MOURGELAS GREEK LAW UPDATE

MOURGELAS GREEK LAW UPDATE April 2012 Recently Issued Acts Company Law Modernization of legislation on general, limited and silent partnership companies & joint ventures A full set of provisions aiming to both modernize the provisions of law for partnerships. i.e. General Partnerships ( Omorrythmi Etaireia ), Limited Partnerships ( Eterrorythmi Etaireia ) and Silent/Undisclosed Partnerships ( Afanis Etaireia ), and to create an effective legislative framework for such small and medium sized companies, which form the basis of the Greek economy, is included in Law 4072/2012 which was published on April 11, 2012 (Government Gazette Issue A, Vol. 86). The key provisions comprise changes with regard to the trade name of general or limited partnerships, the acquisition of legal personality following their registration with the General Commercial Registry, the regulation of the partners participation, the dissolution of such partnerships, as well as the conversion of a limited liability company to a general or limited partnership. Worth mentioning are also the stipulations concerning the joint ventures, which are introduced so as to fill in certain gaps of Greek legislation and case law on these companies Introduction of the legal form of a Private Company Law 4072/2012 also introduces in Greek law the legal form of an Idiotiki Kefalaiouchiki Etaireia (a Private Company ), following the proposal by the European Commission of the European Private Company (Societas Privata Europaea, SPE). The aim of the proposal is to remove the current need for limited liability companies to reincorporate themselves in the corresponding legal form in all the EU member countries in which they want to trade, which currently represents a substantial administrative burden for small and medium enterprises. The novelties of an idiotiki kefalaiouchiki etaireia include the faculty of having a minimum capital of just one Euro intertwined with the dissociation of the company participation and shares from the capital as well as with the limited liability of its members for company debts (which covers only the so-called capital d engagement ). Limitation of the obligation to publish SAs and a LLCs Balance Sheets and Announcements By virtue of Law 4072/2012, companies with the legal form of Société Anonyme and Limited Liability Company are no longer obliged to publish their Balance Sheets and Announcements - apart from the Government Gazette and the General Commercial Registry - on local newspapers. From now on, such an obligation is substituted by the faculty to publish such information on the company s website and inform the Registry accordingly. If a SA and a LLC don t have a website, the aforementioned obligation to publish is only maintained in one daily financial newspaper. This new provision satisfies a standing request of Greek business world to cut down on the yearly cost of the so far existing publication s obligation, estimated to approx. 3.000 Euros. It also aims at cutting down administrative costs and promoting more efficient information of any persons concerned. Corporate transformations and related fiscal issues Law 4072/2012 extends for an indefinite period of time the validity of the stipulations of Legislative Decree 1297/1972 on corporate transformations. It has been noticed that local companies focusing on real estate are more frequently preferring to use this decree over Law 2166/1993, when it comes to a merger process and/or their corporate transformation. Other stipulations of this article deal with several fiscal issues pertaining to the transformation of a Société Anonyme into a general or limited partnership. 1

Investments Improvement of the business environment Law 4072/2012 also includes a series of stipulations aiming at attracting investments and improving Greece s business environment. Among others, following amendments are introduced: Simplification of the licensing procedure for all business activities (Tourism, Processing, Minerals, RES etc.); improvement of the regime of strategic investments ( fast track ) by making it more effective and by expanding its scope, for example through the decrease of the quantitative criteria for submission in strategic investments, the new definition of the meaning of a strategic investment and the abbreviation of the term for issuance of licenses; simplification and acceleration of the procedure for the implementation of archaeological research within the frame of Investment Programs; facilitation and acceleration of import and export procedures; regulation of open issues regarding business plans submitted subject to former investment laws; amendment of stipulations regarding the National Strategic Reference Framework, such as the offering of the possibility to contractors to receive advance payments in the new tenders for co-financed projects. Restructuring Amendment of articles 99 ff. of the Greek Bankruptcy Code Law 4072/2012 includes provisions amending some aspects of the restructuring procedure (former conciliation procedure ) of the Greek Bankruptcy Code. Among others, the time period available for the conclusion of an agreement between the debtor and his creditors is reduced to 2 instead of 4 months, while the possibility of an 1 month s extension is still given. Moreover, a series of provisions provide for the protection of the personnel of the debtor: salary claims shall not be affected by eventual restrictive measures ordered by Court in the course of the procedure, while the Court may also order the safeguarding of all jobs in the debtor s company until the conclusion of the procedure. Finally, amendments are introduced with regard to the suspension of criminal prosecution of the debtor during the procedure. Trademarks New legal framework on trademarks Law 4072/2012 introduces significant amendments aiming at the simplification and acceleration of procedures regarding filing and registration of trademarks in Greece, such as: electronic (on-line) filing of applications for registration of trademarks; reduction of required term for the approval of filed applications though auditing of their compliance with legal requirements by one auditor instead of the Trademarks Administrative Committee, which from now on shall only be competent for the hearing of appeals or/and oppositions towards registered trademarks; rejection of trademarks applications similar to prior registered trademarks of wide reputation even in cases when these are registered for designation of different services or products and; possibility of separation of already filed applications and registration of them only for products or services not protected by other similar or same trademarks for which no opposition has been filed. Electronic communications New legal framework on the provision of electronic communications services Law 4070/2012 which was published on April 10, 2012 (Government Gazette Issue A, Vol. 82) introduces a comprehensive regulatory framework for electronic communications networks and services in compliance with the respective European Directives (2002/19/EC, 2002/20/EC, 2002/21/EC, 2002/22/EC and 2002/77/EC as they have been modified by Directives 2009/136/EC and 2009/140/EC). The said law provides for a full set of rules regulating a wide range of aspects in relation to the operation of the Greek market of electronic communications, aiming, among others, at ensuring the provision of electronic communications services and networks within an environment of an open and competitive market, the protection of end-users rights and the harmonised application of a common regulatory framework throughout the Community. 2

Data Protection Amendment of the legal framework on the processing of personal data in the electronic communications sector Law 4070/2012 also introduces a series of amendments to Law 3471/2006 on the protection of personal data and privacy in the electronic communications sector for the purpose of compliance with Directive 2009/136/EC which partly amends Directive 2002/58/EC, on which Law 3471/2006 was based. Among others, a set of detailed rules is introduced with regard to the measures needed to be taken by the providers of publicly available electronic communications services in order to ensure the security of processing of personal data. Moreover, amendments specifically regarding unsolicited communications provide, among others, for the extension of compensation rights of persons affected by infringements, now being able to address claims not only against violators, but also against negligent providers of electronic communications services, and for the clarification that SMS and MMS fall under the scope of electronic mail, by means of which unsolicited communications may take place. Tourism Simplification and enhancement of tourist investments Law 4070/2012 includes several stipulations on the simplification and enhancement of tourist investments. Among others, the said law simplifies the licensing procedures for hotel facilities, provides for the establishment of a special agency competent for the promotion of Greek tourism under the name Marketing Greece, clarifies matters on the structure and operation of tourist ports and introduces the institutional framework for the organization and operation of fishing tourism activities. Debt recovery Regulation of the activities of collection companies Article 36 of Law 4038/2012 which was published on Αpril 2, 2012 (Government Gazette Issue A, Vol. 14) introduces limitations and provides for control mechanisms that reinforce the protection of privacy and the respect of personality of citizens with regard to communication practices used by collection companies as well as by creditors themselves (e.g. credit institutions). Among others, stipulations are included with regard to the period after which communication with the debtors on outstanding amounts is allowed, the time during which such communication is allowed, the obligation for maintaining an electronic archive of communications, the recording of communications etc. Renewable Energy Implementation of the European Renewable Energy Directive by virtue of the multi-bill of the Ministry of Environment, Energy and Climate Change Law 4062/2012 of the Ministry of Environment, Energy and Climate Change was published on March 30, 2012 (Government Gazette Issue A, Vol. 70) including, among others, provisions on: a) the implementation of the European Renewable Energy Directive (2009/28/EC), by introducing several cooperation schemes between Member States in the field of renewable energy; b) the introduction of Project Helios, the target of which is to produce in Greece solar energy generated electricity and export it to other EU Member States, thus serving as a practical example of the cooperation schemes established under the scope of the European Renewable Energy Directive; and c) the implementation of Directive 2009/30/EC on the establishment of sustainability criteria for biofuels. In addition to the above, Law 4062/2012 introduces a series of amendments to the main Greek legislative instrument for RES, i.e. Law 3468/2006, aiming to confront several problems in the licensing procedure of RES and also providing for the issuance of a ministerial decision which may promote PV projects using equipment produced at least per 70% in EU territory, by offering an increased feed-in-tariff per up to 10%. 3

Constructions New Building Code The new Greek Building Code was published by virtue of Law 4067/2012 on April 4, 2012 (Government Gazette Issue A, Vol. 79), aiming at drastically reforming and at the same time fully modernizing the existing building regulations. The new Building Code simplifies building terms and licensing procedures, while at the same time modern environmental protection aspects and energy efficiency requirements are taken into account, e.g. by introducing the concept of the environmental footprint of buildings and by promoting bioclimatic building planning. Drafts Introduced for Public Consultation Energy The Greek Energy Roadmap to 2050 The Greek Ministry of Environment, Energy and Climate Change introduced on April 4, 2012 the Greek Energy Roadmap to 2050 for public consultation. This energy plan refers to the basic guidelines of the national energy strategy towards 2050, without adopting a strictly defined scenario for the evolution of the energy system. Main targets of the energy policy are: the change of the Greek energy mix through a gradual reduction of the use of hydrocarbons, the promotion of investments in infrastructure in the field of RES and the exploitation of Greece s natural resources. The scenario for 2050 provides for 60-70% reduction of greenhouse gas emissions, 85-100% share of renewable energy in electricity production, 60-70% share of renewable energy in gross final consumption of energy, 31-34% share of biofuels in transports and drastic improvement of buildings energy efficiency. Tax Reform Introduction of the electronic invoice On April 10, 2012, the public consultation introduced by the Greek Ministry of Public Administrative Reform and e-government on the format of the electronic invoice was completed. The electronic invoice shall constitute a big step forward for Greece s technological reform, aiming at producing considerable benefits both for the simplification of the daily operations of enterprises as well as with regard to the enhancement of tax transparency. 4

Business Opportunities Progress on privatizations DEPA (Public Gas Corporation SA) The respective Tender has been issued, the deadline for the submission of Expression of Interests has closed and the Hellenic Republic Asset Development Fund (HRADF) has already announced the prequalified parties for the next step. Hellinikon (Former Hellinikon airport area) The respective Tender has been issued and the first phase for the share sale process of Hellinikon has been completed through a strong investor interest. ODIE (Hellenic Horserace Betting Organization)/ OPAP (Hellenic Football Prognostics Organisation)/ EAS (Hellenic Defence Systems)/ HELPE (Hellenic Petroleum)/ LARCO (General Mining & Metallurgical Company)/ ELTA (Hellenic Post)/ Mont Parnes Casino/ Egnatia Odos Motorway/ EYATH (Thessaloniki Water Supply & Sewerage Company)/ EYDAP (Athens Water Supply and Sewerage Company)/ PPC (Public Power Corporation SA) The Greek State has appointed the financial and legal advisors to assist in the process of privatization. Small Ports and Marinas The objective of the Greek State has been stated to be the establishment of an extensive network of groups/ clusters of ports and marinas which will be subsequently monetized, primarily on the basis of concession agreements, through a series of transactions. Financial, legal and technical advisors have already been appointed to assist with this objective. Regional Airports All regional airports are state-owned without any corporate structure and supervised by the Hellenic Civil Aviation Authority (HCAA). Pursuant to the statements by HRADF, the government favors their operational independence through their grouping in clusters which will then be subsequently privatized on a concession basis or otherwise monetized through one or a series of transactions. Following such privatization, HCAA will retain its role as regulator of aeronautical services and provider of air-traffic control services. South Kavala Offshore Natural Gas Storage Conversion of the offshore natural gas field into an underground natural gas storage facility: Pursuant to the statements by HRADF, the objective of the Greek State is to review alternative ways of exploitation of its rights over the nearly depleted offshore natural gas field in South Kavala via its usage, development and commercial exploitation as a natural gas storage facility. Financial and legal advisors have already been appointed to assist with this objective. 12 Regional Ports, including the ports of Piraeus (OLP) and Thessaloniki (OLTh) The Greek State is currently in the process of evaluating the most appropriate method for exploiting this portfolio of ports through the establishment of groups of ports, which will subsequently be privatized in a series of transactions. Financial and legal advisors have already been appointed to assist with such privatization. 5