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Review The Sanctions Regime In The Financial Sector Regarding Administrative And Criminal

Original Language Title: Revê o regime sancionatório no sector financeiro em matéria criminal e contra-ordenacional

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Parliamentary Group

Draft Law No 612X/4ª

Supervision of Credit Institutions

[Tenth fifth amendment to the General Regime of Credit Institutions and Societies

Financial , approved by the Decree-Law No. 298/92, of December 31; Twenty-fourth

change to the Code of Commercial Societies , approved by the Decree-Law No. 262/86, of 2

of September; Second amendment to the Law governing the implementation of measures for protection of

witnesses in criminal proceedings , approved by Law No. 93/99 of July 14]


Considers the Parliamentary Group of the CFP that the events occurred in the last

decade in the national banking system-in particular in the most well-known cases of the

Portuguese Commercial Bank and BPN Bank-show a clear inefficiency of the

bank supervision that will not have used in a timely and prudential manner all

the mechanisms that the General Regime of Credit Institutions and Societies

Financial places at your disposal, specifically the constants of your article 116º.

This even pointed out in the findings that the CFP presented in the still recent

"Parliamentary Committee of Inquiry into the BCP case", fully invitaated by the

a parliamentary majority of the PS but who are listed in the vote then delivered.

Incidentally, and following this Commission of Inquiry and the proposals of the CFP,

we present already a legislative initiative biased to strengthen the sanctionatory framework

penal offence applicable to economic and financial crime, increasing prison sentences and

preventing them from continuing to be turned into fines.

Despite the fact that we insisted that supervision had and has means, even in the current framework

legal, which would have allowed you to do "what was to be done", i.e. use others

means in their prudential supervision and act in a timely manner to prevent a

repeated occurrence of illegalities, frauds and crimes, preventing societies,


shareholders and the public purse had been hit hard with damage from

hundreds or billions of euros, the CFP admits and faces as a positive the

improvement and the strengthening of the current legislation. Therefore, we have registered the suggestions made by the

Governor of the Bank of Portugal at the hearing held at the Budget Committee and

Finance, on the November 11, 2008, the purpose of the BPN case, and we decided

submit a set of proposals that give response to the concerns expressed,

some of which were also already in advance by various actors, during the

"Parliamentary Committee of Inquiry to the BCP case". We also understand that such

changes have full hangings in the context of the current budget debate for

be able to enter into force at the beginning of 2009.

Thus, the CFP proposes an amendment to the Criminal Code so that there is protection of

witnesses who declare in the framework of economic and financial crimes, proposes to

placement of permanent supervisory teams in the major banks with

activity in Portugal and teams with the same nature in all the remaining

credit institutions whenever the Bank of Portugal considers it necessary, it proposes

that the granting of credit to subsidiaries and establishments " off-shores " be the subject of

prior authorization of the supervision, proposes that the actions presented as a guarantee

or management mandate shall always be accounted for as own shares to

the limits imposed by Article 317 (2) of the Code of Commercial Societies,

passing to hold the administration bodies responsible for the monitoring and

compliance with this normative and, finally proposes mandatory disclosure, in

attachment to management reports, business with companies with which they have relationship

of domain or group and the disclosure of the holders of qualified shareholdings.

In these terms, under the applicable constitutional and regimental provisions, the

Deputies below signed from the CFP Parliamentary Group, present the following

Draft Law:

Article 1.

Amendment to the General Regime of Credit Institutions and Financial Societies


The Article 116 para. from the General Regime of Credit Institutions and Financial Societies (Approved

by the Decree-Law No. 298/92 of December 31, with the amendments introduced by the

Decrees-Law No 246/95 of September 14, para. 232/96, of December 5, para. 222/99, 22

of July, paragraph 250/2000, of October 13, para. 285/2001, of November 3, para. 201/2002, of

September 26, paragraph 319/2002, of December 28, para. 252/2003, October 17, para.

145/2006 of July 31, paragraph 104/2007, April 3, para. 357-A/2007, October 31, para.

1/2008, of January 3, paragraph 126/2008 of July 21, and 211-A/2008, of November 3),

is replaced by the following:

" Chapter III


Section I

Supervision in general

Article 116.

Supervisory procedures



3-Without prejudice to the provisions of Article 93 (1), the Bank of Portugal puts teams

permanent in the institutions with credit volume of more than twenty billion EUR

with registered office or activity in Portugal which, in permanent dialogue with the managing bodies

of these institutions, as well as with the audits to which they are subject, will analyze,

notably, all major financial operations, including those related to

shareholders ' companies and those carried out with the outside.

4-In credit institutions not included in the preceding paragraph, and whenever that is

deemed necessary, may , at all time, be also placed in permanence

supervising teams. "

Article 2.

Addition to the General Regime of Credit Institutions and Financial Societies


The Article 134 is added. to the General Regime of Credit Institutions and Societies

Financial (Approved by Decree-Law No. 298/92 of December 31, with the amendments

introduced by Decrees-Law No 246/95 of September 14, para. 232/96, of December 5,

n ° 222/99 of July 22, paragraph 250/2000 of October 13, para. 285/2001, November 3,

n ° 201/2002 of September 26, para. 319/2002, December 28, para. 252/2003, 17 para.

October, paragraph 145/2006, of July 31, para. 104/2007, April 3, para. 357-A/2007 of 31 of

October, paragraph 1/2008, January 3, para. 126/2008, July 21, and para. 211-A/2008, 3 of

November), with the following wording:

" Chapter III


Section II

Supervision on consolidated basis

Article 134 (new)

Subsidiaries and establishments in "off-shore"

The granting of credit from credit institutions with registered office or activity in Portugal to subsidiaries and

establishments in "off-shore" is subject to prior authorization from the Bank of Portugal. "

Article 3.

Amendments to the Code of Commercial Societies

Articles 316, 323, 325 and 448. of the Code of Commercial Corporations (Approved by Decree Law No. 262/86 of September 2, with the amendments introduced by the Decrees-Law No. 184/87 of April 21, para. 280/87, July 8, para. 418/89, para. 418/89, para. 418/89 of 30 November, 142-A/91, April 10, paragraph 238/91, July 2, paragraph 225/92, October 21, para. 20/93, January 26, October 3, para. 328/95, December 9, para. 257/96, December 31, para. 343/98, November 6, para. 343/98 486/99, of November 13, para. 36/2000, March 14, paragraph 237/2001, August 30, para. 162/2002, July 11, para. 107/2003, of June 4, paragraph 88/2004, of April 20, para. 19/2005, January 18, paragraph 35/2005, February 17, para. 111/2005, July 8, para. 52/2006, March 15 and paragraph 76-A/2006 of March 29), shall be replaced by the following:

" Chapter III


Section III


Own shares

Article 316.

General principle


2-Subscription, acquisition and detention of own shares to be subscribed, acquisition or

detention of actions of the society by third party in its name but on account of the society.

3-A the title of the shares subscribed or acquired with violation of the provisions of the figures

previous ones belong to the society, but the obligation to release them falls back on the people who

have subscribed or acquired or, in the case of increased capital subscribed by the own

society, on the members of the governing body.



6- Revoked.


Article 323.

Time for holding the shares


2-Without prejudice to the provisions of the following number, the actions unlawfully subscribed to and acquired

by or on account of the company shall be disposed of within the year following the acquisition,

when the law does not enact the nullity of this one.

3-The time limit provided for in the preceding paragraph is reduced to 6 months in the case of

corporate issuers of shares admitted to trading on regulated market.

4-Not having been timely made the divestments provided for in the preceding paragraphs,

shall proceed to the cancellation of the actions that housed from being disposed of; in respect of

actions the acquisition of which has been lawful, the cancellation must fall on the most recently


5-[Previous n. 4].


Article 325.

Warranty on own shares


1-The acquisition and detention of own shares shall be equated with, for the purpose of the limit set

in Article 317 (2), the allocation of own shares in warranty, excepted those which

if they are intended to cautioning responsibilities for the exercise of social positions.


3-The administrators who accept for the company own shares of this in pawn or in

any other form of warranty, whether you are want is not exceeded the established limit

in Article 317 (2), they are responsible, as per the provisions of Article 323 (5), if the

actions to be acquired by the society.

4-For the purposes of paragraph 1, there shall be deemed to be the allocation of own shares in warranty

when the society can appropriate the same shares, or the product derived from its

provision, to the satisfaction of a credit holding on the respective holder or any



Chapter VII

Advertising of participations and abuse of information

Article 448.

Advertising of shareholdings of shareholders





5-(new) Without prejudice to other applicable provisions, issuers of shares

provided for in points (a), (b) and (c) of Article 244 (1) of the Code of Securities

publish in annex to the annual report of the governing body, the description and value of the

business between society or others that with it are in relation to domain or group

and holders of qualified shareholdings, computed pursuant to Art. 20 para.


6-Consta also of the report referred to in the preceding paragraph, the description of the societies in

that any member of the governing bodies participates in the respective managers ' bodies

or to those societies is linked, directly or indirectly, through family members. "


Article 4.

Addition to the Act that Regulates the implementation of measures for witness protection in

criminal proceedings

The Article 16 is added. to the Act regulating the implementation of measures for the protection of witnesses in criminal proceedings (passed by Law No. 93/99 of July 14, amended by Law No. 29/2008 of July 4), with the following wording:

" Article 16 To (New)

Protection of witness in economic and financial crime

Whenever it deals with economic and financial crime, the non-revelation of identity

witness may take place during some or at all stages of the process, and also after

the process and trial when the testimony or the statements disregarding crimes

of qualified burla, danish administration, abuse of information, market manipulation or

other fraudulent practices as long as it causes injury to be heard or in unity

economic in the public, private or cooperative sector. "

Assembly of the Republic, December 3, 2008

The Deputies,