Unión EuropeaIn response to the uncertainty existing in international transactions, the European Union has issued two legal instruments of great interest.

In 1984, Spain issued the General Law for the Defence of Consumers and Users; a law that was intended to establish a set of measures able to resolve the various conflicts that could arise in this matter. Along with the judicial system, a “Consumers´ Arbitration System” was established as a means of resolving conflicts, which meant that out-of-court alternatives to the court system had been strengthened by our public authorities.

However, the European panorama of out-of-court resolution has left much to be desired in comparison with its Spanish equivalent.

It is Article 169 of the Treaty on the Functioning of the European Union (TFEU), which establishes that the Union should contribute to achieving a high level of consumer protection, ensuring access to simple, effective, fast and affordable ways to solve national and cross-border disputes arising from contracts for the sale or provision of services.

With this problem in mind, the European legislator has published two new legal instruments; the Directive 2013/11/EU, of the European Parliament and of the Council, of 21st may 2013, regarding alternative dispute resolution in the field of consumption, and the Regulation (EU) 524/2013, of the European Parliament and of the Council, of 21st may 2013, regarding online consumer dispute resolution.

The Directive 2013/11/EU provides for the promotion of institutions of alternative resolution (RAL) whose task would be to solve contractual disputes for consumers and traders online or offline, applying this legislation only regarding complaints from consumers against traders. It will be up to Member States to adjust their internal legislation in accordance with the Directive before July 9, 2015.

More ambitious is the Regulation (EU) 524/2013, which seeks to eliminate much of the trade barriers on the internet. Unlike the Directive, it covers both complaints from consumers and from traders and is expected to create a digital platform for the resolution of conflicts. The procedure will start on-line with a complaint and subsequently the parties must agree about which RAL entity will resolve the dispute. The regulation shall enter into force on the 9th of January 2016.

The introduction of these two instruments will no doubt be an important tool in the consolidation of safe international transactions.

Article by Mark Athos Franklin, native English lawyer at the Rodriguez Bernal law firm.
Rodriguez Bernal has ample experience dealing with both national and international consumer disputes. For more information, visit our website at http://www.rodriguezbernal.com/2011  or contact us directly at mathos@rodriguezbernal.com.

seanshambhattorneys.com_As you may already know, on the 20th of September a draft for a reform of the Spanish Penal Code was published, which, according to Minister for Justice, Alberto Ruiz-Gallardón, promises to “transform” this branch of the Spanish legal system.

The text covers a multitude of facets of criminal law, although its most distinctive feature seems to be an effort to stiffen penalties and create new offences.

In an effort to be concise, we could sum up the proposed reforms in the following manner:

1) Penalties are increased in cases of theft in the countryside.

2) New offences have been created, such as forced marriage or the disclosure of intimate images without consent of the victim.

3) There is a decriminalization of the minor offenses (faltas) of title III of the code. Some have been elevated to the status of more serious crimes, while others have been channeled into disciplinary administrative law.

4) The reform provides for a new form of punishment, called “reviewable permanent prison”.

5) The judge is given greater discretion with regards to crimes committed by minors.

6) The age of sexual consent is raised to 16 years old (from 13, one of the lowest in the world), although exceptions are suggested, such as when there is a similarity in the ages of the two participants.

7) The text envisages reforms with regards to other sexual offences, punishing customers of child prostitution, even if the offence is committed abroad and criminalizing the creation of internet pages that include links to illegal sites.

Nevertheless, some of the proposed amendments deserve special consideration:

1) Reviewable Permanent Prison: a punishment applied only for particularly serious crimes, such as genocide, crimes against humanity and the killing of the head of State or his heir or heads of State of foreign countries. In these cases, it is permitted to impose an undetermined term of imprisonment, although, upon the fulfillment of a significant part of the penalty, the sentence could be reviewed and changed depending on the circumstances.

2) Specific Criminalization of “Link Websites”: A specific criminal category has been created for these cases. Some commentators criticise this modification, which introduces a greater penalty (up to 6 years of prison) than that foreseen for violent sexual assault or facilitating child prostitution.

 

At the Rodriguez Bernal office, we have a department specialised in criminal law. For questions or doubts, visit http://www.rodriguezbernal.com/2011/index.php?lang=en or get in contact with us directly by email: mathos@rodriguezbernal.com.
Article by Mark Athos Franklin, native English lawyer at the Rodriguez Bernal legal practice.

images (4)The European Court of human rights (ECHR) ruled on October 10 that an Estonian court was correct when it condemned Delphi, a news web site featuring anonymous comments, as a result of the offensive nature of some of the comments that could be found there.

Delphi had published a story about a ferry company that decided to alter some of their routes and it´s website allowed visitors to the page to post their own comments. After realizing the threatening content of some of these comments, the company filed a case, obtaining an award of 5,000 krons. The Estonian Supreme Court supported the decision, followed also by the ECHR.

It is article is 10 of the European Convention of Human Rights that protects the right to freedom of expression, a right that has been violated by the ECHR according to opponents of censorship. They point out that the new precedent could affect any web page that lets visitors leave anonymous comments, affecting the very viability of this medium.

However, the content of article 10 of the ECHR should also be taken into account, as it includes “the protection of the reputation or rights of others” as the limit of the right to freedom of expression. Also, as noted by the ECHR, the web site had taken commercial advantage of the comments and did not take appropriate measures to filter them.

It remains to be seen to what extent this decision can alter the situation in other European countries, like Spain or the United Kingdom.

 

Article by Mark Athos Franklin, native English-speaking lawyer at the Rodriguez Bernal legal practice.

 

starting-small-businessIn response to the many doubts caused by the new Entrepreneur Support Act (Ley de Emprendedores), we offer the following answers to frequently asked questions about the fifty euro flat rate to be paid to Social Security under the new legislation, along with practical examples of it´s application.

 

1) Who can benefit from the €50 flat rate bonus? What are the requirements?

 

– The self-employed or the partners of associated work cooperatives in the RETA (Régimen Especial de Trabajadores Autónomos).

 

– 30 or more years old (a bonus already exists for people under the age of 30).

 

– Sign up to the RETA for the first time or sign up after not having been in the RETA in the five years immediately before.

 

– Not employ workers.

 

2) How much do you have to pay per month and for how long?

 

– 80% of the Social Security fee during the 6 months following the inscription in the RETA.

 

– 52% of the fee during the 6 months following the previous period.

 

– 30% of the fee during the 6 months following the previous period.

 

That is, these percentages are applied to the contribution base chosen by the self-employed person. For example, if you contribute to Social Security at the minimum rate, which is around €256 per month, this means that you will pay roughly €50 for the first six months, €130 for the following six and €180 in the following six. In total, 18 months reduction in the contribution to Social Security of the self-employed.

 

3) If someone has signed up to the RETA before the 29.09.2013, under what circumstances can they take advantage of the bonus?

 

The bonus is applicable for “new inscriptions” in the RETA and not those that took place before the 29.09.2013. However, if the self-employed person has not been signed up during the 5 years immediately preceding the date of new inscription, he or she can benefit from the bonus.

 

For example, a self-employed person signs up to the RETA on the 27.07.2013 and cannot take advantage of the bonus. Another self-employed person had been signed up for 6 months in 2002 and registers again now in October of 2013 and can take advantage of the bonus (he or she has been more than five years without being signed up to the RETA).

 

4) What about administrators (self-employed) of new companies and their family members? How much do they have to pay per month?

 

With regards to corporate administrators, it should be noted that, although the law does not expressly forbid the application of the bonus to this group, in practice the Social Security has chosen not to include them. Therefore, administrators of companies cannot take advantage of the bonus.

 

Being a family member of the owner of a company does not qualify you for the new bonus either. However, there is another bonus which was established in the labor reform of 2012 which created the figure of “self-employed contributors” (family members of company owners) and that applies a reduced rate of 50% to this group. This means a reduced fee of 128,37 euros a month instead of the usual 256,74 for those self-employed that collaborate in the companies of their relatives.

images (3)Again the highly controversial “Preferential shares” (or preferentes), are a subject of debate in all public forums, this time as a consequence of a judgement of the Provincial Audience of Vizcaya with regard to the bank “Santander”.

For those who are not aware of the evolution of these shares, perhaps it is convenient to sum up the situation which their owners have been left in.

Preferential shares are a hybrid product between equities and fixed income. This means that the remuneration that corresponds to the owner depends on the profit made by the bank or company that sold the share. Moreover, having no date of expiry, their owners are forced to sell their shares on the market if they want to recoup their investment.

The preferentes became fashionable for a time and were purchased by customers who were not usually engaged in the buying and selling of complex banking products. Sometimes these buyers invested their life savings believing that they would have a fixed remuneration or that the product had an expiry date. Following the economic downturn, the profitability of the preferentes disappeared and the only way to recover the investment was to sell them at an extraordinarily low price or exchange them.

Faced with this panorama, it is pleasant news that the Provincial Audience of Vizcaya has sentenced Banco Santander to return 100,000 euros to a buyer of preferentes, minus the amounts received and yields paid.

Initially, the Bank argued that the customer had sufficient financial expertise to acquire the preferentes, since he had a university degree and had bought a similar product before. However, quite rightly, the audience rejected this approach, considering that the mere fact of having completed higher education and having already bought some kind of banking product does not connote that the Bank does not have to inform the client thoroughly about the nature of what is being bought.

On the contrary, the Provincial Audience declares that banks are obliged to provide “sufficient customer information about the creation, operation and management of complex financial products “.

This judgement is promising for all those affected by the preferentes, though it is unknown to what extent other judicial bodies share the opinion of the Provincial Audience of Vizcaya. From this blog, we will keep stakeholders informed of any news on the subject.

 

For any doubts or queries, do not hesitate to leave a comment or to contact us at: mathos@rodriguezbernal.com.

Article by Mark Athos Franklin, native English lawyer at the Rodriguez Bernal legal practice.

images (2)Businessmen and the self-employed who undertake a business venture in Spain have reason to rejoice. The highly anticipated “Entrepreneur Support Act” has finally arrived, a legislative reform that promises to revitalize those sectors of the Spanish economy most affected by the economic crisis and facilitate both the day to day existence of entrepreneurs who are already in business as well as those who would like to start one up.

For too long, those who create the most jobs in this country have pointed out the great difficulties that exist in establishing oneself as self-employed or in creating a viable company. These obstacles are of many kinds, although overwhelming tax burdens and bureaucratic red tape figure highly on the list of complaints.

For this reason, the Spanish Parliament has given special attention to areas such as VAT, the protection of home ownership against liability, facilitating the creation of companies or the encouragement of foreign investment through easily obtainable residence permits. All these measures promise to unleash a vast entrepreneurial potential that probably will make its impact on the Spanish economy in the coming years.

In short, the most relevant aspects of the “Entrepreneur Support Act” are as follows:

1) Limited Liability Entrepreneurs.- Law 14/2013 recognizes the vulnerability of entrepreneurs´ homes, and therefore protects them against the claims of creditors up to the amount of 300,000 euros. However, as it stands, the new figure of the “ERL” (emprendedor de responsabilidad limitada) excludes cases of fraud or grave negligence.

2) Culture of Entrepreneurship.– Both in school and in the University, the law aims to promote attitudes and skills that will create the next generation of entrepreneurs. Take special notice of the so called the “mini company” which will allow students to learn how business activities take in a practical environment.

3) Residence Permits for Foreigners.- Existing administrative obstacles for investors or businessmen from non- EU countries that wish to install themselves in Spain have been simplified. This measure seeks to attract talent and investment from outside our borders. Also, advice will be provided to those entrepreneurs who would like to benefit from some kind of subsidy from international institutions.

4) Inclusion of More Companies in Public Contracts.- In response to the often excessive conditions that companies must meet to qualify for an administrative contract, the Government has sought to open this possibility to a larger range of companies. For this reason, the previous classification of companies in public competitions for contracts will only be required  for those contracts which exceed 500,000 euros, while it will also seek to establish unions of companies that can compete more successfully in these competitions.

5) Simpler Creation of Companies.- The creation of businesses using electronic means has been promoted and a series of simpler forms have been envisaged, streamlining the creation of companies to the point that it should be possible to complete the entire process in under 48 hours. The law also seeks to encourage employers to try again after a first business failure, introducing a series of measures and settlement agreements with creditors.

6) Delayed Payment of VAT.- Both the self-employed and businesses may not have to pay their VAT to Treasury until the bill in question has finally been paid by the consumer.

7)Gradually Established Limited Companies.- Before the reform, the law called for an initial outlay of 3,000 euros for the creation of a Sociedad Limitada. With the new law, the initial outlay will be reduced, allowing for subsequent contributions of 20% of the profits to make up the rest.

8) 50 Euro Flat-Rate: New self-employed workers can enjoy a bonus of 80% in the payment of their Social Security during the first 6 months of their activity, while there will also be financial bonuses for the disabled.

9) Tax Supports.- All kinds of tax incentives have been envisaged, whether they be with regards to the investment of profits, research, development and technological innovation activities, with regards to income from certain intangible assets or for the creation of employment for workers with disabilities.

For any doubts or queries, do not hesitate to leave a comment or to get in contact with us at mathos@rodriguezbernal.com.

Article published by Mark Athos Franklin, native English lawyer at the Rodriguez Bernal law practice.

european_union

It is no secret that the unfortunate reality of divorce is on the rise and, while modern marriages are significantly more stable than other sentimental arrangements, such as cohabitation, our legislators have made a great effort in recent years to reduce the angst and confusion surrounding divorce procedure.

A little known fact, however, is just how common so called “international divorces” have become. Statistics compiled by the newspaper ABC estimate that between eight and nine percent of Spanish divorces involve a foreign spouse, while between four and five percent involve two foreign spouses. It is for this reason that those English speaking residents considering filing for divorce in Spain may be curious to know more about the procedures involved, as well as the law which ought to be applied.

In these matters, it is absolutely essential to take into account recent European Union legislation, as the confusing panorama that existed between European countries in international divorce has become greatly simplified with the new Regulation 1259/2010, of the 20th December, which entered into force as recently as the 21st June 2012.

Before the entry into force of this EU Regulation, the Spanish Civil Code (article 107.2) declared that divorce ought to be governed by the law of the nationality which both parties have in common. In practical terms, this meant that if both spouses were nationals of the United Kingdom, the Spanish judge would have to apply British law, a state of affairs which often cost British ex pats large sums of money in legal costs and complicated the procedure considerably.

Quite wisely, EU legislators decided in the new Regulation to make the default law of application the law of the country in which the spouses reside in the moment of filing for divorce, greatly reducing legal costs (articles 5–8). However, foreign residents may still choose to have British law applied, if they expressly declare this preference.

However, it is to be noted that certain questions related to divorce have been excluded from the EU Regulation and continue to be regulated by the traditional system, such as custody of children or the economic effects of divorce.

It is also convenient to know in which country one should file for divorce. This is relevant, as it may be possible to choose between the courts of the United Kingdom and those of Spain and this choice may have a bearing on the speed of the process and even the outcome of the case.

In order to give a frame of reference, it is estimated that a divorce case in England usually takes about five to seven months to conclude and costs between one and two thousand pounds. On the other hand, those figures in Spain are one to two months (mutual agreement) and four to eight months (unilateral), the cost depending on the variables of the case. It is also worth noting that the economic expectations placed upon the financially “stronger” party in divorce proceedings tend to be greater in the UK than in Spain, while the “weaker” party will tend to benefit more.

At present, EU legislation (Regulation 2201/2003) allows one to file for divorce in any one of the following places:

a)   The habitual domicile of the spouses.

b)   The last habitual residence (as long as one of the spouses still lives there).

c)   The habitual residence of the defendant.

d)   The habitual residence of either of the spouses, if the divorce is by mutual agreement.

e)   The habitual residence of the plaintiff if he or she has lived there over the course of at least a year immediately before filing for divorce (only six months if he or she is national of that country or has their domicile of origin there).

f)    The country of both spouses´ shared nationality or domicile.

 

For any doubt or question you might have, feel free to leave a comment or to get in contact with us at mathos@rodriguezbernal.com.

Article published by Mark Athos Franklin, native English lawyer at the Rodriguez Bernal legal practice.

11640025-the-key-to-success-hand-holding-key-against-night-skyIn order to encourage both national and international investment, the Government has passed a draft of the new “law of entrepreneurs”. Although the draft is still awaiting final approval, the basic guidelines of the future law have been set, which include the development of business projects in Spain, as well job creation.

However, one of the most important measures adopted in this new regulation is the granting of residence permits to those who:

a) Create employment through the establishment and implementation of business projects;

b) Foreigners who invest in business projects that create jobs or who have a relevant impact from the perspective of socio-economic or scientific and technological innovation as well as if they made a significant investment or business of general interest project.

c) Invest in properteies located in Spanish territory in a quantity greater than €500,000 (total minimum investment, which can consist in the purchase of several properties).

d) Take on public debt amounting to € 2,000,000.

 

Other conditions that have been set are the following:

a) Not to be an EU citizen.

b) Not to be in Spain illegally.

c) Have no criminal records in Spain or in the countries where they have resided in the last five years.

d) Have either a public or private health insurance and sufficient economic resources.

e) The buyer must use their own capital and not have to resort to funding from other sources for the purchase.

 

The Government also intends to create a centralised office for those who request this type of residence permit, aiming to unify and streamline procedures.

Other important innovations include a specific tax regime for entrepreneurs, which will allow different tax incentives on income tax to be applied when investing in or financing start-ups. Also, the law will attempt to simplify and facilitate procedures for the creation and closure of companies.

 

CURRENT REGULATION

 

Until the above regulation enters into force, temporary residence permits will continue to be regulated be the Royal Decree 557/2011, of 20 of April, which applies to those foreigners who are in Spain legally for a period of between ninety days and five years.

The initial residence permit has a duration of only one year and applicants must comply with a series of legal criteria (not be in Spain illegally, not have a criminal record for crimes committed in the last five years, etc.) and must hand in a multitude of documents (passport, professional qualifications, etc.)

From Rodriguezbernal.com we will keep readers up to date with the legal reforms that will come about with the entry into force of new laws in this area, as well as for more details of the current procedure for setting up a company in Spanish territory.

 

Article by Mark Athos Franklin, native English lawyer at the Rodriguez Bernal legal practice.

images (1)NEW EU REGULATION ON INHERITANCE

 

Foreign residents in Spain should know that a new EU Regulation on inheritance has been approved as of the 4 of July 2012. The regulation will apply from the 17 of August 2015 and although, for the moment, the United Kingdom, Irland and Denmark have chosen not to take part, citizens from these countries living in Spanish territory could be affected.

The Regulation nº 650/2012 introduces several novelties that could be of interest to the different ex-pat communities.

For example, whereas current legislation would force a foreign resident´s inheritance to be treated according to the law of his or her nationality, the new EU Regulation would apply the law of the country of habitual residence (except when there is a manifestly stronger link with another country). However, it is worth noting that it shall also be possible to order expressly in a will that the person´s national law be applied instead.

This fact will have important ramifications due to differences between Spanish law and the inheritance laws of many of the countries to which the Regulation will be applied.

Most importantly, Spanish law places significant restrictions on the freedom to dispose of one´s possessions by will, as it forces the deceased to leave a full two thirds of his or her property to the children, leaving only one third to be disposed of as he or she sees fit.

It is for this reason that it is highly recommended that foreign residents make a will designating their national law, if they hope to have the same freedom to leave their assets to whomever they like that they would have in their home country. Good estate planning will allow the inheritance process to progress more smoothly, avoiding unnecessary costs and delays and minimizing the chances of a will being contested.

Similarly, the new Regulation allows the courts of the country of habitual residence to judge with regards to the inheritance, except when the parties concerned agree to that the courts of the country whose law has been chosen should be competent.

Article published by Mark Athos Franklin, native English lawyer at the Rodriguez Bernal law firm.

imagesREFORM OF THE TENANCY LAWS

 

A much needed reform of the tenency laws has already entered into force. Given the fact that many Spaniards and ex-pats have chosen to invest their savings in real estate, while others do not have the means to buy their own housing in Sapin, the reform is a step in the right direction to meeting the needs of all parties. Therefore, law makers have sought to facilitate the leasing of many of these empty homes by altering the rights and obligations of each of the parties in the tenency agreeament..

The main novelties of the reform (law 4/2013, of 4 of June) are as follows:

1) The obligatory express extension of the contract goes from being five years to only three years, while the automatic “tacit extension” goes from being three years to only one year.

2) Faster eviction. In the event of non-payment, the eviction procedure can put into effect in just ten days. However, the tenant can avoid eviction if he or she pays the rent which is owed.

3) The tenant may leave the accomodation, after at least six months, as long as he or she gives warning at least one month in advance and without having to pay indemnities.

4) Landlords may reinstall themselves in the property if the accommodation becomes indispensable either for the landlords themselves, a first degree relative or a spouse (after a divorce or annulment).

5) After buying a property that is being rented, the buyer does not have to respect the terms and conditions of the tenency agreement. However, these terms and conditions will have to be respected if the contract has been registered in the land registry (registro de la propiedad).

6) If a tenant proposes a reform of the property, an agreement may be reached with the owner so that the cost of the reform is discounted from the monthly rent payments.

7) The tenency contract can be registered in the land registry, as a means of sealing the agreement.

8) A late payment register has been created which will allow landlords to find out which potential tenants have already disrespected previous tenancy agreements.

9) From June 1 2013, it is mandatory to have an “energy efficiency certificate” to be able to sell or rent real estate for more than four months.

 

HOLIDAY RENTALS

 

Lastly, one of the most controversial aspects of the reform is that it has suppressed the express acceptance that the old law made of so called “holiday rentals”.

It is no secret that the last few decades have produced a new trend of foreign tourists staying in rental accomodation during their holiday, instead of going to hotels. In 2011, for example, the growth of holiday rentals was 14.8%, while in 2012 the increase was 8.7%.

The decision to eliminate the express mention of theis possibility in the law is probably due to the hotel lobby, which loses significant profits with the popularity of rental accommodation. However, it has been suggested that such a move has infringed the rights of home owners who seek a viable solution to the unfavorable economic situation which we find ourselves in and who struggle to pay their mortgage.

Undeniably, there exists an underground market for these rentals, where taxes on rentals are not paid to the Spanish state, and this illegal leasing by seasons seems especially prevalent in coastal areas. It is estimated that this kind of fraud could amount to nearly to 2.926 billion euros. However, it has yet to be seen whether future laws will offer increased legal protection to those landlords who merely seek to lease their property in the proper legal conditions, avoiding any tax fraud.

Article published by Mark Athos Franklin, native English lawyer at the Rodriguez Bernal law firm.

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