New measures to prevent and combat unauthorised financial activity and ensure consumer protection
Law no. 78/2021 of 24 November which establishes measures to prevent and combat unauthorised financial activity and ensure consumer protection
On the 24th of November, Law no. 78/2021 of 24 November was published (hereinafter "Law no. 78/2021") which establishes measures to prevent and combat unauthorised financial activity and ensure consumer protection.
The main purpose of this law is to establish a complementary legal framework to protect consumers against the offer of products, goods or the provision of financial services by a person or entity not authorised or registered to carry out that activity. In this sense, this regime also establishes duties for entities that professionally perform activities regulated by the financial sector legislation, as well as for registrars, notaries, solicitors, lawyers, registration officers or chambers of commerce and industry.
For this purpose, we highlight the main obligations which arise from this diploma:
- Duties of registrars, notaries, solicitors, lawyers, registration officers or chambers of commerce and industry:
- Duty to consult with the Bank of Portugal (hereinafter "BoP") whenever they intervene in acts, contracts or documents which, by their nature, may be related to: (i) the attempt or performance of unauthorised financial activity, namely in loan agreements or declarations of assumption or confession of debt; (ii) financial leasing contracts; iv) contracts for the purchase and sale of immovable property associated with a contract of lease to the seller or transfer of ownership to the original seller; and v) contracts for the purchase and sale of immovable property or movable property subject to registration which do not involve the granting of a loan by entities qualified to carry out credit activity, whenever the purchaser has already been a seller of the same property, or the lease or usufruct of the immovable property or usufruct of the movable property by the seller is provided for, or the option to repurchase the property by the seller is provided for. The act, contract or document in question should mention whether it is carried out within the scope of a financial activity reserved to qualified entities, as well as the result of the consultation with the BoP.
- Duty of negative certification, in acts of assumption or confession of debt or loan agreements, whereby these entities must obtain a statement from the lender ensuring that it is not carrying out an activity reserved for entities authorised by the BoP and have it included in the document in question.
- Duty to abstain from performing any operation or set of operations, present or future, which they know or suspect may be associated with the attempt or performance of unauthorised financial activity.
- Duty to report electronically to BoP, from 1st of March 2022 onwards, information on public deeds, certified private documents or documents with a certified signature in which they intervene and which fall under the types referred to above, except those in which they act on behalf of entities authorised by the financial supervisors.
- Duties of financial service providers duly authorised and registered for that purpose with the respective financial supervisory authorities:
- Duty of disclosure in the marketing of financial products and services: In the disclosure, transmission or dissemination of advertising relating to the marketing of any products, goods or provision of financial services in media or electronic sites organised or promoted in any way by an advertising professional or agency, advertisers and credit intermediaries, when contracting, must: i) demonstrate their registration with the respective supervisory authority as a qualified entity; ii) submit a declaration with a summary description of compliance with the principles of lawfulness conferred on them in relation to advertising and consumer information.
- Duties of the financial supervision authorities:
- Duty to disclose final convictions in criminal or administrative proceedings related to the attempt or performance of unauthorised financial activity;
- Duty to make available a channel for purposes of reporting facts relating to knowledge of the attempt to engage in unauthorised financial activity.
- Duty of including the special mention in civil loan agreements over 2500 (euros) of the date and the banking instrument used, as well as the information necessary for its documentary or computer traceability. The delivery of the money loaned must be carried out by means of a bank instrument, namely a cheque or bank transfer, and must be indicated in the document signed by the borrower, or in a public deed or in a certified private document, depending on the legal form of the applicable contract.
Financial supervisory authorities are also granted the right to block websites and remove illicit content, namely, they can order the blocking of access to websites (takedown), the blocking of the internet protocol (IP) or the domain name system (DNS) or even request the removal of specific illicit content, when it constitutes an attempt of promotion or marketing of products and goods or the provision of financial services by unauthorised entities.
Finally, this law provides for an administrative offence framework for the infringement of the obligations described above. The General Directorate of the Consumer is responsible for the investigation and administrative offence proceedings as well as enforcement of the respective fines.
Law no. 78/2021 comes into force on the 1st of January of 2022.
To access to the entire wording Law no. 78/2021 please click here.
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