accounts in Switzerland, as well as other financial and account balance information.

This tax transparency instrument should not only improve Member States’ ability to fight tax evasion, but it should also act as a deterrent against hiding income and assets abroad to evade taxes.

This agreement is fully in line with the strengthened transparency requirements that Member States agreed amongst themselves last year. It is also consistent with the new OECD/G20 global standard for the automatic exchange of information.

The Commission is currently concluding negotiations for similar agreements with Andorra, Liechtenstein, Monaco and San Marino, which are expected to be signed before the end of the year.