Annex B. Legislation screening by sector

Framework legislation of the self-regulated professions

No

No and title of Regulation

Article

Thematic Category

Brief description of the potential obstacle

Policy objective

Harm to competition

Recommendation

1

Law 2/2013 "Creation, organisation and functioning of Public Professional Associations"

Art. 2; Art. 5(1)(c)(d) (e) (h)(m); Art. 7(3)(c); Art. 8(1)

Self-regulatory regime

These provisions describe the attributions and competences given to public professional associations, allowing these to have control over access and exercise of self-regulated professions, including on i) the elaboration and implementation of technical rules, ii) definition of ethical principles, iii) criteria for internships, iv) definition of academic qualifications, v) recognition of professional qualifications obtained outside the national territory, vi) attribution of the exclusive right to grant professional titles, vii) determination of reserved activities and viii) exercise of disciplinary powers.

The recital of this Framework Law determines four fundamental ideas: (i) to establish the substantive and procedural requirements for the creation of new professional associations under public law; (ii) to ensure the essential requirements of its internal democratic organisation in accordance with the principles of representative democracy; (iii) to ensure the exercise of the professional supervision function, including the disciplinary function, by one body with conditions of independence within the associations; (iv) to take account of the interests of users of professional services. Professionals have the obligation of being registered within the professional association to practice the profession, which qualifies the nature of the regulation as being mandatory and unitary. In the Portuguese Constitution the autonomy and administrative decentralisation to the professional associations is recognised to ensure the defence of the public interest and the fundamental rights of the citizens, and also to guarantee the self-regulation of the professions that require technical independence. This regulatory model is based on the public interest of these professions, through the designation of state powers to those entities.

The harm to competition arising from the regulatory model established by Law 2/2013 stems from the centralisation in a single entity of the powers to regulate and represent the profession. Because each professional association, apart from representing the profession, controls access to it and its exercise, the regulations issued may create disproportional and anti-competitive restrictions. The freedom to choose and exercise a profession is a fundamental right of the citizen. Also, the freedom of movement of workers and their free establishment to provide services are fundamental principles of the EU internal market. Restrictions to these principles, in the pursuit of the public interest, must be well justified and proportional. When a professional association acquires full responsibility for regulating access to the profession and its exercise as well as the conduct of its members, this may have an anti-competitive impact. In fact, professional associations may adopt rules that reduce incentives or opportunities for stronger competition between operators, such as restrictions on i) the elaboration and implementation of technical rules, ii) definition of ethical principles, iii) criteria for internships, iv) definition of academic qualifications, v) recognition of professional qualifications obtained outside the national territory (even if bounded by the criteria set by Directive 2005/36/EC amended by Directive 2013/55/EC, transposed by Law 9/2009 and Law 26/2017), vi) attribution of the exclusive right to grant professional titles, vii) determination of reserved activities and viii) exercise of disciplinary powers. As the governing bodies of public professional associations are exclusively composed of their members, there is a risk that their members' interests will not coincide with the public interest. This is one significant reason for including within at least some governing bodies of a professional association, lay people representing the interests of relevant social groups, such as consumer associations, other professionals, and high-profile people with experience in regulatory issues.

We recommend that the regulatory function should be separated from the representative function for self-regulated professional associations, either through the creation of an over-arching supervisory body by sector or trade, or through the creation of a supervisory body inside the current professional orders with the necessary "Chinese walls". The supervisory body takes on the main regulation of the profession such as access to the profession and similar functions. The board of the regulatory body will include not only representative of the profession but also lay people, including high-profile experienced individuals from other regulators, representatives of consumer organisations and academia.

2

Law 2/2013 "Creation, organisation and functioning of Public Professional Associations"

Art. 3(2)(b)

Self-regulatory regime / Creation of new professional associations

The procedure for approval of a Law by the Parliament, that creates a new professional associations, includes the audition of the representative associations of the profession.

Law 2/2013 establishes the principle of exceptionality for the creation of public professional associations and sets a regime of application and proof of the exceptional public interest that is required to justify the new professional associations. The reserved jurisdiction of parliament is relevant as a legal mechanism to define limits of self-regulation on rules of access and exercise of the profession, that establishes the matters that should be regulated in the professional associations' bylaws, also approved by parliament. This legislative option created a certain level of guarantee that any further meaningful change in the regulatory framework has to be democratically decided by parliament, and not simply freely regulated by the bodies of the professional associations. This legal regime reinforces the nature of public interest of the professional associations and the need of strong cases to new professional associations in a self-regulation structure be approved.

This provision introduced relevant principles for the creation of new professional associations. It creates a greater guarantee of transparency and reasonableness, considering that professional associations with the powers instituted by this Framework Law must be exceptionally created when strong evidence of public interest is verified. The European Union has recently recommended a "proportionality test" before the adoption of new regulation of professions (see Proposal for a Directive, COM(2016) 822 final). According to this proposal, the final outcome of a less restrictive market would be the creation of new jobs, the promotion of productivity and ensuring an attractive climate for investment and innovation. Note that Portugal has 240 regulated professions (the European average is 180), and 18 public professional associations with self-regulatory powers. Since the approval of Law 2/2013, one new professional association was created, the recent case of physiotherapists. The mechanism of audition (requirement b) seems unbalanced as only guarantees the participation of the associations representing the professions. Any other stakeholders, wishing so, must issue their opinion within the public consultation. We consider that before issuing its decision, parliament should necessarily obtain the opinion of other stakeholders as: i) the regulators of the professions under analysis; ii) the Portuguese Competition Authority ; and iii) consumer representatives. Doing so, the parliament would be able to consider the regulatory and competition impact on the creation of such a new professional association, including taking into consideration the interests of final consumers. The audition/request for opinion should allow for a suitable time frame for all relevant stakeholders to submit their comments.

We recommend to enlarge the mechanism of audition (requirement b), so that before issuing its decision, the parliament should request other stakeholders as: i) the regulators of the professions under analysis; ii) the Portuguese Competition Authority and iii) consumer representatives, for their opinion on the creation of such a new professional association. The audition/request for opinion should allow for a suitable time frame for all relevant stakeholders to submit their comments.

3

Law 2/2013 "Creation, organisation and functioning of Public Professional Associations"

Art. 24(1)(2)

Mandatory registration in a professional association

This provision establishes that the exercise of a self-regulated profession depends on previous registration in the respective public professional association, unless a different regime is established in the law that creates the professional association. The law can extend the obligation of registration to all professionals and professional firms, other organised associations, employers and subcontractors that provide services in the national territory, and all who practice acts of the profession, except if they have another mandatory regime of public registration.

Registration is a mechanism to organise the professionals with capacity to exercise the activity and also to validate those professionals before consumers. The objective criteria are to regulate access to and the exercise of the profession. Registration may be justified on grounds of legal certainty, so consumers are informed that the professionals are certified to provide those services. The professional association acts as entitled with public powers transferred by the state to this function.

Mandatory registration in a professional association in order to exercise the profession implies an administrative procedure/burden that results in entry costs (e. g. , time frame of the procedure itself, registration fees, and monthly fees, amongst others). Using mandatory registration as a mechanism to access the profession can be restrictive. The possibility of extending the obligation of registration to non-nationals providing services in the national territory and all who practice acts of the profession on a permanent basis can be exempted if they are already registered in a mandatory regime of public registration. Hence, the registration, if needed, is not necessarily harmful in itself, except when it is combined with the establishment of reserved work. For the exercise of some self-regulated professions, reserved work also follows the protection of the title. Protected title with reserved work may exclude other professionals from the exercise of the activity, reducing the number of suppliers in the market and increasing costs to consumers. In general, reserved activities or tasks for specific categories of professionals should be abolished in cases where: (i) the protection is disproportionate to the policy objective because the tasks may already be performed by other well-qualified professionals or are not a danger to public safety; (ii) there is strong and well-regulated protection of the professional title which guarantees the quality of the professionals that are allowed to work; or (iii) the restriction is no longer required owing to legal, societal or professional developments that make the restriction obsolete by objective.

No recommendation.

4

Law 2/2013 "Creation, organisation and functioning of Public Professional Associations"

Art. 27(1)

Multidisciplinary practice in professional firms

This provision allows multidisciplinary professional firms provided that the main corporate objective is the exercise of an activity that falls under the same professional association. This professional firm can engage in a secondary corporate objective, with regard to activities performed by other professionals in the same professional firm, who may even be organised in other professional public associations, provided the applicable incompatibilities and impediments regime are upheld.

This provision aims to guarantee compliance with the ethical principles of each self-regulated profession, as well as, if applicable, the guarding of professional secrecy relating to professional-client privilege, as well as preventing conflicts of interest between different professionals.

Our interpretation of the horizontal framework law is that this provision does not by itself prohibit professional firms from performing multidisciplinary activities, since these firms do not have to have an exclusive social corporate objective and may engage in other activities. However, incompatibilities and impediments regimes may limit the range of professional activities within a same professional firm. Note that there is no unique and exhaustive list of incompatibilities and impediments for each profession, being spread out over several legislative acts. To restrict multidisciplinary activity in a professional firm is to restrict the association of different professionals, belonging to different professional associations (some may not even belong to a public professional association), who would exercise their professional activities within the same firm and in the pursuit of the firm’s corporate or social objective(s). To rule out multidisciplinary activity in the same professional firm, between potentially complementary service providers, harms competition and can be detrimental to consumer welfare. In fact, this restriction does not allow for the full exploration of economies of scope that come with the offer of different services by a same “service delivery unit” that shares infrastructure and human capital . It foregoes specialisation gains and service quality gains resulting from the interaction between a wider range of professionals. This also means foregoing the exploitation of economies of scale and advantages in branding. It also does not allow for the mitigation of the double marginalisation (or double mark-up) problem that come with multidisciplinary activities which can complement each other, by segmenting the services provided. This means foregoing lower average costs in a multi-product firm, therefore leading to higher fees being charged to clients, while preventing clients from further benefits that could be gained from a more convenient "one-stop shop" for a wider range of professional services. Ruling out multidisciplinary activity within a professional can reduce the scope for better risk management between different professional activities within the same professional firm, as they may be subject to non-identical demand volatility or uncertainty - i. e. , reduction in the scope for internal risk spreading to be understood as the ability to transfer resources in response to fluctuations in demand. To offer a wider range of professional services means to be better prepared to face market uncertainties. Furthermore, opening up a professional firm to multidisciplinary activities is likely to ease the introduction of innovative products but also to spur innovation in the delivery of already existing products or range of products.

No recommendation on the legal principle foreseen in this specific provision. However, we recommend that the legislator conducts a technical study to assess the proportionality of incompatibilities and impediments to pursue the exercise of a self-regulated profession that may be preventing the offer of multidisciplinary activities within the same professional firm, taking into consideration the policy objective. In case they are considered not to be proportional, they should be abolished.

5

Law 2/2013 "Creation, organisation and functioning of Public Professional Associations"

Art. 27(3)(a)(4)

Partnership / Ownership of professional firms

Professional firms may include non-professional partners. In this case, professional associations' bylaws may establish restrictions on this inclusion, invoking reasons of public interest. Compliance with the following rules must be observed:- The majority of the share capital with voting rights must belong to professional partners who are members or are registered with the professional association that defines the firm's main corporate objective, established in the national territory, and holding the professional title in question. The majority of the share capital may also be held by companies of such professionals, constituted by national law or other forms of associative organisation of like-minded professionals established in other EU/EEA Member States, whose capital and voting rights lie mainly with the professionals concerned.

This provision opens up such professional firms to partnerships by other people besides professionals. However, such opening is subject to some restrictions and allows each professional association to impose additional restrictions to the way professional firms are organised, including the prohibition of professional firms to include non-professional (or other professional) partners and managers. These restrictions are to be grounded in the public interest, or in the powers of public authority a particular profession may exercise. They may also be grounded in other imperatives such as the professionals' independence and client privilege.

Ownership, shareholding and partnership rules of professional firms require that the majority of the share capital and voting rights must be owned by professional partners, members or registered with the professional association that defines the firm's main corporate objective. Non-professional partners may own the remaining capital and voting rights. Question arises as to why not open up a professional firm totally to external ownership. This would means to open the firm to more investment, by allowing access to a wider pool of capital. This opening would enable professional firms to satisfy a greater pool of consumers and reap the benefits of a larger scale of operations. For younger professionals, not yet well established in their profession, it would also mean more opportunities to set up their own professional firm and compete in the market. This would also generate a greater ability by professional firms to compete in the Single Market and internationally. It would also allow for an improved risk management among the owners of a professional firm, hence, lower operational costs and possibly lower prices charged to consumers for the different professional services being delivered in the market. Ultimately, all these restrictions on ownership, shareholding and partnership over professional firms, are detrimental to firms across all economy, especially SMEs, and to households, as their relaxation can be expected to lead to an increase in their welfare.

We recommend that the ownership and partnership of all professional firms be opened to other professionals and non-professionals, that is, should be open to individuals outside the profession. We also recommend that other professionals and non-professionals be allowed to hold a majority of a professional firm’s social capital, together with a majority of voting rights. Exceptionally, firms of auditors, in line with Art. 3(4)(b) of the Directive on Auditing Services (Directive 2006/43/EC), require that the majority of voting rights still be held by auditors, but open the majority of capital to be held by non-auditors.

6

Law 2/2013 "Creation, organisation and functioning of Public Professional Associations"

Art. 27(3)(b)(4)

Management of professional firms

Professional firms must ensure that at least one manager or administrator must be a member or be registered with the professional association that defines the firm's main corporate objective. In case registration in the professional association is optional, that manager must comply with the requirements on access to the profession in the national territory.

This provision opens up such professional firms to management by other people besides professionals. However, such opening is subject to some restrictions and allows each professional association to impose additional restrictions to the way professional firms are organised, including the prohibition of professional firms to include non-professional (or other professional) managers. These restrictions are to be grounded in the public interest, or in the powers of public authority a particular profession may exercise. They may also be grounded in other imperatives such as the professionals' independence and client privilege.

This provision requires that one of the managers or administrators of a professional firm be a member or be registered with the professional association that defines the firm's main corporate objective. Historically, corporations separated their ownership from management starting in the early 20th century. One of the main reasons was to professionalise management in increasingly competitive markets. Conflicts between owners (the principals) and managers (the agents) have been the subject of extensive literature, and various payment schemes have been adopted to align managers’ interests as closely as possible to the owners’ interests (see e. g. , Carlton and Perloff, 2004). A professional management, which ultimately answers to the owners of the professional firm, may be an option preferable to the professional partners themselves.

We recommend that that the separation between ownership and management should be allowed in all professional firms and that their management include non-professionals, that is, should be open to individuals outside the professions.

7

Law 2/2013 "Creation, organisation and functioning of Public Professional Associations"

Art. 30(1)(2)

Reserved tasks

Reserved professional activities are allowed only when explicitly established by law due to compelling reasons of public interest and meeting proportionality criteria (para. 1). Own acts associated with a profession must only be performed by the professionals legally certified to practice those acts (para. 2).

This legal regime aims to control who is deemed to hold the necessary qualifications to practice as a professional, for the protection of consumers, considering the existence of significant information asymmetries and possible negative externalities to society from the exercise of such activities.

The definition and establishment of reserved activities restricts competition by determining exclusive rights to a certain category of suppliers. The adoption of legal exclusive rights on the practice of economic activities closes the market to potential operators who do not meet certain criteria or standards. The provision of reserved activities bans other qualified professionals from the practice of the acts in question. As a consequence, it prevents entry into the market of other well-qualified professionals who do not hold the professional title. This leads to less innovation, not opening room for innovative technologies or methodologies. It also leads to higher prices as there will be fewer professionals providing these activities. This allows the creation of exclusive (monopoly) rights. Note, that, in general, reserved activities or tasks for specific categories of professionals should be abolished in cases where: (i) the protection is disproportionate to the policy objective because the tasks may already be performed by other well-qualified professionals or are not a danger to public safety; (ii) there is strong and well-regulated protection of the professional title which guarantees the quality of the professionals that are allowed to work; or (iii) the restriction is no longer required owing to legal, societal or professional developments that make the restriction obsolete by objective. However, the provision of the framework law already states the criteria that should be respected when establishing reserved activities, that is, it should be an exceptional regime, adopted by law due to compelling reasons of public interest and meeting proportionality criteria. Hence, this criterion is adequate and the provision in itself is not harmful. Respect of these principles must be analysed on a case-by-case basis of the legislative and regulatory framework of each reserved activity.

No recommendation.

8

Law 2/2013 "Creation, organisation and functioning of Public Professional Associations"

Art. 33(1)

Self-regulatory regime / Quota regime (numerus clausus) Territorial segmentation / Number of suppliers / Prices / Exercise of the profession in a subordinate mode / Advertising

For professions pursuing a mission of public interest or having powers of public authority, the public professional associations can adopt, in their bylaws, requirements for access to and exercise of the profession as an exception to the main rules established in the following provisions of Framework Law: i) Art. 24(7): A quota regime can be imposed on access to a profession, associated or not with territorial restrictions (as a function of distance and population); ii) Art. 26(2): restrictions can allow the caducity or impose a term on the permit for exercise of the profession; iii) Art. 26(3): the establishment of restrictions such as territorial restrictions, number of establishments, minimum number of employees, prices; iii) Art. 28(2): restrictions can be imposed on the exercise of the activity under a system of legal subordination, where the employer can also be required to be a qualified professional or a professional firm; iv) Art. 32(1): restrictions can be imposed on modes of advertising concerning services provided by a profession subject to a public professional association.

These restrictions can only be applied to professions that pursue a mission of public interest or that have powers of public authority.

These restrictions are exceptional. But they may be unduly demanding and restrict competition, as they may exclude well-qualified professionals and non-professionals from the market. Such restrictions may drive up prices, lower innovation and diversity of services, and possibly reducing service quality levels, ultimately reducing social and consumer welfare. However, this legal provision establishes these requirements as exceptions under compelling public interest grounds. Provided that adherence to the principle of proportionality is guaranteed on a case-by-case basis of the legislative and regulatory provisions adopted by the different professional associations, these criteria seem adequate.

No recommendation.

9

Law 2/2013 "Creation, organisation and functioning of Public Professional Associations"

Art. 37(4)

Establishment

Professionals (associates, partners, managers or administrators) established in Portugal that provide self-regulated services for a professional firm or an organisation outside Portugal can only provide services on a regular basis in the national territory if that professional firm or organisation is also established in Portugal, through a professional firm or by the constitution of a permanent representation.

According to stakeholders, this rule ensures a level playing field between nationals and non-nationals. The permanent exercise of the activity must be registered in a public database.

On the one hand, this limits access to an economic activity hence restricting competition in the market, which in turn may reduce consumer and social welfare. In fact, this requirement prevents innovative online businesses from operating in the national territory without physical premises. On the other hand, according to stakeholders, this requirement is in practice simply related to the registration with a tax domicile. Taking this into account we found no harm to competition.

No recommendation.

10

Law 53/2015 "Legal regime for the constitution and functioning of societies of professionals who are subject to professional public associations"

Art. 7(2)

Multidisciplinary practice in professional firms

This provision permits multidisciplinary professional firms provided that the main corporate objective is the exercise of an activity that falls under the same professional association. This professional firm can engage in a secondary corporate objective, with regard to activities performed by other professionals in the same professional firm, who may even be organised in other professional public associations, provided the applicable incompatibilities and impediments regimes are upheld.

This provision aims to guarantee compliance with the ethical principles of each self-regulated profession, as well as, if applicable, the guarding of professional secrecy relating to professional-client privilege, as well as preventing conflicts of interest between different professionals.

Our interpretation of the horizontal framework law is that this provision does not by itself prohibit professional firms from performing multidisciplinary activities, since these firms do not have to have an exclusive social corporate objective and may engage in other activities. However, incompatibilities and impediments regimes may limit the range of professional activities within the same professional firm. Note that there is no unique and exhaustive list of incompatibilities and impediments for each profession, being spread out over several legislative acts. To restrict multidisciplinary activity in a professional firm is to restrict the association of different professionals, belonging to different professional associations (some may not even belong to a public professional association), who would exercise their professional activities within the same firm and in the pursuit of the firm’s corporate or social objective(s). To rule out multidisciplinary activity in the same professional firm, between potentially complementary service providers, harms competition and can be detrimental to consumer welfare. In fact, this restriction does not allow for the full exploration of economies of scope that come with the offer of different services by a same “service delivery unit” that shares infrastructure and human capital . It foregoes specialisation gains and service quality gains resulting from the interaction between a wider range of professionals. This also means foregoing the exploitation of economies of scale and advantages in branding. It also does not allow for the mitigation of the double marginalisation (or double mark-up) problem that come with multidisciplinary activities which can complement each other, by segmenting the services provided. This means foregoing lower average costs in a multi-product firm, therefore leading to higher fees being charged to clients, while preventing clients from further benefits that could be gained from a more convenient "one-stop shop" for a wider range of professional services. Ruling out multidisciplinary activities within a professional can reduce the scope for better risk management between different professional activities within the same professional firm, as they may be subject to non-identical demand volatility or uncertainty - i. e. , reduction in the scope for internal risk spreading to be understood as the ability to transfer resources in response to fluctuations in demand. To offer a wider range of professional services means to be better prepared to face market uncertainties. Furthermore, opening up a professional firm to multidisciplinary activities is likely to ease the introduction of innovative products but also to spur innovation in the delivery of already existing products or range of products.

No recommendation on the legal principle foreseen in this specific provision. However, we recommend that the legislator conducts a technical study to assess the proportionality of incompatibilities and impediments to pursue the exercise of a self-regulated profession that may be preventing the offer of multidisciplinary activities within the same professional firm, taking into consideration the policy objective. In case they are considered not to be proportional, they should be abolished.

11

Law 53/2015 "Legal regime for the constitution and functioning of societies of professionals who are subject to professional public associations"

Art. 8(1)(2)

Partnership / Ownership of professional firms

Professional firms must have at least two professional partners (individuals, firms or other forms of associative organisations of equivalent professionals established in other EU/EEA Member States, whose capital and voting rights lie mainly with the professionals concerned) belonging to the same self-regulated profession (with the exception of those that are incorporated as sole proprietor firms), unless prohibited by the statutes of the firm.

This provision opens up such professional firms to partnerships by other people besides professionals. However, such opening is subject to some restrictions and allows each professional association to impose additional restrictions to the way professional firms are organised, including the prohibition of professional firms to include non-professional (or other professional) partners and managers. These restrictions are to be grounded in the public interest, or in the powers of public authority a particular profession may exercise. They may also be grounded in other imperatives such as the professionals' independence and client privilege.

The traditional firm model with partnerships restricted to professionals from one single area together may contribute to a lack of innovation in the provision of services. It may also contribute to create a wedge between what the profession delivers and what firms and households demand from the suppliers of the services. To open up firms to external ownership can be a vehicle to introduce innovation to the benefit of the firms’ clients . This argument emphasises the importance of bringing in investors with an innovator’s mindset that will introduce and push for “game-changing innovations” better able to respond to the needs of firms and households that rely on those infrastructures to carry out their economic activities. Ultimately, all these restrictions on ownership, shareholding and partnership over professional firms, are detrimental to firms across the entire economy, especially SMEs, and to households, as their relaxation can be expected to lead to an increase in their welfare.

We recommend that the ownership and partnership of all professional firms be opened to other professionals and non-professionals, that is, should be open to individuals outside the profession. We also recommend that other professionals and non-professionals be allowed to hold a majority of a professional firm’s social capital, together with a majority of voting rights. Exceptionally, firms of auditors, in line with Art. 3(4)(b) of the Directive on Auditing Services (Directive 2006/43/EC), require that the majority of voting rights still be held by auditors, but open the majority of capital to be held by non-auditors.

12

Law 53/2015 "Legal regime for the constitution and functioning of societies of professionals who are subject to professional public associations"

Art. 8(4)

Partnership / Ownership of professional firms

Individuals, firms or other forms of associative organisations of equivalent professionals established in other EU or EEA Member States, whose capital and voting rights lie mainly with the professionals concerned, cannot own shares in more than one professional firm with the same principal corporate objective, and provided they are not professional partners in professional firms with the same principal corporate objective in associative organisations from other EU/EEA Member States.

This restriction aims to ensure the independence of professionals and to avoid conflicts of interest. Such a conflict could arise from sharing confidential and sensitive information about clients and about the commercial strategies of professional firms.

This provision restricts the freedom of individuals and firms, and professionals, to participate in the capital of more than one professional firm, which may limit their profits, reduce their incentives to invest and benefit the companies that have clients with greater economic weight. This may ultimately result in higher prices and less social welfare. This also discourages innovation. Only one self-regulated profession analysed in the Project holds such a restriction, imposed both on individuals as well as on firms: a legislative act regulating the bylaws of architects [Art. 16(1) Regulation 322/2016] prohibits individuals (architects), firms of architects, and associative organisations from other EU/EEA countries, to be professional partners in more than one professional firm of architects, registered with the Portuguese association of architects and provided they are not professional partners in associative organisations from other EU/EEA countries. Two other self-regulated professions analysed in the project hold a mitigated version of such a provision: i) the bylaws of enforcement agents [Art. 222(5)] prohibit professional firms of enforcement agents of having other firms as partners; and ii) the bylaws of auditors [Art. 119(1)] forbid individuals (auditors) to be partners of more than one professional firm of auditors at the same time, but allow firms of auditors to be partners of other auditors' firms (Art. 120). The bylaws of the remaining 10 self-regulated professions analysed in the Project (nutritionists; pharmacists; certified accountants; customs brokers; economists; engineers; technical engineers; lawyers; notaries; and solicitors) do not have a provision with such a prohibition, either with regard to individuals or to firms. Hence, the Project equated whether different legislative and regulatory alternatives would be less restrictive, namely: allowing individuals (professionals) as well as professional firms to be professional partners in more than one professional firm, belonging to the same public professional association, provided there are clear "Chinese walls" between the professional function and the investment decisions.

We recommend to abolish the limitation on legal persons (individuals or firms), nationals or from EU/EEA countries, to be limited to be a professional partner in one single professional firm with the same principal corporate objective, provided there are clear "Chinese walls" between the professional function and the investment decisions.

13

Law 53/2015 "Legal regime for the constitution and functioning of societies of professionals who are subject to professional public associations"

Art. 9(2)

Partnership / Ownership of professional firms

Professional firms may include non-professional partners. In this case, professional associations' bylaws may establish restrictions on this inclusion, invoking reasons of public interest. Compliance with the following rules must be observed:- The majority of the share capital with voting rights must belong to professional partners who are members or are registered with the professional association that defines the firm's main corporate objective, established in the national territory, and holding the professional title in question. The majority of the share capital may also be held by companies of such professionals, constituted by national law or other forms of associative organisation of like-minded professionals established in other EU/EEA Member States, whose capital and voting rights lie mainly with the professionals concerned.

This provision opens up such professional firms to partnerships by other people besides professionals. However, such opening is subject to some restrictions and allows each professional association to impose additional restrictions to the way professional firms are organised, including the prohibition of professional firms to include non-professional (or other professional) partners and managers. These restrictions are to be grounded in the public interest, or in the powers of public authority a particular profession may exercise. They may also be grounded in other imperatives such as the professionals' independence and client privilege.

Ownership, shareholding and partnership rules of professional firms require that the majority of the share capital and voting rights must be owned by professional partners, members or registered with the professional association that defines the firm's main corporate objective. Non-professional partners may own the remaining capital and voting rights. Question arises as to why not open up a professional firm totally to external ownership. This would means to open the firm to more investment, by allowing access to a wider pool of capital. This opening would enable professional firms to satisfy a greater pool of consumers and reap the benefits of a larger scale of operations. For younger professionals, not yet well established in their profession, it would also mean more opportunities to set up their own professional firm and compete in the market. This would also generate a greater ability by professional firms to compete in the Single Market and internationally. It would also allow for improved risk management among the owners of a professional firm, hence, lower operational costs and possibly lower prices charged to consumers for the different professional services being delivered in the market. Ultimately, all these restrictions on ownership, shareholding and partnership over professional firms, are detrimental to firms across the entire economy, especially SMEs, and to households, as their relaxation can be expected to lead to an increase in their welfare.

We recommend that the ownership and partnership of all professional firms be opened to other professionals and non-professionals, that is, should be open to individuals outside the profession. We also recommend that other professionals and non-professionals be allowed to hold a majority of a professional firm’s social capital, together with a majority of voting rights. Exceptionally, firms of auditors, in line with Art. 3(4)(b) of the Directive on Auditing Services (Directive 2006/43/EC), require that the majority of voting rights still be held by auditors, but open the majority of capital to be held by non-auditors.

14

Law 53/2015 "Legal regime for the constitution and functioning of societies of professionals who are subject to professional public associations"

Art. 9(3)

Management of professional firms

Professional firms must ensure that at least one manager or administrator must be a member or be registered with the professional association that defines the firm's main corporate objective. In case registration in the professional association is optional, that manager must comply with the requirements on access to the profession in the national territory.

This provision opens up such professional firms to management by other people besides professionals. However, such opening is subject to some restrictions and allows each professional association to impose additional restrictions to the way professional firms are organised, including the prohibition of professional firms to include non-professional (or other professional) managers. These restrictions are to be grounded in the public interest, or in the powers of public authority a particular profession may exercise. They may also be grounded in other imperatives such as the professionals' independence and client privilege.

This provision requires that one of the managers or administrators of a professional firm be a member or be registered with the professional association that defines the firm's main corporate objective. Historically, corporations separated their ownership from management starting in the early 20th century. One of the main reasons was to professionalise management in increasingly competitive markets. Conflicts between owners (the principals) and managers (the agents) has been the subject of extensive literature, and various payment schemes have been adopted to align managers’ interests as closely as possible to the owners’ interests (see e. g. , Carlton and Perloff, 2004). A professional management, which ultimately answers to the owners of the professional firm, may be an option preferable to the professional partners themselves.

We recommend that that the separation between ownership and management should be allowed in all professional firms and that their management include non-professionals, that is, should be open to individuals outside the professions.

Legal professions: Lawyers

No

No and title of Regulation

Article

Thematic Category

Brief description of the potential obstacle

Policy objective

Harm to competition

Recommendations

1

Law 49/2004 "Acts of lawyers and solicitors and crime of unlawful prosecution"

Art. 1(1)

Reserved acts

Only law graduates registered with the Bar Association may practice the reserved acts of a lawyer .

The claim is that it is in the public interest to require that only professionals registered with the Professional Associations can provide such legal services. Some exceptions are listed in paras. 2, 3 & 4: professionals holding a master's or a doctorate in law can provide legal advice with titles recognised in Portugal and registered with the Bar Association; law professors can provide legal advice without being registered with the Bar Association; those who are registered as lawyers in other EU and EEA Member States can also provide legal advice on a temporary or occasional basis and using their home-country title.

This provision may limit the number of professionals who can offer legal services in the market. This may restrict access to legal services to the detriment of businesses and consumers and may lead to higher prices for those services and less diversity and innovation. The scope of reserved legal activities practised by the legal professions in Portugal is quite wide. It may unduly restrict competition from unauthorised legal providers and non-legal providers, potentially with lower cost, in which case the option to reserve activities may not be proportional to ensure consumer protection and to secure access to justice and legal advice. Given that the legal professions are already very restrictive, with tightly controlled entry, there seems little point in carving out the market for certain services. In this case, the scope of the reserved acts must be revised. In general, reserved activities or tasks for specific categories of professionals should be abolished in cases where: (i) the protection is disproportionate to the policy objective because the tasks may already be performed by other well-qualified professionals or are not a danger to public safety; (ii) there is strong and well-regulated protection of the professional title which guarantees the quality of the professionals that are allowed to work; or (iii) the restriction is no longer required owing to legal, societal or professional developments that make the restriction obsolete by its objective. In several cases, opening up reserved activities to additional qualified professions could generate substantial consumer benefits, in the form of innovative and more diverse services at lower prices. For instance, alternative professionals with a lower level of qualifications could better serve consumers with simple needs, who could otherwise overpay when retaining professionals with qualifications suited to more complex needs.

We recommend that the profession of lawyer should review all its reserved activities with a view to opening the exercise of them to the other legal professions under due supervision of the work performed. We also recommend opening the market of legal advice to professionals (i. e. legal experts) and entities for which they work that want to provide legal advice on a regular basis.

2

Law 49/2004 "Acts of lawyers and solicitors and crime of unlawful prosecution"

Art. 1(5)(6)(9)

Reserved acts

Lists the reserved acts of lawyers (and solicitors) such as managing the interests of the defence for which they are entrusted, by practicing, in the name and on behalf of the client, legal acts particular to the profession; legal advice; the drafting of contracts and the practice of preparatory acts tending to the constitution, modification or extinction of legal businesses; the negotiation process for the collection of credits; legal representation when claiming or challenging administrative or fiscal acts.

The claim is that it is in the public interest to require that only professionals registered with the Professional Associations can provide such legal services. Some exceptions are listed in paras. 2, 3 & 4: professionals holding a master's or a doctorate in law can provide legal advice with titles recognised in Portugal and registered with the Bar Association; law professors can provide legal advice without being registered with the Bar Association; those who are registered as lawyers in other EU and EEA Member States can also provide legal advice on a temporary or occasional basis and using their home-country title.

This provision may limit the number of professionals who can offer legal services in the market. This may restrict access to legal services to the detriment of businesses and consumers and may lead to higher prices for those services and less diversity and innovation. The scope of reserved legal activities practised by the legal professions in Portugal is quite wide. It may unduly restrict competition from unauthorised legal providers and non-legal providers, potentially with lower cost, in which case the option to reserve activities may not be proportional to ensure consumer protection and to secure access to justice and legal advice. Given that the legal professions are already very restrictive, with tightly controlled entry, there seems little point in carving out the market for certain services. In this case, the scope of the reserved acts must be revised. In general, reserved activities or tasks for specific categories of professionals should be abolished in cases where: (i) the protection is disproportionate to the policy objective because the tasks may already be performed by other well-qualified professionals or are not a danger to public safety; (ii) there is strong and well-regulated protection of the professional title which guarantees the quality of the professionals that are allowed to work; or (iii) the restriction is no longer required owing to legal, societal or professional developments that make the restriction obsolete by its objective. In several cases, opening up reserved activities to additional qualified professions could generate substantial consumer benefits, in the form of innovative and more diverse services at lower prices. For instance, alternative professionals with a lower level of qualifications could better serve consumers with simple needs, who could otherwise overpay when retaining professionals with qualifications suited to more complex needs.

We recommend that the profession of lawyer should review all its reserved activities with a view to opening the exercise of them to the other legal professions under due supervision of the work performed. We also recommend opening the market of legal advice to professionals (i. e. legal experts) and entities for which they work that want to provide legal advice on a regular basis.

3

Law 49/2004 "Acts of lawyers and solicitors and crime of unlawful prosecution"

Art. 5(1)

Professional title / Academic qualification

The professional title of lawyer ("advogado") is exclusively reserved for law graduates with an active registration in the Bar Association, and to those who comply with the conditions set out in the bylaws.

This legal provision aims to guarantee that only those who comply with the Professional Association rules can use the title of lawyers lawfully . Such cases may include: (i) doctors in law, with effective practice of teaching law in an institution of higher education, (ii) former magistrates with an effective professional practice, in both cases after undergoing preparatory training in professional ethics, with a maximum duration of six months and under the supervision of a registered legal professional chosen by the candidate.

Setting exclusivity requirements for the use of the professional title of Lawyer, with all that implies in terms of reserved acts, limits the number of legal service suppliers which in turn may have a negative impact on prices charged, on innovation, and on the diversity of those services. This provision may limit the number of professionals who can offer legal services in the market. This may restrict access to legal services to the detriment of businesses and consumers and may lead to higher prices for those services and less diversity and innovation. The scope of reserved legal activities practised by the legal professions in Portugal is quite wide. It may unduly restrict competition from unauthorised legal providers and non-legal providers, potentially with lower cost, in which case the option to reserve activities may not be proportional to ensure consumer protection and to secure access to justice and legal advice. Given that the legal professions are already very restrictive, with tightly controlled entry, there seems little point in carving out the market for certain services. In this case, the scope of the reserved acts must be revised. In general, reserved activities or tasks for specific categories of professionals should be abolished in cases where: (i) the protection is disproportionate to the policy objective because the tasks may already be performed by other well-qualified professionals or are not a danger to public safety; (ii) there is strong and well-regulated protection of the professional title which guarantees the quality of the professionals that are allowed to work; or (iii) the restriction is no longer required owing to legal, societal or professional developments that make the restriction obsolete by its objective. In several cases, opening up reserved activities to additional qualified professions could generate substantial consumer benefits, in the form of innovative and more diverse services at lower prices. For instance, alternative professionals with a lower level of qualifications could better serve consumers with simple needs, who could otherwise overpay when retaining professionals with qualifications suited to more complex needs.

We recommend that the profession of lawyer should review all its reserved activities with a view to opening the exercise of them to the other legal professions under due supervision of the work performed. We also recommend opening the market of legal advice to professionals (i. e. legal experts) and entities for which they work that want to provide legal advice on a regular basis.

4

Law 49/2004 "Acts of lawyers and solicitors and crime of unlawful prosecution"

Art. 6(1)

Multidisciplinary practice in professional firms / Reserved acts

With the exception of bureaus and offices composed exclusively of lawyers, solicitors, or lawyers and solicitors (sharing premises), and of solicitor firms and law firms, and of legal consulting offices organised by either the Bar Association or by the Chamber of Solicitors, no other office or firm, constituted in any legal form, can provide to third parties services that include, even if isolated or marginal, the practice of "acts of lawyers and solicitors".

This legal provision aims to guarantee that only lawyers and solicitors lawfully practice reserved acts as identified in Art. 1, as that such reserved acts are practiced under a certain type of organisational forms that not allow the supply of multidisciplinary services.

By restricting certain legal acts to lawyers (and solicitors), this provision limits the number of professionals who can offer legal services in the market to the detriment of businesses and consumers. This restriction may lead to higher prices for those services and less diversity and innovation. This provision also limits the type of firms allowed to provide legal services, and should be read together with Art. 213 of the bylaws. For example, it prohibits multidisciplinary law firms. This prohibition has already been questioned by some stakeholders and by the Portuguese Association of Law Firms (ASAP) – see conclusions from ASAP 8th Annual Meeting in 2015. To restrict multidisciplinary activity in a professional firm is to restrict the association of different professionals, belonging to different professional associations (some may not even belong to a public professional association), who wish to exercise their professional activities within the same firm and in the pursuit of the firm’s corporate or social objective(s). In a professional firm, this restriction takes the form of a restriction on partnership – restricting, or banning altogether, non-professional partners. This restriction is particularly acute in the case of the legal professions. To rule out multidisciplinary activity in the same professional firm, between potentially complementary service providers, harms competition and can be detrimental to consumer welfare. In fact, this restriction does not allow for the full exploration of economies of scope that come with the offer of different services by a same “service delivery unit” that shares infrastructure and human capital. It foregoes gains from specialisation and service quality that would result from the interaction between a wider range of professionals. This also means foregoing the exploitation of economies of scale and the advantages of branding. It also does not allow for the mitigation of the double marginalisation (or double mark-up)problem that comes with multidisciplinary activities which can complement each other, by segmenting the services provided. This means foregoing lower average costs in a multi-product firm, thereby leading to higher fees being charged to clients, while preventing clients from enjoying further benefits that could be gained from a more convenient "one-stop shop" for a wider range of professional services. Ruling out multidisciplinary activities within a profession can reduce the scope for better risk management between different professional activities within the same professional firm, as they may be subject to non-identical demand volatility or uncertainty, i. e. , reduction in the scope for internal risk-spreading to be understood as the ability to transfer resources in response to fluctuations in demand. To offer a wider range of professional services means to be better prepared to face market uncertainties. Furthermore, opening up a professional firm to multidisciplinary activities is likely to ease the introduction of innovative products but also to spur innovation in the delivery of already existing products or ranges of products.

We recommend that the prohibition of multidisciplinary practice in professional firms should be removed, particularly in the case of the legal professions, where the “professional partnership model” is the only model allowed for the practice of the profession in a collective way. The creation of "Alternative Business Structures" can lead to more innovation, a broader range of services and easier access to legal services and legal advice for businesses and consumers.

5

Law 112/2009 "Legal regime applicable to the prevention of domestic violence"

Art. 25(1)

Reserved acts / Legal aid

Under the regime applicable to the prevention of domestic violence, legal advice is urgently provided by the state through a lawyer considering the client's (victim's) economic insufficiency, under the legal aid regime.

This provision aims to guarantee that victims of domestic violence are advised by Lawyers, and that a certain quality of service will be met. Due to the nature of the crime involved, only a Lawyer may represent the victim in the Court. For that reason the state provides consultation by a Lawyer and gives the possibility to the victim to be represented by the same professional (Lawyer) in the court, if needed.

This provision excludes other professionals, such as solicitors, who may be as qualified as lawyers to provide the same services, namely legal advice. These services do not include a judicial mandate. Furthermore, the legal aid regime establishes that legal advice can be given by lawyers and solicitors, in spite of the absence of a protocol signed between the two professional associations and the Ministry of Justice, which could be necessary to include solicitors in the regime of legal aid.

Amend the provision in order to allow victims to choose between Solicitors and Lawyers. However those citizens must be informed about any limitations that solicitors might have to act in the court.

6

Law 145/2015 "Bar Association Bylaws"

Art. 3 (Annex)

Self-regulatory regime

This provision describes the attributions and competences given to the Bar Association, guaranteeing it the power to control access to and the exercise of the profession, the elaboration and implementation of technical rules and ethical principles and the exercise of disciplinary powers.

It is our understanding that this provision aims to ensure the exercise of the regulatory function, including the disciplinary function and the representative function, taking into account the interests of users of the professional services, by one and the same single entity, the professional association. In the Portuguese Constitution the autonomy and administrative decentralisation to the professional associations is recognised to ensure the defence of the public interest and the fundamental rights of citizens, and also to guarantee the self-regulation of the professions that require technical independence. This regulatory model is based on the public interest of these professions, through the designation of state powers to those entities and with two main characteristics: the exclusivity on granting the professional title and the obligation of being registered within the professional association to practice the profession, which qualifies the nature of the regulation as being mandatory and unitary.

The harm to competition arising from the regulatory model, already established by the horizontal framework Law 2/2013 and considered in the bylaws of the professional association, stems from the centralisation in a single entity of the powers to regulate and represent the profession. Because each professional association, apart from representing the profession, controls access to it and its exercise, the regulations issued may create disproportional and anti-competitive restrictions. The freedom to choose and exercise a profession is a fundamental right of the citizen. Also, the freedom of movement of workers and their free establishment to provide services are fundamental principles of the EU internal market. Restrictions to these principles, in the pursuit of the public interest, must be well justified and proportional. When a professional association acquires full responsibility to regulate access to the profession and the conduct of its members, this may have an anti-competitive impact. In fact, professional associations may adopt rules that reduce incentives or H52opportunities for stronger competition between operators, such as restrictions on advertising and partnerships/ownerships, management or multidisciplinary activities, or restrictions when setting the minimum qualifications to enter the profession, amongst others. As the governing bodies of public professional associations are exclusively composed of their members, there is a risk that their members' interests will not coincide with the public interest. This is one significant reason for including within at least some governing bodies of a professional association, lay people representing the interests of relevant social groups, such as consumer associations, other professionals, and high-profile people with experience in regulatory issues.

We recommend that the regulatory function should be separated from the representative function for self-regulated professional associations, either through the creation of an over-arching supervisory body by sector or trade, or through the creation of a supervisory body inside the current professional orders with the necessary "Chinese walls". The supervisory body takes on the main regulation of the profession such as access to the profession and similar functions. The board of the regulatory body will include not only representative of the profession but also lay people, including high-profile experienced individuals from other regulators, representatives of consumer organisations and academia.

7

Law 145/2015 "Bar Association Bylaws"

Art. 66(1) - Annex

Title/Reserved acts

The provision of "advocacy services" as own acts of lawyers (as defined by Law 49/2004) can only be undertaken by lawyers registered with the Bar Association.

The claim is that it is in the public interest that only a lawyer registered with the Bar Association lawyers has the necessary specific academic qualifications and training in the law to provide such acts.

This provision may limit the number of well-qualified professionals who can compete in the market for the provision of such services. In turn, this restriction may have negative impacts on the prices being charged, and possibly their diversity and innovativeness. The scope of reserved legal activities practiced by lawyers (and solicitors) in Portugal is quite wide. It may unduly restrict competition from unauthorised legal providers and non-legal providers, potentially with lower costs, in which case the option to reserve activities may not be proportional to ensure consumer protection and to secure access to justice and legal advice. Given that the legal professions are already very restrictive, with tightly controlled entry, there seems little point in carving out the market for certain services.

We recommend that the profession of lawyer should review all its reserved activities with a view to opening the exercise of them to the other legal professions under due supervision of the work performed. We also recommend opening the market of legal advice to professionals (i. e. legal experts) and entities for which they work that want to provide legal advice on a regular basis.

8

Law 145/2015 "Bar Association Bylaws"

Art. 68 - Annex

Reserved acts

The provision of legal advice constitutes a lawyer's own act as established in Art. 1 of Law 49/2004.

The claim is that it is in the public interest that lawyers can provide legal advice, due to their specific academic qualifications and training in the law.

This provision establishes that the supply of legal advice as an own act of lawyers. Law 49/2004 establishes that solicitors, together with lawyers, may also provide legal advice. This provision may limit the number of well-qualified professionals who can compete in the market for the provision of such services. In turn, this restriction may have negative impacts on the prices being charged, and possibly their diversity and innovativeness. The scope of reserved legal activities practiced by lawyers (and solicitors) in Portugal is quite wide. It may unduly restrict competition from unauthorised legal providers and non-legal providers, potentially with lower costs, in which case the option to reserve activities may not be proportional to ensure consumer protection and to secure access to justice and legal advice. Given that the legal professions are already very restrictive, with tightly controlled entry, there seems little point in carving out the market for certain services.

We recommend that the profession of lawyer should review all its reserved activities with a view to opening the exercise of them to the other legal professions under due supervision of the work performed. We also recommend opening the market of legal advice to professionals (i. e. legal experts) and entities for which they work that want to provide legal advice on a regular basis.

6

Law 145/2015 "Bar Association Bylaws"

Art. 70(1) - Annex

Title / Reserved acts

The title of Lawyer ("advogado") is exclusively reserved for professionals registered with the Bar Association.

Registration constitutes the administrative link between the lawyer and the bar. It grants the lawyer the required professional title that enables and validates his/her practice of legal services. Reserving the practice of such services for lawyers registered with the bar stems from the public good nature of their acts and the lawyer's role in the dispensation of justice.

In terms of competition, the title of lawyer is not problematic in itself. It becomes problematic whenever a set of exclusive legal acts require the professional to hold such a title. To hold the power to regulate access to and exercise of the profession may have a negative impact on competition in the market for legal services. Using mandatory registration as a mechanism to access the profession - protection of title - is restrictive, especially when accompanied by legislation that reserves certain professional acts for holders of the professional title. Professional licensing may remedy inefficiencies resulting from asymmetric information between clients and service providers. However, protection of title together with reserved work and restrictive access to the profession makes it more difficult for businesses and citizens to acquire legal services at affordable prices with innovative and diverse solutions, as it excludes other well-qualified professionals, although not registered with the Bar, from also competing in the market. This is particularly significant in the case of legal advice, more so than in the case of judicial mandate, which may demand specific legal training. Such restrictions will ultimately lead to a loss in social welfare.

We recommend that the profession of lawyer should review all its reserved activities with a view to opening the exercise of them to the other legal professions under due supervision of the work performed. We also recommend opening the market of legal advice to professionals (i. e. legal experts) and entities for which they work that want to provide legal advice on a regular basis.

10

Law 145/2015 "Bar Association Bylaws"

Art. 70(3) - Annex

Title of specialist

A lawyer can only be designated a "specialist" if the Bar Association grants that title. There are currently 14 types of specialties recognised by the Bar Association, such as administrative law, tax law, labour law, finance law, European law, constitutional law and environmental law.

Due to the increasing complexity of the economic and social environment, the law has also witnessed a need to differentiate between professionals by creating professional specialisations. This legal provision (Art. 70), together with Regulation 9/2016 from the Bar Association regulates the process for the attribution of the title of Specialist.

The bar reserves the right to grant the title of specialist to publicly validate the practice of a specialist lawyer, in its attempt to overcome possible market failures due to information asymmetries and externalities in the provision of legal services. When the existence of a professional title of specialist is associated with reserved activities this will lead to a monopoly on the performance of those acts. A non-specialist lawyer can nonetheless practice law in any specialised area, but cannot use the title of specialist. The Bar Association has the power to grant the qualification of "specialist" in certain areas of legal practice (14 different specialty areas) to a lawyer. Such qualification is conditional on more than 10 years of practice in the area of specialisation and uninterrupted membership in the Bar, together with an evaluation of the candidate's CV, reference letters, plus an oral exam. The jury that assesses the submitted candidacy and the oral examiners are all members of the Bar. As the market may attach a premium to the title of specialist, the decisions by the juries can have a significant impact on the number of titled specialists are providing their services on the market. A very strict examination process may unduly limit the number of different specialists operating in the market, with negative impacts on prices/fees, diversity and innovation of legal services, and ultimately lead to a loss in social welfare.

On the composition of the juries assessing a candidate's CV and presiding over his/her oral exam, we recommend to be broadened to include legal professionals other than Bar Association members. These other legal professionals may include academics teaching and conducting research in different law faculties, possibly magistrates and other stakeholders. Even taking into consideration language barriers, legal professionals from other countries could introduce added value in the composition of the juries, by bringing in alternative approaches and greater intellectual diversity.

11

Law 145/2015 "Bar Association Bylaws"

Art. 81 (2) - Annex

Quality standards

The lawyer exercises the defence of the rights and interests that are entrusted to him always with full technical autonomy and in an exempt, independent and responsible manner. The exercise of the profession of lawyer is incompatible with other functions that could harm the rights, independence and dignity of the profession. Moreover, every employment contract a lawyer is party to, should respect those ethical principles.

To preserve a lawyer's full technical autonomy and independence, for the protection of the clients served.

The preservation of the so-called "dignity" of a lawyer, as laid down in para. 2, involves an ill-defined and open-ended term ("dignity"), and may allow for an abusive interpretation by the Bar. The inclusion of such a term in this provision does not even have a clear public objective. Moreover, the enforcement by the Bar of the incompatibility regime may also allow for over-zealousness and abuse given the Bar's disciplinary powers. If the end result is to reduce in a non-negligible way the number of lawyers able to compete in the market for legal services, there will be a negative impact on the number of lawyers able to perform legal acts, and consequently on charged prices/fees, on diversity and innovation of the services being offered on the market.

The term "dignity" should be either well-defined or dropped altogether. In defining this term, Jurisprudence can play an essential role. We call for this provision to be rewritten to eliminate its dubious content. One way to specify what the term "dignity" refers to will be to follow the example of Art. 188, para. 3 of the bylaws, which define what is meant by "moral suitability". We also question why the term "dignity", even if well defined, should be part of this provision.

12

Law 145/2015 "Bar Association Bylaws"

Art. 85(1)(3) - Annex

Registration and licensing

It is forbidden to be a member of both the Bar Association and the Professional Association of Solicitors (and Enforcement agents), except during the first stage of internship (referred in Art. 195 para. 3). However, lawyers registered with the Bar Association can register with the College of Enforcement agents provided they do not practice the judicial mandate.

This legal provision does not set any policy objective justifying such incompatibilities. We may infer that to be a registered lawyer carrying out a judicial mandate and simultaneously registered as a enforcement agent could potentially raise questions regarding professional independence.

This provision restricts the scope of legal acts that a lawyer, a solicitor or a enforcement agent can practice. If such a restriction leads to a reduction in the number of legal service providers competing in the market, this will have a negative impact on prices/fees charged for the different legal services, and on the diversity and innovation of such services. Banning simultaneous registration with the Bar and with the Professional Association of Solicitors (and Enforcement agents) is anti-competitive, as it divides up the market into exclusive areas for the supply of services.

We recommend that the legislator conducts a technical study to assess the proportionality of incompatibilities and impediments to pursue the exercise of a self-regulated profession, taking into consideration the policy objective. In case they are considered not to be proportional, they should be abolished.

13

Law 145/2015 "Bar Association Bylaws"

Art. 88(1)(2) - Annex

Quality standards

A lawyer must display public and professional behaviour appropriate to the dignity and responsibilities of the function, complying punctually and scrupulously with the duties set forth in these bylaws and all those that the law, customs and professional traditions impose on them. Honesty, probity, rectitude, loyalty, courtesy and sincerity are professional obligations.

We assume these requirements attempt to protect clients. Professional ethical rules in general can be understood as a set of behavioural norms that attempt to mitigate moral hazard problems in the delivery of professional services, stemming from information asymmetries between clients and service providers and possible externalities.

We do not question the need for lawyers and other professionals to conduct themselves according to widely accepted ethical principles. However, we question the disciplinary powers a professional association, such as the Bar, may have to punish deviations from such ethical principles, unless they imply civil or criminal responsibility, in which case it should be up to the courts to pass judgement and sanction such types of behaviour. In fact, these requirements are very open-ended and may potentially be misused by the Bar Association when exercising its disciplinary powers, including in what concerns a lawyer's behaviour within his private sphere (see Decision from the Bar on 11 Nov. 1962, in Revista da Ordem dos Advogados 23, 182). Such misuse may end up limiting the number of suppliers competing in the market for such services, even if only temporarily, with negative impacts on prices/fees, diversity and innovation of legal services, with an ultimate loss of social welfare.

We recommend that the regulatory function should be separated from the representative function for self-regulated professional associations, either through the creation of an over-arching supervisory body by sector or trade, or through the creation of a supervisory body inside the current professional orders with the necessary "Chinese walls". The supervisory body takes on the main regulation of the profession such as access to the profession and similar functions. The board of the regulatory body will include not only representative of the profession but also lay people, including high-profile experienced individuals from other regulators, representatives of consumer organisations and academia.

14

Law 145/2015 "Bar Association Bylaws"

Art. 90(2)(h) - Annex

Advertising

Sets the duties of a lawyer before the community. Among these is the duty that lawyers should not solicit clients, either by themselves or by someone else on their behalf.

It is our understanding that this prohibition aims to ensure the principle of free choice of a lawyer by clients, to guarantee they will maintain a relation based on trust. It aims to prevent clients from being pressured or induced to choose a particular lawyer. Moreover, some professionals claim that soliciting clients may lead to an "excess demand for legal services" beyond what may be deemed reasonable (overlitigation), with negative externalities to the legal system.

This provision is anti-competitive. It prevents competition between lawyers in their search for clients, and raises clients' search costs for lawyers. It may particularly hurt young lawyers not yet well known in the market, by restricting their competitiveness. Following OECD (2007), there are no well-founded arguments against permitting advertising that is truthful. These effects will have negative impacts on charged prices/fees, and on the diversity and innovation of services offered in the market.

Any prohibition or restriction for legal professions beyond the prohibition on misleading and unlawful comparative advertising (already covered in other legal texts) should be removed.

15

Law 145/2015 "Bar Association Bylaws"

Art. 94(4)(a)(b) (e) - Annex

Advertising

Lists the types of advertisement by lawyers about their services which are considered by the Bar as illicit. The following types are considered illicit: to publicly advertise persuasive, ideological, self-aggrandizement and comparative contents; to mention the quality level of a lawyer's office/practice; to advertise erroneous or misleading information; to promise or induce a belief over legal outcomes; to engage in unsolicited direct publicity.

It is our understanding that these types of advertising are prohibited to ensure that a legal service is not regarded as any other commercial service devoid of a public good nature, to protect potential clients from erroneous information, especially when that service has the characteristics of a "credence good", and to prevent overlitigation.

It limits the freedom of lawyers to advertise their own activity, which might be especially harmful for lawyers not yet well established in the market. Advertising one's services to gather clients is crucial to promoting competition and to establishing a level playing field among professionals in the market. Moreover, this type of restriction over a lawyer's advertisement may be particularly harmful in cases where innovative and online outlets are used, as legality or illegality may be harder to establish. It is true that, in general, the impact of advertising on retail prices is complex. Nevertheless, for many industries, there is substantial evidence that retail advertising leads to lower retail prices. Moreover, following OECD (2007), there are no well-founded arguments against permitting advertising that is truthful.

Any prohibition or restriction for legal professions beyond the prohibition on misleading and unlawful comparative advertising (already covered in other legal texts) should be removed.

16

Law 145/2015 "Bar Association Bylaws"

Art. 95 - Annex

Quality standards

In the exercise of the profession, a lawyer must proceed with civility, especially when dealing with colleagues, magistrates, arbitrators, experts, witnesses and other interveners in the proceedings, and also with enforcement agents, notary officials, conservatorships and other departments, public or private entities.

It is our understanding that this requirement is meant to ensure a proper administration of the law by lawyers and other legal professionals. However, this does not exclude the use of forceful expressions when this may be helpful for the client in the course of a legal process (see also Art. 110(1) of bylaws and Art. 150(2) of the Civil Code).

This sets a general quality standard that should be internalised by any professional, lawyer or not. As it is, it risks being enforced in an arbitrary way by the Bar endowed with disciplinary powers, which could lead to disciplinary suspension or even disbarment of lawyers, removing them from the market and hampering competition between lawyers.

We recommend that non defined notions assisting the setting of standards of conduct, such as civility, be contained and circumscribed, relying on the existing jurisprudence (from the professional association itself or from the courts themselves) whenever possible. Otherwise, consider removing this provision altogether.

17

Law 145/2015 "Bar Association Bylaws"

Art. 105(1)(3) - Annex

Professional fees

A lawyer's fees must correspond to an adequate economic compensation for the services actually rendered, which must be paid in currency and may take the form of a fixed retribution, i. e. , regardless of the final outcome. In the absence of a prior written agreement, the lawyer shall submit to the client the respective fees account with a breakdown of the services rendered. In defining their fees, the lawyer must take into account the importance of the services provided, the difficulty and the urgency of the subject, the degree of intellectual creativity of his/her performance, the result obtained, the time spent, the responsibilities assumed and other professional uses. Note that this provision does not fix the fees charged by a lawyer.

It is our understanding that this provision is meant to protect both client and lawyer from arbitrariness in the prices/fees charged . The items listed in para. 3 are meant to establish the criteria for defining a price/fee which should correspond to the services effectively provided, as established in para. 1. This para 1. , does not exclude the provision of a legal service (within the framework of a mandate contract) free-of-charge per se (see Art. 1158 of the Civil Code).

Although the identification of objective criteria used to set fees (by Lawyers) may be advantageous when the Professional Associations is required (by clients) to revise or arbitrate on the fees charged, this list should not be exhaustive. This provision may restrict the contractual freedom between lawyer and client, when choosing the payment format for services rendered, as well as the criteria to determine the lawyer's fees. This restriction may reduce the scope for different lawyers to compete for clients, more so if the Bar Association adopts an active posture regarding how its members’ services should be paid for. Hence, it may hamper competition in the market for legal services.

This legal provision should be modified to allow the use of more specific and objective criteria based on professional association previous decisions.

18

Law 145/2015 "Bar Association Bylaws"

Art. 107 - Annex

Professional fees

It is forbidden for lawyers to redistribute fees, albeit as a commission or another form of compensation, except with other lawyers, trainee lawyers and solicitors with whom they collaborate.

It is our understanding that this restriction aims to prevent unsolicited direct recruitment of clients by third parties on behalf of a lawyer in exchange for a payment to the former through a fee-sharing rule. If this type of recruitment were allowed it could jeopardise the lawyer's independence and allow others to coerce him/her.

This provision appears to be strongly anti-competitive. To gather clients it is crucial to promote competition and to establish a level playing field among professionals in the market. This legal provision restricts the type of client-gathering strategies a lawyer can engage in, by limiting the way he or she can share his/her fees with third parties - see art 94(4)(e) of the Bar bylaws. Hence, it hampers competition in the market for legal services. It also reduces the possibility of sharing costs and revenues if a mustidisciplinary legal firm form would be allowed in Portugal.

In view of the recommendation to open law firms to multidisciplinary practice and to more flexible organisational forms, we recommend the removal of this provision that prohibits fee-sharing between lawyers and other professionals, legal or non-legal, in law firms.

19

Law 145/2015 "Bar Association Bylaws"

Art. 111 - Annex

Quality standards - Professional ethics

Professional solidarity imposes a relationship of trust and co-operation between lawyers for the benefit of clients and in order to avoid unnecessary litigation, reconciling as far as possible the interests of the profession with those of Justice or those who seek it.

We can verify in the Opinion of the Bar Association, dated 7 November 2006, that this duty of solidarity aims to have lawyers settle their own disputes, avoiding the migration of such disputes to other entities.

The term "professional solidarity" is dubious and unclear. Professional solidarity if misinterpreted and misapplied could harm competition between lawyers. This harm could stem from e. g. , market sharing, or inappropriate information sharing on fees charged to clients. Harm could also stem from other contractual conditions, or from other types of behaviour that jeopardise the desirable competition between lawyers based on prices charged, on quality of service, and on their diversity and innovativeness.

It is unclear what is meant by "professional solidarity" between lawyers. Since "professional solidarity" may restrict desirable competition between lawyers as providers of legal services to clients, notwithstanding other public interest dimensions of their professional activity. This legal provision should be removed.

20

Law 145/2015 "Bar Association Bylaws"

Art. 112(2) - Annex

Quality standards - Professional ethics

A lawyer who intends to take on a matter previously entrusted to another lawyer should not initiate action without first ensuring that the latter has been paid the fees and other amounts due, and must present to the colleague, orally or in written form, the reasons for the acceptance of the mandate and to report on the efforts made to that end.

This provision seems to fall within the principles of solidarity between lawyers.

Professional ethical rules in general can be understood as a set of behavioural norms that attempt to mitigate moral hazard problems in the delivery of professional services. However, this provision goes beyond what could be reasonably expected in a competitive market. It is hard to understand why a lawyer's actions should be conditioned on his/her new client paying due fees to a former lawyer or why a lawyer who is taking up a case from a new client should have to justify his/her choice to the latter's former lawyer. These requirements hinder competition between lawyers as they make it more difficult to switch between clients.

This legal provision should be removed. It should not be up to a lawyer to enforce legislation on due payments. Moreover, a lawyer should not be required to justify to another lawyer the reasons why he chooses to take up a legal case.

21

Law 145/2015 "Bar Association Bylaws"

Art. 188(1) (a) (e) - Annex

Moral suitability and quality standards

Professionals who : (a) do not hold moral suitability for the exercise of the profession ; (e) magistrates and workers with a bond of public employment who, through disciplinary process, have been dismissed, retired, retired or placed in inactivity for lack of moral suitability cannot be registered with the Bar Association. There is a presumption that people convicted for seriously dishonourable crimes are considered to be morally unsuitable, according to Art. 188, para. 3. of the Bylaws. Art. 177, para. 2, of the Bylaws lists crimes considered to be seriously dishonourable. The decision of moral unsuitability follows an administrative procedure which may confirm the legal presumption or not.

Since the Bar considers that lawyers must meet strict standards of professional conduct, it reclaims the power to determine whether such standards are met by a candidate for membership in the Bar.

The list of seriously dishonourable crimes is not exhaustive. However, the type of crimes listed grants the legal certainty required. In any case, the decision of moral unsuitability follows an administrative procedure which may confirm the legal presumption or not . A misuse of the power held by the Bar Association to judge on moral unsuitability, notwithstanding the list of crimes mentioned above, may lead to the removal from the market of well-qualified professionals, with an impact on the level of competition between professionals, to the detriment of clients.

For paras. 1(a) and (e), we recommend that the assessment of "moral suitability" may benefit from the input of stakeholders such as representatives from other legal professional associations, magistrates and law professors. This option may be implemented by separating representative and regulatory powers, either through the creation of an overarching supervisory body by sector or trade, or through the creation of a supervisory body inside the current professional orders with the necessary 'Chinese walls'.

22

Law 145/2015 "Bar Association Bylaws"

Art. 191(1)(2) - Annex

Professional internship

The full and autonomous practice of the law depends on undergoing a professional internship conducted under the guidance of the Bar Association. The internship evaluation system is ensured and organised by the Bar Association Internship Services.

It aims to publicly certify that the candidate has obtained professional and ethical training appropriate to the activity, and that a candidate complies with the other requirements imposed by the Bar Association Bylaws to obtain the title of Lawyer. Organisation of the internship and the evaluation procedure is conducted solely by peers from the professional association as they regard themselves as the best qualified people to carry out such tasks.

Framework Law 2/2013 establishes that professional internships in any self-regulated profession should be required only when justified by the public interest. An internship constitutes a barrier to access the profession and may reduce the number of professionals competing in the market for legal services, whenever they unduly discourage well-qualified professionals from enrolling in the internship programme, or when they unduly reduce the number of professionals who successfully complete it. Hampering competition may drive prices/fees up and may reduce the diversity and innovativeness of legal services offered in the market, generating a loss in social welfare. However, there is proportionality between the policy objective and the harm to competition on the existence of the internship per se, without taking into account its duration, subject matter, evaluation model and associated costs. When the internship evaluation procedures is conducted solely by peers, its total independence may be compromised, as there is a latent conflict between the public interest a professional association pursues and its own private or corporate interest.

We recommend that the final evaluation of the internship should be conducted by a board, independent from the professional association, which may include members of the latter, but must include also professionals of recognised merit, such us law professors, magistrates, among others.

23

Law 145/2015 "Bar Association Bylaws"

Art. 192(3) - Annex

Professional internship

Each internship supervisor can only supervise one trainee lawyer (designated by the Bar Association) at a time. Art. 16 l) of Regulation 913-A/2015 on the Internship establishes a maximum number of two trainee lawyers per supervisor at the same time.

According to some stakeholders, the limitation on the number of trainee lawyers/trainees per supervisor is too restrictive. However, according to others, this restriction is justified to avoid faulty supervision that may even imply the employment of trainee lawyers in routine work that does not constitute proper professional training. On the other hand, trainee lawyers who are not able to find a supervisor on their own can ask the Bar to appoint one. However the Bar can only appoint one trainee lawyer per supervisor to prevent overloading the latter.

This provision may constitute a barrier to accessing the internship, as it limits the number of trainee lawyers that a supervisor can host. Without a supervisor no trainee lawyer is able to join the Bar. This limit may be particularly restrictive given that many lawyers do not have a rich enough activity to offer a trainee lawyer the number of judicial interventions required to compete the second stage of his/her internship.

The decision on the number of trainees should rest with the supervisor, who is already required to be an experienced lawyer and to behave in a professionally ethical manner.

24

Law 145/2015 "Bar Association Bylaws"

Art. 194 - Annex

Academic qualifications

Only candidates that hold a university degree in law (a), or holders of a foreign higher academic degree in law that has been conferred as equivalence to the degree referred to in the previous paragraph or that has been recognised with the level of this one (b) can be required to register with the Bar Association.

It is our understanding that the Bar considers that only a university degree in law will provide the future lawyer with the required knowledge to practice the profession.

According to the bylaws of the Bar Association, trainee lawyers are required to hold a university degree in law. With membership in the Bar comes a whole set of reserved professional acts. These requirements may significantly reduce the number of professionals who could actively supply legal services in the market. In turn, this may have a negative impact on the prices charged for different types of legal services and on their diversity, and could lead to less innovation in the market. Barristers in the UK are not required to hold a law degree. There are two paths to becoming a barrister in the UK. One way is for a candidate to obtain a Qualifying Law Degree. This is a standard degree in law awarded by a university in the UK, or a degree awarded by a university or establishment of equivalent level outside the UK, accepted by the Bar Standards Board. An alternative path is designed for candidates having graduated in a subject other than law. These candidates may undertake a one-year law conversion course and obtain a Graduate Diploma in Law (GDL), formerly known as the CPE (Common Professional Examination). In Germany no university law degree is necessary to enter the profession of "lawyer". However, candidates must pass a 1st State Exam (after completion of university studies), followed by a two-year induction period common for all legal professions, to qualify as lawyers. In the USA, any university graduate can apply to any law school. Law schools in the USA are institutions where students obtain a professional education in law after first obtaining an undergraduate degree. Most US law schools require a satisfactory undergraduate grade point average (GPA), and a satisfactory score on the Law School Admission Test (LSAT) as prerequisites for admission. Although most US law schools only offer the traditional three-year programme, several US law schools offer an Accelerated JD (Juris Doctor) two-year programme. These other regimes establish alternative access routes to the legal profession, benefiting the profession by allowing access to candidates with a greater diversity of academic backgrounds. Thus, competition in the provision of legal services will be stronger and legal services offered in the market will be more diverse and innovative and better able to meet the demands for a more multidisciplinary approach to increasingly complex problems.

We recommend that access to this profession be open to university degrees other than law's practice degree. The professional associations should work with the legislator to set a transparent, proportional and non-discriminatory process for identification of alternative routes to obtain the strictly necessary or adequate qualifications for the exercise of legal profession. In this case, candidates may be required to hold a postgraduate degree in law or to take a conversion course, and should undergo the same training as other legal trainees, including passing the Bar Exam. This will open access to more individuals with different backgrounds, allowing for more diversity in the offer of services, and more innovation.

25

Law 145/2015 "Bar Association Bylaws"

Art. 195(2)(3)(4) - Annex

Professional internship

The internship lasts between 16 and 18 months and includes a six-month long first stage followed by a second stage lasting no more than 12 months, and includes the final exam evaluated by qualified lawyers. (see Deliberation 1096-A/2017). This first stage is intended to ensure training on technical aspects of the profession and on professional ethics essential to the exercise of the law, ensuring that the trainee lawyer, upon transition to the second stage, is able to carry out professional acts. The second stage of the internship aims at a broad and complementary training of trainee lawyers including their professional relationships with employers, judicial interventions, contacts with judicial life and other services related to the legal profession. It also aims to deepen technical knowledge and trainee development of an ethical conscience through the frequency of thematic training and participation in access to the law regime.

The 16 and 18 months' internship aims to provide the future lawyer with a solid knowledge of certain theoretical areas, practical procedures, and professional contact with other legal entities such as courts. It also aims to transmit to trainee lawyers the required professional ethical standards.

The actual duration of the internship to become a lawyer results from a recent Deliberation of the lawyers’ professional association dated 11 December 2017. It already includes the final exam which guarantees that the internship will not exceed 18 months, in line with the maximum duration set under the Framework Law, Art. 8(2) of Law 2/2013. However, stakeholders reported that internships before the deliberation adopted in December 2017, often lasted longer than the statutory duration, in some cases up to two years. The additional time increases the opportunity costs for trainee lawyers and may discourage them from either finishing or even enter the internship process, which may have a negative impact on the number of lawyers actively competing in the market for legal services. Moreover, the first stage of the internship includes mandatory attendance of courses covering theoretical subjects that are already part of any university law degree curriculum, such as civil procedural practice and criminal procedural practice - see Art. 19(2) of Deliberation 1096-A/2017. The inclusion of such subjects increases the opportunity costs associated with the internship, and may further discourage university law graduates from enrolling in the internship programme, which in turn may have a negative impact on the number of lawyers actively competing in the market for legal services.

We recommend that the theoretical training should provide an e-learning option. This could lead to a reduction in internship fees, as well as reducing the opportunity costs of having to attend those training courses in person. We also recommend that subjects that are part of any required university curriculum (such as a law degree, a suggested conversion or a postgraduate course) should not be included in the theoretical training offered during the first six months of the internship. This would have a beneficial impact on the duration of the whole internship in cases such as that of lawyers.

26

Law 145/2015 "Bar Association Bylaws"

Art. 195(9) - Annex

Professional internship

The General Council of the Bar Association has the competence to decide the organisation and model of the internship, the evaluation system and the organisation of the internship final exam.

The Bar, through its general council, regards itself as the most competent entity to carry out such organisational and evaluation tasks.

This provision gives the Bar Association the exclusive right to organise and regulate the internship programme. Moreover, the evaluation of interns is carried out exclusively by peers from the Bar Association. As the Bar Association pursues both public and private interests, and there is a latent conflict between both types of interests, this exclusivity may open the possibility for the Bar to control access to the profession for reasons other than the public interest. In turn, this control may reduce the number of lawyers competing in the market for legal services which may negatively impact innovation and diversity of such legal services, as well as the prices being charged, to the detriment of consumers.

We recommend that the final evaluation of the internship should be conducted by a board, independent from the professional association, which may include members of the latter, but must include also professionals of recognised merit, such us law professors, magistrates, among others.

27

Law 145/2015 "Bar Association Bylaws"

Art. 204 (2) - Annex

Registration and licensing

Lawyers from EU Member States are permitted to exercise the profession in Portugal as "lawyers from the EU" and must use their home-country professional title in the original language. The representation of clients in court can be performed by those lawyers, using their original professional title, but with the orientation of a Portuguese lawyer, registered with the Bar Association. If alternatively they wish to act as lawyers using the Portuguese title ("advogado"), they need to register within the Portuguese Bar Association.

It is our understanding that this provision might aim to address the lack of competence in the Portuguese language in the case of foreign lawyers, together with a lack of knowledge of national legislation, jurisprudence and legal procedures. The recognition of lawyers from EU Member States is dealt with in Art. 203. They are allowed to exercise the profession in Portugal, as "lawyers from the EU".

While the requirement that a lawyer from another Member State must be accompanied by a Portuguese lawyer ("advogado") to represent a client in a Portuguese court seems to be within the scope of Art. 5 (second paragraph) of the Directive 77/249/CEE, this directive does not impose such requirement, leaving the final decision to the Member State. The provision imposes an extra burden on lawyers from the EU to exercise their activity in Portugal and might dissuade or prevent non-Portuguese lawyers from acting as such in court.

We recommend reassessing this provision to allow foreign lawyers, the option to present evidence of their knowledge of the Portuguese language, national legislation and court procedures as an alternative mechanism to the obligation of being supervised by a Portuguese lawyer (or became a registered "advogado").

28

Law 145/2015 "Bar Association Bylaws"

Art. 213(1)(2) - Annex

Partnership / Ownership of professional firms

Partnership in law firms is restricted to lawyers, law firms previously constituted and registered with the Bar Association and associative organisations of professionals treated as lawyers and established in another EU Member State, whose capital and voting rights fall predominantly with the professionals concerned (except if the association does not have share capital).

Paras. 1 and 2 are to be read together. It is our understanding that such partnership restrictions follow from concerns with guarding professional secrecy/privilege, as opening partnerships to people outside the profession could threaten lawyer-client privilege, and with preventing conflicts of interest between different partners.

To open up a professional firm to external ownership means to open the firm up to more investment, thus allowing access to a wider pool of capital. External ownership, partial or total, means capital ownership by non-professionals, ownership of voting rights, or both. This opening will enable professional firms to satisfy a greater pool of consumers and reap the benefits of a larger scale of operations. For younger professionals, not yet well established in their profession, it would also mean more opportunities to set up their own professional firm and compete in the market. This will generate a greater ability by professional firms to compete in the single market and internationally. It would also improve risk management among the owners of a professional firm, hence, lowering operational costs and possibly lowering prices charged to consumers for the different professional services being delivered in the market. These effects would apply to all professional firms across all 13 professions. But their impact would be felt more strongly in the legal professions (lawyer s, notaries, and solicitors and enforcement agents), as the “professional partnership model” is the only professional organisational form allowed.

Ownership/partnership of law firms should be opened to other professionals and non-professionals. We also recommend that other professionals and non-professionals be allowed to hold a majority of a professional firm’s social capital, together with a majority of voting rights.

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Law 145/2015 "Bar Association Bylaws"

Art. 213(6)- Annex

Management of professional firms

The Bar association bylaws require that all members of a law firm's management are lawyers.

This restriction is deemed necessary to preserve lawyers' autonomy and independence and to guarantee the pursuit of the main corporate object of a law firm, which is not reduced to the single pursuit of commercial interests.

Framework Law 2/2013 only requires that one of the managers or administrators of a professional firm be a member of the professional association (or, in case registration in the professional association is not mandatory, fulfilment of all membership requirements). Conflicts between owners (the principals) and managers (the agents) has been the subject of extensive literature, and various payment schemes have been adopted to align managers’ interests as close as possible to those of the owners. A professional management, which ultimately answers to the owners of the professional firm, may be a better option as it will benefit from the better knowledge managers have of the market, the types of services demanded by clients, the best ways to reach them, and the best way to introduce innovations into the delivery of legal services. Foregoing professional management will lead to less diversity and innovation of services, to a less successful match between services that are supplied and demanded, and possibly to higher prices.

We recommend that the separation between ownership and management should be allowed in all professional firms and that their management may include non-professionals.

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Law 145/2015 "Bar Association Bylaws"

Art. 213(7) - Annexe

Multidisciplinary practice in professional firms

Law firms are not allowed to engage directly or indirectly in any type of association or integration with other professions, activities or entities whose corporate purpose is not the exclusive exercise of advocacy.

It is our understanding that such association restrictions follow from concerns with guarding professional secrecy, as opening partnerships to people outside the profession could threaten lawyer-client privilege, and with preventing conflicts of interest between different associates.

By restricting certain legal acts to lawyers (and solicitors), this provision limits the number of professionals who can offer legal services in the market to the detriment of businesses and consumers. This restriction may lead to higher prices for those services and less diversity and innovation. This provision also limits the type of firms allowed to provide legal services, and should be read together with Art. 213 of the laws. For example, it prohibits multidisciplinary law firms. This prohibition has already been questioned by some stakeholders and by the Portuguese Association of Law Firms (ASAP) – see conclusions from ASAP 8th Annual Meeting in 2015. To restrict multidisciplinary activity in a professional firm is to restrict the association of different professionals, belonging to different professional associations (some may not even belong to a public professional association), who wish to exercise their professional activities within the same firm and in the pursuit of the firm’s corporate or social objective(s). In a professional firm, this restriction takes the form of a restriction on partnership – restricting, or banning altogether, non-professional partners. This restriction is particularly acute in the case of the legal professions. To rule out multidisciplinary activity in the same professional firm, between potentially complementary service providers, harms competition and can be detrimental to consumer welfare. In fact, this restriction does not allow for the full exploration of economies of scope that come with the offer of different services by a same “service delivery unit” that shares infrastructure and human capital. It foregoes gains from specialisation and service quality that would result from the interaction between a wider range of professionals. This also means foregoing the exploitation of economies of scale and the advantages of branding. It also does not allow for the mitigation of the double marginalisation (or double mark-up)problem that comes with multidisciplinary activities which can complement each other, by segmenting the services provided. This means foregoing lower average costs in a multi-product firm, thereby leading to higher fees being charged to clients, while preventing clients from further benefits that could be gained from a more convenient "one-stop shop" for a wider range of professional services. Ruling out multidisciplinarity within a profession can reduce the scope for better risk management between different professional activities within the same professional firm, as they may be subject to non-identical demand volatility or uncertainty, i. e. , reduction in the scope for internal risk- spreading to be understood as the ability to transfer resources in response to fluctuations in demand. To offer a wider range of professional services means to be better prepared to face market uncertainties. Furthermore, opening up a professional firm to multidisciplinary activities is likely to ease the introduction of innovative products but also to spur innovation in the delivery of already existing products or ranges of products.

We recommend that the prohibition of multidisciplinary practice in professional firms should be removed, particularly in the case of the legal professions, where the “professional partnership model” is the only model allowed for the practice of the profession in a collective way. The creation of "Alternative Business Structures" can lead to more innovation, a broader range of services and easier access to legal services and legal advice for businesses and consumers.

31

Regulation 40/2005 "Report on fees to the Bar Association"

Art. 1, Annex 1

Professional fees

Creates a control regime over fees charged to clients by lawyers. The competence for the review of such fees lies with the Bar Association, in accordance with Art. 43(3)(e) of the former bylaws. This competence covers professional services provided by both national and foreign lawyers registered with the Bar Association and also those services legitimately provided by foreign lawyers registered with the Portuguese Bar under their professional title of origin. A report on fees (laudos) is defined in the Art. 2. It constitutes a technical opinion and judgment on the qualification and valuation of services provided by a lawyer, taking into account the rules of the Bar Association bylaws, other applicable legislation and these regulations. Fees (honorários) are defined in Art. 3. A fee represents the remuneration for professional services rendered by a lawyer (or trainee lawyer) when practicing acts proper to the profession.

The policy objective is to offer redress for the charging of possibly inadequate prices by lawyers. The Bar Association is considered to be best suited to analyse the complaint.

We can question why the aggrieved party should not be able to dispute the fees charged directly in court or appeal to an independent third party, even admitting that the court might not be as knowledgeable as the Bar about the normally charged fees and their rationale. As the control mechanism stands, depending on the possible extent of an eventual price comparison between providers resulting from this fee control mechanism, this provision may be too permissive. In fact, this provision could facilitate price/fees comparisons between lawyers and law firms through some form of information dissemination centred in the Bar. Being this the case, it may result in an unjustified restriction of competition.

We recommend that the redress procedure should involve an independent third party, such as an Ombudsman for the legal professions, be set in place, thus avoiding the pitfalls described.

32

Regulation 40/2005 "Report on fees to the Bar Association"

Art. 15(4)(5) of Annex 1

Professional fees

Under the control regime implemented by the Bar Association over fees charged by lawyers to their clients, if the rapporteur concludes that the fees considered reasonable would be inferior to the fees charged but by less than 10%, then he proposes no revision of fees. Otherwise, at the end of the procedure, the rapporteur must propose the amount of fees to be charged which, had they been applied, would have resulted in a favourable report.

We understand that this provision attempts to protect clients from excessive prices/fees. It introduces a rule that attempts to distinguish reasonable fees from excessive fees, but allowing at the same time for some leeway (the 10% rule) when considering whether the effectively charged fees are truly excessive. There may be a logical problem when we consider paras. 4 and 5 together. The point is that, in the case of a complaint by a client seeking redress from what they consider excessive fees, there might not be a unique fee amount which, if it had been charged, would have had a favourable report.

First, it is not clear whether the aggrieved party can appeal to a civil/administrative court about a decision by the rapporteur they do not agree with. Second, we could even question why the aggrieved party should not be able to dispute the fees charged directly in court or appeal to an independent third party, even admitting that the court might not be as knowledgeable as the Bar about the normally charged fees and their rationale. An Ombudsman, as an independent party, could be particularly helpful to assess and solve this type of conflict over charged fees, avoiding long disputes. As the control regime now stands, and since the rapporteur is also a member of the Bar, one cannot exclude at the outset the fact that some information on fees might circulate among members, even if the presence of some type of "Chinese wall", could then lead to practices restrictive to competition, possibly due to some form of collusion between Bar members as providers of legal services.

We recommend that the redress procedure should involve an independent third party, such as an Ombudsman for the legal professions, to be set in place, thus avoiding the pitfalls described.

33

Regulation 40/2005 "Report on fees to the Bar Association"

Annex II

Administrative costs

This annex II defines the fees to be paid to the Bar Association by whoever asks for a report on the fees charged by a lawyer or a law society, as established in Art. 23.

There is no recital providing information about the policy objective.

The Bar Association has monopoly power over these legal opinions called laudos and over the (administrative) fees charged by the Bar for requesting a report on the lawyer's fees/prices. The administrative fees should be clear, transparent, and proportional and should reflect the true costs of providing those services, including the drafting of a report on those legal fees/prices charged by the lawyer. It is not clear that these principles are adhered to in this provision (Annex II). Several stakeholders were asked about the rationale of these (administrative) fees, but no explanation was given for the values of the fees and the rationale for their values. Now, if these administrative fees are generally considered too high, clients or other entities may be reluctant to ask the Bar for redress. In which case, and given the high information asymmetry between lawyers and their clients on what are "reasonable fees", price competition between lawyers might not be enough to guarantee that competitive prices are charged for the different legal services offered in the market.

The value of these fees, as any other administrative fees, should be defined and justified in a clear and transparent way. They should also be proportional and reflect the true costs of providing those services, including the drafting of a report on those legal fees/prices charged by the lawyer.

34

Regulation 913-A/2015 "Regulation of internship by the Bar", as amended by Deliberation 1096-A/2017 from the Bar Association

Art. 2-A(5)(6)

Professional internship

The first stage of the training is intended to initiate the trainee lawyer to technical aspects of the profession and to the theoretical subjects and professional ethical standards considered essential to the exercise of the profession, as he joins the second stage of the internship. The second stage of the internship aims to offer broad and complementary training to trainee lawyers including professional relationships with the intern's supervisor and the law firm where the internship takes place, contacts with judicial life and other services related to professional legal activity. It also aims to deepen technical knowledge and development of an ethical conscience through the frequency of thematic training and participation in access to the law regime.

The internship aims to provide the future lawyer with a solid knowledge of certain theoretical areas, practical procedures, and professional contact with other legal entities such as courts. It also aims to provide the trainee with an awareness of professional ethical standards.

The (two-stage) internship represents a barrier to access the profession as it represents an opportunity cost to become a lawyer. This may discourage some university graduates from either completing or even entering the internship process and is likely to have an impact on the number of lawyers actively competing in the market for legal services. The existence of a two-stage internship is a barrier to competition, but proportional when taking into consideration the policy objective and the harm to competition, and without taking into consideration its duration, subject matter, evaluation model and associated costs, where it may be disproportionate and unnecessary to fulfil the policy objective.

We recommend that the theoretical training (1st part of the stage) should provide an e-learning option. This could lead to a reduction in internship fees, as well as reducing the opportunity costs of having to attend those training courses in person. We also recommend that subjects that are part of any required university curriculum (such as a law degree, a suggested conversion or a postgraduate course) should not be included in the theoretical training offered during the first six months of the internship. This would have a beneficial impact on the duration of the whole internship in cases such as that of lawyers.

35

Regulation 913-A/2015 "Regulation of internship by the Bar", as amended by Deliberation 1096-A/2017 from the Bar Association

Art. 3 (2) (3)

Professional internship

(2) The National Committee for Internships - CNEF - is made up of fifteen members, eight of whom are nominated by the General Council, one of whom presides with a casting vote, and the other seven nominated by each of the Regional Councils. (3) All CNEF Lawyers members must have their active membership in the Bar Association and may not have been sanctioned with a disciplinary penalty higher than a fine

The National Committee for Internships - CNEF - of the Bar Association must organise internship rules in order to guarantee a rigorous professional training and ensure the implementation of a training and qualification system that is fair and proportionate to the demanding requirements of access to the profession (Art. 4). With that in view, the Professional Association nominates the Lawyers that will have those functions.

Given the aims and attributions of the National Committee on Internships (CNEF), this entity within the Bar Association also has the power to determine the scope, nature and timing of the whole evaluation procedure during the internship programme. Its attributions provide the CNEF with a significant role in controlling access to the profession through the control of the whole internship programme, including evaluation procedures. Such control could have a negative impact on the number of lawyers competing in the market for legal services.

We recommend that the evaluation procedures during the whole internship programme should be conducted by a board, independent of the professional association, which may include members of the latter, but must include also professionals of recognised merit, such us law professors and magistrates, among others.

36

Regulation 913-A/2015 "Regulation of internship by the Bar", as amended by Deliberation 1096-A/2017 from the Bar Association

Art. 19(1)

Professional internship

During the first stage of the internship, the trainee lawyer works in his supervisor's office and attends the required training sessions. These training sessions are provided by the Bar Association Regional Internship Centres or determined by the CNEF (National Committee for Internships).

It is our understanding that the Bar, through CNEF, regards itself as the most competent entity to organise and co-ordinate the first stage's training sessions.

The six-month-long first stage of the internship, with attendance at the different training sessions by the intern, constitutes an opportunity cost and may discourage some university graduates from either completing or even entering the internship process. This is likely to have an impact on the eventual number of lawyers actively competing in the market for legal services. The existence of a two-stage internship is a barrier to competition, but proportional when taking into consideration the policy objective and the harm to competition, and without taking into consideration its duration, subject matter, evaluation model and associated costs, where it may be disproportionate and unnecessary to fulfil the policy objective. Making available e-learning options as alternatives to such attendance may reduce such opportunity costs, including a possible shortening of the six-month-long first stage.

We recommend that the theoretical training (1st part of the stage) should provide an e-learning option. This could lead to a reduction in internship fees, as well as reducing the opportunity costs of having to attend those training courses in person. We also recommend that subjects that are part of any required university curriculum (such as a law degree, a suggested conversion or a postgraduate course) should not be included in the theoretical training offered during the first 6 months of the internship. This would have a beneficial impact on the duration of the whole internship in cases such as that of lawyers.

37

Regulation 913-A/2015 "Regulation of internship by the Bar", as amended by Deliberation 1096-A/2017 from the Bar Association

Art. 19(2)

Professional internship

The Regional Internship Centres offer compulsory training sessions, namely in the areas of professional ethics, civil procedural practice and criminal procedural practice, according to programmes to be defined by the CNEF and approved by the General Council of the Bar Association.

It is our understanding that the Bar, through the Internship Centres, regards itself as best qualified to organise and offer such compulsory training courses and define their programmes through the CNEF.

This provision requires interns to attend course subjects that are part of any undergraduate law degree curriculum, such as civil procedural practice and criminal procedural practice, should not be repeated during the internship first stage theoretical training. This burden imposes an opportunity cost on trainees and may dissuade law university graduates from ever entering the internship programme and eventually becoming lawyers able to compete in the market for legal services. Moreover, mandatory attendance of such courses creates additional opportunity costs, which could be mitigated by offering e-learning options as alternatives to mandatory attendance.

We recommend that the theoretical training should provide an e-learning option. This could lead to a reduction in internship fees, as well as reducing the opportunity costs of having to attend those training courses in person. We also recommend that subjects that are part of any required university curriculum (such as a law degree, a suggested conversion or a postgraduate course) should not be included in the theoretical training offered during the first 6 months of the internship. This would have a beneficial impact on the duration of the whole internship in cases such as that of lawyers.

38

Regulation 913-A/2015 "Regulation of internship by the Bar", as amended by Deliberation 1096-A/2017 from the Bar Association

Art. 19(3)

Professional internship

Trainee lawyers must attend a minimum of 75% of the compulsory training sessions during the first stage, except in case of serious illness, maternity leave or similar situations. In these latter cases, the minimum can be reduce to 50%, pending approval by the Internship Centre.

It is our understanding that the Bar regards the attendance of training courses by the trainee to be an essential part of their training process.

The opportunity cost which such attendance rules impose on trainees may dissuade law university graduates from ever entering the internship programme and eventually becoming lawyers able to compete in the market for legal services. The development of e-learning options could lead to a reduction in internship fees, as well as in the opportunity costs of having to attend those training courses in person. This would imply revisiting the need to attend a minimum of 75% of the compulsory training sessions.

We recommend that the theoretical training be also available via e-learning as an alternative option. This alternative would reduce the opportunity costs of having to attend those training courses in person, and it would imply revisiting the need to attend a minimum of 75% of the compulsory training sessions.

39

Regulation 913-A/2015 "Regulation of internship by the Bar", as amended by Deliberation 1096-A/2017 from the Bar Association

Art. 21

Professional Internship

The supervised practice and thematic training referred to in Art. 2(4) (i. e. , second stage of the internship) take place under the general and permanent direction of the supervisor and the orientation and intervention by the CNEF and the Regional Internship Centres.

It is our understanding that, notwithstanding the supervision carried out by the trainee supervisor, the Bar considers it important that CNEF and the Internship Centres offer guidance and intervene whenever necessary during the internship process, to guarantee that it fulfils the aims set by the Bar itself. It is our understanding that the Bar Association regards itself as the most competent entity to carry out such organisational steps.

This provision gives an exclusive right to the Bar Association for the organisation of internships. This organisation covers both the first and the second stage. This second stage includes an evaluation of the work carried out by the intern during this stage. As the Bar Association pursues both public and private/corporate interests, this exclusivity could provide the Association with an opportunity to eventually control access to the profession through the control of the whole internship programme. Such control could have a negative impact on the number of lawyers competing in the market for legal services.

We recommend that the evaluation procedures during the whole internship programme should be conducted by a board, independent of the professional association, which may include members of the latter, but must include also professionals of recognised merit, such us law professors and magistrates, among others.

40

Regulation 913-C/2015 "Regulation for Registration with the Bar of Lawyers and Trainee Lawyers"

Art. 2(1)(2)

Professional title

Only holders of an academic qualification as required by the Bar Association bylaws, who also meet the other registration requirements prescribed therein and the requirements laid down by this regulation, can register with the Bar Association. This registration and its maintenance are necessary to lawfully hold the title of Lawyer ("Advogado") and Trainee lawyer ("Advogado estagiário") and the enjoyment of the rights that come with these titles.

It is our understanding that the Bar considers that, apart from the other requirements, only a university law degree can provide the necessary theoretical knowledge required for a lawyer or a trainee lawyer.

Setting exclusivity requirements for the use of the professional title of Lawyer, with all that implies in terms of reserved acts, limits the number of legal service suppliers which in turn may have a negative impact on prices charged, on innovation, and on the diversity of those services. This provision may limit the number of professionals who can offer legal services in the market. This may restrict access to legal services to the detriment of businesses and consumers and may lead to higher prices for those services and less diversity and innovation. The scope of reserved legal activities practised by the legal professions in Portugal is quite wide. It may unduly restrict competition from unauthorised legal providers and non-legal providers, potentially with lower cost, in which case the option to reserve activities may not be proportional to ensure consumer protection and to secure access to justice and legal advice. Given that the legal professions are already very restrictive, with tightly controlled entry, there seems little point in carving out the market for certain services. In this case, the scope of the reserved acts must be revised. In general, reserved activities or tasks for specific categories of professionals should be abolished in cases where: (i) the protection is disproportionate to the policy objective because the tasks may already be performed by other well-qualified professionals or are not a danger to public safety; (ii) there is strong and well-regulated protection of the professional title which guarantees the quality of the professionals that are allowed to work; or (iii) the restriction is no longer required owing to legal, societal or professional developments that make the restriction obsolete by its objective. In several cases, opening up reserved activities to additional qualified professions could generate substantial consumer benefits, in the form of innovative and more diverse services at lower prices. For instance, alternative professionals with a lower level of qualifications could better serve consumers with simple needs, who could otherwise overpay when retaining professionals with qualifications suited to more complex needs.

We recommend that the profession of lawyer should review all its reserved activities with a view to opening the exercise of them to the other legal professions under due supervision of the work performed. We also recommend opening the market of legal advice to professionals (i. e. legal experts) and entities for which they work that want to provide legal advice on a regular basis.

41

Regulation 913-C/2015 "Regulation for Registration with the Bar of Lawyers and Trainee Lawyers"

Art. 6(1)(2)

Registration and licensing

Lists the necessary documentation and the administrative requirements for the registration of a trainee lawyer in the Bar.

According to the stakeholders the documents required for the application procedure are relevant to prove compliance with the registration requirements.

One can question the need for certain documents to be handed (such as the trainee lawyer's birth certificate and at the same time ID card). This type of administrative burden is useless and costly, and accrues to a trainee lawyer's opportunity cost of registering with the Bar.

A clear effort must be taken to lighten the remaining burden of red tape, including a stronger reliance on e-documents. For instance, consider the possibility to remove the need to hand in a birth certificate.

42

Regulation 913-C/2015 "Regulation for Registration with the Bar of Lawyers and Trainee Lawyers"

Art. 8

Internship

Registration in the Bar Association as a lawyer depends on the fulfilment of internship obligations with approval in the aggregation test (final examination) in accordance with the internship regulations in force.

The professional internship aims to ensure that future lawyers have the adequate theoretical and practical training, experience and ethical posture to exercise the profession of lawyer, beyond the specialised knowledge they have acquired in any law school. The final examination purports to evaluate whether during this internship, under the direction of a supervisor and guidance from the Bar, each trainee has successfully acquired the required theoretical and practical training, the professional experience and ethical posture deemed necessary to fully exercise the profession of lawyer.

Framework Law 2/2013 establishes that professional internships in any self-regulated profession should be required only when justified by the public interest. An internship constitutes a barrier to access to the profession and may reduce the number of professionals competing in the market for legal services, whenever they unduly discourage well-qualified professionals from enrolling in the internship programme, or when they unduly reduce the number of professionals who successfully complete it. Hampering competition may drive prices/fees up and may reduce the diversity and innovativeness of legal services offered in the market, generating a loss in social welfare.

We recommend that the final evaluation of the internship should be conducted by a board, independent from the professional association, which may include members of the latter, but must include also professionals of recognised merit, such us law professors, magistrates, among others. We recommend that the fees required for internship be calculated under a transparent, non-discriminatory and cost-based criteria. These would have a beneficial impact on the duration and cost of internships.

43

Regulation 913-C/2015 "Regulation for Registration with the Bar of Lawyers and Trainee Lawyers"

Art. 9 (2) (c) (f) and Art. 12 (3) (b) €

Registration and licensing

Lists the necessary documentation and the administrative requirements for the registration of a lawyer with the Bar, as well as the formal steps to be taken for full registration.

According to the stakeholders the documents required for the application procedure are relevant to prove compliance with the registration requirements.

One can question the need for certain documents to be handed in such as the trainee lawyer's birth certificate (for national citizens), when the trainee lawyer also has to hand in a copy of their ID and show the original. This type of administrative burden is useless and costly, and accrues to a trainee lawyer's opportunity cost of registering with the Bar.

A clear effort must be taken to lighten the remaining burden of red tape, including a stronger reliance on e-documents. For instance, consider the possibility to remove the need to hand in a birth certificate.

44

Regulation 913-C/2015 "Regulation for Registration with the Bar of Lawyers and Trainee Lawyers"

Art. 18

Registration and licensing

These articles deal with the registration of lawyers of Brazilian nationality on a reciprocal basis, and list the necessary documentation and the administrative requirements for the registration.

This provision derives from the reciprocity agreement between the two countries.

One can question the need for certain documents to be handed in such as the candidate's university law degree final grade. This type of administrative burden can be useless and costly, and accrues to the opportunity cost of registering with the Bar.

A clear effort must be made to lighten the remaining burden of red tape, including a stronger reliance on e-documents. For instance, consider to remove the birth certificate on a mutual basis.

45

Regulation 913-C/2015 "Regulation for Registration with the Bar of Lawyers and Trainee Lawyers"

Art. 21

Registration and licensing

A foreign national's request to register with the Portuguese Bar as a trainee lawyer is submitted to the Bar Regional Council that corresponds to his/her internship supervisor's professional address. Such a request is accompanied by the necessary documentation as listed in this provision, including information on the supervisor, such as his/her name, address, phone and e-mail, and past professional activities, together with information on the applicant. After the Regional Council decides that the submitted documentation is complete, it sends a proposal to the General Council of the Bar Association on whether the foreign national is to become a member of the bar. The General Council will then issue its final decision. Note again that this provision is meant for foreign nationals from third countries with no reciprocity agreement with Portugal.

According to the stakeholders, these documents are necessary to fulfil the requirements established for the registration of trainee lawyers with the Bar Association. They aim to provide the Bar with information on the suitability and legal status of the applicant.

One can question the need for certain documents to be handed in such as the foreign professional's birth certificate. This type of administrative burden is useless and costly, and adds to a foreign lawyer's opportunity cost of registering with the Bar.

A clear effort must be taken to lighten the remaining burden of red tape, including a stronger reliance on e-documents. For instance, consider the possibility to remove the need to hand in a birth certificate.

46

Regulation 913-C/2015 "Regulation for Registration with the Bar of Lawyers and Trainee Lawyers"

Art. 22

Registration and licensing

This provision deals with the administrative steps a foreign national, from a country with no reciprocity agreement with Portugal, and that has completed his/her internship as a trainee lawyer with the Portuguese Bar, will have to follow to register as a lawyer with the bar. It also lists the documentation to be submitted by the candidate.

According to the stakeholders, these documents are necessary to fulfil the requirements established for the registration of a foreign lawyers with the Bar Association.

One can question the need for certain documents to be handed in such as the candidate's university law degree final grade, or residency permit in Portugal. Notice that a national does not have to include in his/her certificate the final grade in his/her law degree. This type of administrative burden is useless and costly, and accrues to the opportunity cost of registering with the Bar.

A clear effort must be taken to lighten the remaining burden of red tape, including a stronger reliance on e-documents. For instance, consider the possibility to remove the need to have a certificate with the final grade of the candidate degree.

47

Regulation 913-C/2015 "Regulation for Registration with the Bar of Lawyers and Trainee Lawyers"

Art. 29(1)

Exercise of legal acts by other EU lawyers

The representation and the judicial mandate before Portuguese courts can only be exercised by lawyers from other EU Member States who carry out their activity with their professional title of origin under the effective orientation of a lawyer ("advogado") with active membership in the Portuguese Bar Association.

We may assume that the Portuguese Bar aims to guarantee that a lawyer from another EU Member State who is representing some client in a Portuguese Court of Law on an occasional basis, can obtain advice and help from a Portuguese lawyer in what regards the relevant Portuguese legislation and the due process of law.

While the requirement that a lawyer from another Member State must be accompanied by a Portuguese lawyer ("advogado") to represent a client in a Portuguese court seems to be within the scope of Art. 5 of the Directive 77/249/CEE, this directive does not impose such requirement, leaving the final decision to the Member State. The provision imposes an extra burden on lawyers from the EU to exercise their activity in Portugal and might dissuade or prevent non-Portuguese lawyers from acting as such in court.

We recommend reassessing this provision to allow foreign lawyers, the option to present evidence of their knowledge of the Portuguese language, national legislation and court procedures as an alternative mechanism to the obligation of being supervised by a Portuguese lawyer (or became a registered "advogado").

48

Regulation 913-C/2015 "Regulation for Registration with the Bar of Lawyers and Trainee Lawyers"

Art. 30

Registration and licensing

The establishment in Portugal of lawyers from other EU Member States as referred to in Art. 23, who wish to carry on their business with the professional title of "advogado" (Lawyer), in full equality of rights and duties with Portuguese lawyers, depends on prior registration with the Portuguese Bar on the same terms as the latter.

It is our understanding that this provision might aim to address the lack of competence in the Portuguese language in the case of foreign lawyers, together with a lack of knowledge of national legislation, jurisprudence and legal procedures. The recognition of lawyers from EU Member States is dealt with in Art. 203. They are allowed to exercise the profession in Portugal, as "lawyers from the EU".

While the requirement that a lawyer from another Member State must be accompanied by a Portuguese lawyer ("advogado") to represent a client in a Portuguese court seems to be within the scope of Art. 5 (second paragraph) of the Directive 77/249/CEE, this directive does not impose such requirement, leaving the final decision to the Member State. The provision imposes an extra burden on lawyers from the EU to exercise their activity in Portugal and might dissuade or prevent non-Portuguese lawyers from acting as such in court.

We recommend reassessing this provision to allow foreign lawyers, the option to present evidence of their knowledge of the Portuguese language, national legislation and court procedures as an alternative mechanism to the obligation of being supervised by a Portuguese lawyer (or became a registered "advogado").

49

Regulation 913-C/2015 "Regulation for Registration with the Bar of Lawyers and Trainee Lawyers"

Art. 31 and Art. 32

Registration and licensing

Lists the necessary documentation and the administrative requirements for the registration of a lawyer from another EU Member State.

According to the stakeholders, these documents are necessary to fulfil the requirements established for the registration of foreign lawyers with the Bar Association.

Arts. 30 & 31 seem to require excessive documentation from the candidate seeking to register with the Portuguese Bar Association. They represent an administrative burden that may discourage lawyers from other EU Member States from competing in the market for legal services in Portugal.

A clear effort must be taken to lighten the remaining burden of red tape, including a stronger reliance on e-documents.

50

Regulation 913-C/2015 "Regulation for Registration with the Bar of Lawyers and Trainee Lawyers"

Art. 51 and Art. 52

Self-regulatory regime

The professional association organs may cancel the lawyer registration for reasons other than the lawyer's own request, such as: when a definitive decision is made on the lack of suitability for the exercise of the profession; when a final decision is issued applying the disciplinary penalty of expulsion; in situations outlined in the National Statute Regulation and in other situations provided for by law or by the regulations in force.

The state has empowered the Bar with disciplinary powers over its members to enforce behavioural rules deemed necessary to the profession. Moreover, this empowerment avoids the migration of disciplinary disputes to courts, which would be an undesirable outcome, as it could set a judge against a lawyer in their daily interaction on behalf of the justice system.

The harm to competition arising from the regulatory model, already established by the horizontal framework Law 2/2013 and considered in the bylaws of the professional association, stems from the centralisation in a single entity of the powers to regulate and represent the profession. Because each professional association, apart from representing the profession, controls access to it and its exercise, the regulations issued may create disproportional and anti-competitive restrictions. The freedom to choose and exercise a profession is a fundamental right of the citizen. Also, the freedom of movement of workers and their free establishment to provide services are fundamental principles of the EU internal market. Restrictions to these principles, in the pursuit of the public interest, must be well justified and proportional. When a professional association acquires full responsibility to regulate access to the profession and the conduct of its members, this may have an anti-competitive impact. In fact, professional associations may adopt rules that reduce incentives or opportunities for stronger competition between operators, such as restrictions on advertising and partnerships/ownerships, management or multidisciplinary activities, or restrictions when setting the minimum qualifications to enter the profession, amongst others. As the governing bodies of public professional associations are exclusively composed of their members, there is a risk that their members' interests will not coincide with the public interest. This is one significant reason for including within at least some governing bodies of a professional association, lay people representing the interests of relevant social groups, such as consumer associations, other professionals, and high-profile people with experience in regulatory issues.

We recommend that the regulatory function should be separated from the representative function for self-regulated professional associations, either through the creation of an over-arching supervisory body by sector or trade, or through the creation of a supervisory body inside the current professional orders with the necessary "Chinese walls". The supervisory body takes on the main regulation of the profession such as access to the profession and similar functions. The board of the regulatory body will include not only representative of the profession but also lay people, including high-profile experienced individuals from other regulators, representatives of consumer organisations and academia.

51

Regulation 873/2016 "Regulation of the Office of Legal Consultation of the Municipality of Arruda dos Vinhos"

Art. 5 (1)

Geographical restrictions in the provision of legal aid and reserved acts

The municipal regulation sets a legal aid service office, to be used by local citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in that county (comarca), with preference given to lawyers who live in that municipality, can be appointed by the Bar Association to provide legal advice services and represent citizens before the local "Justice of the Peace" (Julgado de Paz).

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision does not include solicitors in the legal aid scheme as at that time there was no legal agreement for them to practice such acts.

Preferring lawyers that reside in the municipality and appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. In addition, other legal professionals, such as solicitors, are also qualified to provide such legal aid services and, hence, should not be excluded from the provision of these services. Provided legal aid services are ensured for residents in this municipality, opening the provision of such legal aid services to a wider range of legal professionals could lead to greater consumer welfare due to more diverse and innovative services. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services". Amend the provisions so that other legal professionals besides lawyers, such as solicitors, may provide these legal services within the legal aid framework, i. e. , legal advice and juridical representation.

52

Ordinance 993/91 "Regulation of the Office of Legal Consultation of the Municipality of Évora"

Art. 5(1)

Geographical restrictions in the provision of legal aid and reserved acts

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association county council (conselho distrital), and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision does not include solicitors in the legal aid scheme as at that time there was no legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. In addition, other legal professionals, such as solicitors, are also qualified to provide such legal aid services and, hence, should not be excluded from the provision of these services. Provided legal aid services are ensured for residents in this municipality, opening the provision of such legal aid services to a wider range of legal professionals could lead to greater consumer welfare due to more diverse and innovative services. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services. In addition to that, amend the provisions so that other legal professionals besides lawyers, such as solicitors, may provide these legal services within the legal aid framework, i. e. , legal advice and juridical representation.

53

Ordinance 1000/91 "Regulation of the Office of Legal Consultation of the Municipality of Lamego"

Art. 5(1)

Geographical restrictions in the provision of legal aid and reserved acts

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision does not include solicitors in the legal aid scheme as at that time there was no legal agreement for them to practice such acts.

Preferring lawyers that reside in the municipality and appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. In addition, other legal professionals, such as solicitors, are also qualified to provide such legal aid services and, hence, should not be excluded from the provision of these services. Provided legal aid services are ensured for residents in this municipality, opening the provision of such legal aid services to a wider range of legal professionals could lead to greater consumer welfare due to more diverse and innovative services. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services. In addition to that, amend the provisions so that other legal professionals besides lawyers, such as solicitors, may provide these legal services within the legal aid framework, i. e. , legal advice and juridical representation.

54

Ordinance 1207/92 "Regulation of the Office of Legal Consultation of the Municipality of Covilhã"

Art. 5(1)

Geographical restrictions in the provision of legal aid and reserved acts

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision does not include solicitors in the legal aid scheme as at that time there was no legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. In addition, other legal professionals, such as solicitors, are also qualified to provide such legal aid services and, hence, should not be excluded from the provision of these services. Provided legal aid services are ensured for residents in this municipality, opening the provision of such legal aid services to a wider range of legal professionals could lead to greater consumer welfare due to more diverse and innovative services. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services. In addition to that, amend the provisions so that other legal professionals besides lawyers, such as solicitors, may provide these legal services within the legal aid framework, i. e. , legal advice and juridical representation.

55

Ordinance 679/93 "Regulation of the Office of Legal Consultation of the Municipality of Ponta Delgada"

Art. 7 (1)

Geographical restrictions in the provision of legal aid and reserved acts

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision does not include solicitors in the legal aid scheme as at that time there was no legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. In addition, other legal professionals, such as solicitors, are also qualified to provide such legal aid services and, hence, should not be excluded from the provision of these services. Provided legal aid services are ensured for residents in this municipality, opening the provision of such legal aid services to a wider range of legal professionals could lead to greater consumer welfare due to more diverse and innovative services. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services. In addition to that, amend the provisions so that other legal professionals besides lawyers, such as solicitors, may provide these legal services within the legal aid framework, i. e. , legal advice and juridical representation.

56

Ordinance 741/93 "Regulation of the Office of Legal Consultation of the Municipality of Vila do Conde"

Art. 7 (1)

Geographical restrictions in the provision of legal aid and reserved acts

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision does not include solicitors in the legal aid scheme as at that time there was no legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. In addition, other legal professionals, such as solicitors, are also qualified to provide such legal aid services and, hence, should not be excluded from the provision of these services. Provided legal aid services are ensured for residents in this municipality, opening the provision of such legal aid services to a wider range of legal professionals could lead to greater consumer welfare due to more diverse and innovative services. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services. In addition to that, amend the provisions so that other legal professionals besides lawyers, such as solicitors, may provide these legal services within the legal aid framework, i. e. , legal advice and juridical representation.

57

Ordinance 1256/93 "Regulation of the Office of Legal Consultation of the Municipality of Faro"

Art. 7(1)

Reserved acts

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The provision does not include solicitors in the legal aid scheme as at the time there was no legal agreement for them to practice such acts.

Other legal professionals, such as solicitors, are also qualified to provide such legal aid services and, hence, should not be excluded from the provision of these services. Provided legal aid services are ensured for residents in this municipality, opening the provision of such legal aid services to a wider range of legal professionals could lead to greater consumer welfare due to more diverse and innovative services. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that other legal professionals besides lawyers, such as solicitors, may provide these legal services within the legal aid framework, i. e. , legal advice and juridical representation.

58

Ordinance 506/95 "Regulation of the Office of Legal Consultation of the Municipality of Angra do Heroismo"

Art. 7(1)

Geographical restrictions in the provision of legal aid and reserved acts

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision does not include solicitors in the legal aid scheme as at that time there was no legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. In addition, other legal professionals, such as solicitors, are also qualified to provide such legal aid services and, hence, should not be excluded from the provision of these services. Provided legal aid services are ensured for residents in this municipality, opening the provision of such legal aid services to a wider range of legal professionals could lead to greater consumer welfare due to more diverse and innovative services. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services. In addition to that, amend the provisions so that other legal professionals besides lawyers, such as solicitors, may provide these legal services within the legal aid framework, i. e. , legal advice and juridical representation.

59

Ordinance 511/95 "Regulation of the Office of Legal Consultation of the Municipality of Vila Nova de Gaia"

Art. 6(1)

Geographical restrictions in the provision of legal aid and reserved acts

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision does not include solicitors in the legal aid scheme as at that time there was no legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. In addition, other legal professionals, such as solicitors, are also qualified to provide such legal aid services and, hence, should not be excluded from the provision of these services. Provided legal aid services are ensured for residents in this municipality, opening the provision of such legal aid services to a wider range of legal professionals could lead to greater consumer welfare due to more diverse and innovative services. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services. In addition to that, amend the provisions so that other legal professionals besides lawyers, such as solicitors, may provide these legal services within the legal aid framework, i. e. , legal advice and juridical representation.

60

Ordinance 1471/95 "Regulation of the Office of Legal Consultation of the Municipality of Viana do Castelo"

Art. 6(1)

Geographical restrictions in the provision of legal aid and reserved acts

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision does not include solicitors in the legal aid scheme as at that time there was no legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. In addition, other legal professionals, such as solicitors, are also qualified to provide such legal aid services and, hence, should not be excluded from the provision of these services. Provided legal aid services are ensured for residents in this municipality, opening the provision of such legal aid services to a wider range of legal professionals could lead to greater consumer welfare due to more diverse and innovative services. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services. In addition to that, amend the provisions so that other legal professionals besides lawyers, such as solicitors, may provide these legal services within the legal aid framework, i. e. , legal advice and juridical representation.

61

Ordinance 403/97 "Regulation of the Office of Legal Consultation of the Municipality of Matosinhos"

Art. 5(1)

Geographical restrictions in the provision of legal aid and reserved acts

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision does not include solicitors in the legal aid scheme as at that time there was no legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. In addition, other legal professionals, such as solicitors, are also qualified to provide such legal aid services and, hence, should not be excluded from the provision of these services. Provided legal aid services are ensured for residents in this municipality, opening the provision of such legal aid services to a wider range of legal professionals could lead to greater consumer welfare due to more diverse and innovative services. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services. In addition to that, amend the provisions so that other legal professionals besides lawyers, such as solicitors, may provide these legal services within the legal aid framework, i. e. , legal advice and juridical representation.

62

Ordinance 1233/97 "Regulation of the Office of Legal Consultation of the Municipality of Sintra"

Art. 5(1)

Geographical restrictions in the provision of legal aid and reserved acts

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision does not include solicitors in the legal aid scheme as at that time there was no legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. In addition, other legal professionals, such as solicitors, are also qualified to provide such legal aid services and, hence, should not be excluded from the provision of these services. Provided legal aid services are ensured for residents in this municipality, opening the provision of such legal aid services to a wider range of legal professionals could lead to greater consumer welfare due to more diverse and innovative services. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services. In addition to that, amend the provisions so that other legal professionals besides lawyers, such as solicitors, may provide these legal services within the legal aid framework, i. e. , legal advice and juridical representation.

63

Ordinance 621/98 "Regulation of the Office of Legal Consultation of the Municipality of Guarda"

Art. 5(1)

Geographical restrictions in the provision of legal aid and reserved acts

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision does not include solicitors in the legal aid scheme as at that time there was no legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. In addition, other legal professionals, such as solicitors, are also qualified to provide such legal aid services and, hence, should not be excluded from the provision of these services. Provided legal aid services are ensured for residents in this municipality, opening the provision of such legal aid services to a wider range of legal professionals could lead to greater consumer welfare due to more diverse and innovative services. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services. In addition to that, amend the provisions so that other legal professionals besides lawyers, such as solicitors, may provide these legal services within the legal aid framework, i. e. , legal advice and juridical representation.

64

Ordinance 272/99 "Regulation of the Office of Legal Consultation of the Municipality of Oliveira do Bairro"

Art. 4(1)

Geographical restrictions in the provision of legal aid and reserved acts

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision does not include solicitors in the legal aid scheme as at that time there was no legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. In addition, other legal professionals, such as solicitors, are also qualified to provide such legal aid services and, hence, should not be excluded from the provision of these services. Provided legal aid services are ensured for residents in this municipality, opening the provision of such legal aid services to a wider range of legal professionals could lead to greater consumer welfare due to more diverse and innovative services. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services. In addition to that, amend the provisions so that other legal professionals besides lawyers, such as solicitors, may provide these legal services within the legal aid framework, i. e. , legal advice and juridical representation.

65

Ordinance 722/2000 "Regulation of the Office of Legal Consultation of the Municipality of Horta"

Art. 7(1)

Geographical restrictions in the provision of legal aid and reserved acts

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision does not include solicitors in the legal aid scheme as at that time there was no legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. In addition, other legal professionals, such as solicitors, are also qualified to provide such legal aid services and, hence, should not be excluded from the provision of these services. Provided legal aid services are ensured for residents in this municipality, opening the provision of such legal aid services to a wider range of legal professionals could lead to greater consumer welfare due to more diverse and innovative services. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services. In addition to that, amend the provisions so that other legal professionals besides lawyers, such as solicitors, may provide these legal services within the legal aid framework, i. e. , legal advice and juridical representation.

66

Ordinance 238/2001 "Regulation of the Office of Legal Consultation of the Municipality of Barreiro"

Art. 8(1)

Geographical restrictions in the provision of legal aid

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. Solicitors may provide such services if a protocol with the professional association is signed. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision may include solicitors in the legal aid scheme upon conclusion of legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services.

67

Ordinance 239/2001 "Regulation of the Office of Legal Consultation of the Municipality of Albufeira"

Art. 7(1)

Geographical restrictions in the provision of legal aid

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. Solicitors may provide such services if a protocol with the professional association is signed. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision may include solicitors in the legal aid scheme upon conclusion of legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services.

68

Ordinance 1150/2001 "Regulation of the Office of Legal Consultation of the Municipality of Cadaval"

Art. 7(1)

Geographical restrictions in the provision of legal aid

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. Solicitors may provide such services if a protocol with the professional association is signed. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision may include solicitors in the legal aid scheme upon conclusion of legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services.

69

Ordinance 1151/2001 "Regulation of the Office of Legal Consultation of the Municipality of Castelo Branco"

Art. 7(1)

Geographical restrictions in the provision of legal aid

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. Solicitors may provide such services if a protocol with the professional association is signed. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision may include solicitors in the legal aid scheme upon conclusion of legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services.

70

Ordinance 1152/2001 "Regulation of the Office of Legal Consultation of the Municipality of Seia"

Art. 7(1)

Geographical restrictions in the provision of legal aid

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. Solicitors may provide such services if a protocol with the professional association is signed. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision may include solicitors in the legal aid scheme upon conclusion of legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services.

71

Ordinance 1153/2001 "Regulation of the Office of Legal Consultation of the Municipality of Coimbra"

Art. 7(1)

Geographical restrictions in the provision of legal aid

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. Solicitors may provide such services if a protocol with the professional association is signed. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision may include solicitors in the legal aid scheme upon conclusion of legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services.

72

Ordinance 1154/2001 "Regulation of the Office of Legal Consultation of the Municipality of Setúbal"

Art. 8(1)

Geographical restrictions in the provision of legal aid

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. Solicitors may provide such services if a protocol with the professional association is signed. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision may include solicitors in the legal aid scheme upon conclusion of legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services.

73

Ordinance 1155/2001 "Regulation of the Office of Legal Consultation of the Municipality of Estremoz"

Art. 8(1)

Geographical restrictions in the provision of legal aid

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. Solicitors may provide such services if a protocol with the professional association is signed. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision may include solicitors in the legal aid scheme upon conclusion of legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services.

74

Ordinance 1156/2001 "Regulation of the Office of Legal Consultation of the Municipality of Pombal"

Art. 7(1)

Geographical restrictions in the provision of legal aid

The regulation sets a county legal aid service office, to be used by citizens who meet the necessary conditions to benefit from (free) legal aid. Only Lawyers who are registered in the Bar Association regional delegation, and have requested to provide such service, can be appointed by the Bar Association to provide legal advice services. Solicitors may provide such services if a protocol with the professional association is signed. This Ordinance was issued under the regime of article 13 (2) of Law 30-E/2000, nowadays replaced by Law 34/2004.

The geographical restrictions of the county where the lawyer is registered are also meant to ease the access of the lawyer to the office of legal consultation or court, and to ensure a close relationship between the lawyer and the citizens that they represent. Those citizens frequently will have to visit the lawyer office – at their own expenses - to meet them. According to stakeholders, the provision may include solicitors in the legal aid scheme upon conclusion of legal agreement for them to practice such acts.

Appointing only lawyers who are registered in the county is restrictive. It constitutes a geographical barrier to competition, as it excludes lawyers from other municipalities or counties from providing these legal services. Even if lawyers may not compete for clients based on the prices they charge (the services provided are free of charge to local residents, even if the services are paid for by the municipalities), they may differ over the quality, diversity and innovation of the services they provide under the legal aid regime. Lawyers residing in other municipalities or registered in other counties may be interested in providing legal aid in this municipality. An increased reliability on online services can mitigate the need for a face-to-face contact between the beneficiary of legal aid and the legal professional.

Amend the provisions so that the supply of such services is not restricted to legal professionals from the jurisdictional county that covers this specific municipality. Instead, the supply of such services should be opened to all legal professionals from neighbouring counties who may also be available to provide such services.

75

Ordinance 10/2008 (as amended by Ordinances 210/2008, 654/2010 and 319/2011) "Regulates Law 34/2004 regarding Access to the Law and Courts - Legal Aid"

Art. 1(4)

Legal aid

Under the regime of legal aid, legal advice provided to victims of domestic violence is provided by a lawyer.

This provision aims to guarantee that victims of domestic violence are advised by Lawyers, and that a certain quality of service will be met. Due to the nature of the crime involved, only a Lawyer may represent the victim in the Court. For that reason the state provides consultation by a Lawyer and gives the possibility to the victim to be represented by the same professional (Lawyer) in the court, if needed.

This provision excludes other professionals, such as solicitors, who may be as qualified as lawyers to provide the same services, namely legal advice. These services do not include a judicial mandate. Furthermore, the legal aid regime establishes that legal advice can be given by lawyers and solicitors, in spite of the absence of a protocol signed between the two professional associations and the Ministry of Justice, which could be necessary to include solicitors in the regime of legal aid.

This provision excludes other professionals, such as solicitors, who may be as qualified as lawyers to provide the same services, namely legal advice. These services do not include a judicial mandate. Furthermore, the legal aid regime establishes that legal advice can be given by lawyers and solicitors, in spite of the absence of a protocol signed between the two professional associations and the Ministry of Justice, which could be necessary to include solicitors in the regime of legal aid.

76

Deliberation of the Bar Association General Council 2332-A/2015 regarding the Emoluments and Prices to pay to the Bar Association

Paragraph 1

Internship fees

Approves the list of fees to be paid to the Bar Association for different services such as registration as a trainee lawyer candidate or as a candidate to sit exams. For internships begun after the entry into force of Law 145/2015, the application for registration with the Bar Association as a candidate costs EUR 700; before the end of the first stage of the internship, a fee of EUR 300 will be charged; before the date set for the written test included in the final examination, a fee of EUR 500 will be charged.

The fees aim to finance the administrative costs of the services provided by the Bar Association, including the costs of the internship programmes.

If internship fees are too high for candidates, this might lead to fewer candidates joining the internship process and, therefore, result in a lower number of suppliers of legal services competing in the market.

We recommend that the fees required for internship be calculated using transparent, non-discriminatory and cost-based criteria.

Solicitors and Enforcement agents

No

No and title of Regulation

Article

Thematic Category

Brief description of the potential obstacle

Policy objective

Harm to competition

Recommendations

1

Law 49/2004 "Acts of lawyers and solicitors"

Art. 1 (2)

Recognition of qualification

Legal experts of recognised merit and individuals with Master's and Ph. D in Law, whose degree is recognised in Portugal, may also provide legal advice, once they register with the Bar Association for that purpose in accordance with a special procedure to be defined in the Bar Association bylaws.

It is our understanding that the legislator wants to guarantee that whoever provides legal advice has the required skills and qualifications to do so, for the protection of the public interest.

In addition to university law graduates who are members of the Bar Association and solicitors who are members of the (previously existing) Chamber of Solicitors, this provision establishes that legal experts (i. e. , juristas, who must necessarily hold a university law degree) of recognised merit, and Masters and Ph. Ds in Law can also provide legal advice. This provision may exclude university law graduates, who may have considerable work experience in specific legal matters but are not members of the Bar, from providing legal advice in their areas of expertise, either as individuals or as professionals working for a company/firm . These restrictions limit the number of professionals that can enter the market for legal advice, and who could compete in this market. This will have negative impacts on the prices being charged, and possibly on the diversity and innovativeness of the services being provided.

We recommend that the scope of reserved legal activities in Portugal be reduced, especially regarding the legal advice activity. Some activities should be opened to other legal professions and to other professionals even if the opening may be limited and confined to a specific area of knowledge or professional practice.

2

Law 49/2004 "Acts of lawyers and solicitors"

Art. 1 (5)(6)

Reserved acts

These paragraphs list the reserved acts of solicitors, which are: the exercise of the forensic mandate; to provide legal consultation; the elaboration of contracts and the practice of preparatory acts tending to the constitution, alteration or extinction of legal business, namely that practiced in conservatories and notary offices; negotiation for the collection of credits; exercising their mandate before administrative or tax authorities.

It is our understanding that this provision aims to prevent professionals other than lawyers and solicitors from lawfully carrying out reserved acts as identified, as it is in the public interest to require that only technically qualified professionals bound by legal privilege and other specific ethical principles can provide such legal services.

By reserving certain legal acts for solicitors, this provision may limit the number of well-qualified professionals who can offer legal services in the market, which in turn may have negative impacts on the prices being charged, and possibly their diversity and innovativeness. The scope of reserved legal activities practiced by the legal professions in Portugal is quite wide. It may unduly restrict competition from unauthorised legal providers and non-legal providers, potentially with lower cost, in which case the option to reserve activities may not be proportional to ensure consumer protection and to secure access to justice and legal advice. Given that the legal professions are already very restrictive, with tightly controlled entry, there seems little point in carving out the market for certain services. In general, reserved activities or tasks for specific categories of professionals should be abolished in cases where: (i) the protection is disproportionate to the policy objective because the tasks may already be performed by other well-qualified professionals or are not a danger to public safety; (ii) there is strong and well-regulated protection of the professional title which guarantees the quality of the professionals that are allowed to work; or (iii) the restriction is no longer required owing to legal, societal or professional developments that make the restriction obsolete by its objective. In several cases, opening up reserved activities to additional qualified professions could generate substantial consumer benefits, in the form of innovative and more diverse services at lower prices. For instance, alternative professionals with a lower level of qualifications could better serve consumers with simple needs, who could otherwise overpay when retaining professionals with qualifications suited to more complex needs.

We recommend that the scope of reserved legal activities in Portugal be reduced, especially regarding the legal advice activity. Some activities should be opened to other legal professions even if the opening may be limited and confined to a specific area of knowledge or professional practice.

3

Law 49/2004 "Acts of lawyers and solicitors"

Art. 6 (1)

Multidisciplinary practice in professional firms / Reserved acts

With the exception of bureaus and offices composed exclusively of lawyers, solicitors, or lawyers and solicitors (sharing premises), and of solicitor firms and law firms, and of legal consulting offices organised by either the Bar Association or by the Chamber of Solicitors, no other office or firm, constituted in any legal form, can provide to third parties services that include, even if isolated or marginal, the practice of "acts of lawyers and solicitors".

This legal provision aims to guarantee that only lawyers and solicitors may lawfully practice reserved acts as identified in Art. 1, as such reserved acts are practiced under a certain type of organisational form that does not allow the supplying of multidisciplinary services.

By restricting certain legal acts to lawyers (and solicitors), this provision limits the number of professionals who can offer legal services in the market to the detriment of businesses and consumers. This restriction may lead to higher prices for those services and less diversity and innovation. This provision also limits the type of firms allowed to provide legal services, and should be read together with Art. 213 of the bylaws. For example, it prohibits multidisciplinary law firms. This prohibition has already been questioned by some stakeholders and by the Portuguese Association of Law Firms (ASAP) – see conclusions from ASAP 8th Annual Meeting in 2015. To restrict multidisciplinary activity in a professional firm is to restrict the association of different professionals, belonging to different professional associations (some may not even belong to a public professional association), who wish to exercise their professional activities within the same firm and in the pursuit of the firm’s corporate or social objective(s). In a professional firm, this restriction takes the form of a restriction on partnership – restricting, or banning altogether, non-professional partners. This restriction is particularly acute in the case of the legal professions. To rule out multidisciplinary activity in the same professional firm, between potentially complementary service providers, harms competition and can be detrimental to consumer welfare. In fact, this restriction does not allow for the full exploration of economies of scope that come with the offer of different services by a same “service delivery unit” that shares infrastructure and human capital. It foregoes gains from specialisation and service quality that would result from the interaction between a wider range of professionals. This also means foregoing the exploitation of economies of scale and the advantages of branding. It also does not allow for the mitigation of the double marginalisation (or double mark-up)problem that comes with multidisciplinary activities which can complement each other, by segmenting the services provided. This means foregoing lower average costs in a multi-product firm, thereby leading to higher fees being charged to clients, while preventing clients from enjoying further benefits that could be gained from a more convenient "one-stop shop" for a wider range of professional services. Ruling out multidisciplinary activities within a profession can reduce the scope for better risk management between different professional activities within the same professional firm, as they may be subject to non-identical demand volatility or uncertainty, i. e. , reduction in the scope for internal risk-spreading to be understood as the ability to transfer resources in response to fluctuations in demand. To offer a wider range of professional services means to be better prepared to face market uncertainties. Furthermore, opening up a professional firm to multidisciplinary activities is likely to ease the introduction of innovative products but also to spur innovation in the delivery of already existing products or ranges of products.

We recommend that the prohibition of multidisciplinary practice in professional firms should be removed, particularly in the case of the legal professions, where the “professional partnership model” is the only model allowed for the practice of the profession in a collective way. The creation of "Alternative Business Structures" can lead to more innovation, a broader range of services and easier access to legal services and legal advice for businesses and consumers.

4

Law 32/2014 "Pre-executive extrajudicial procedure"

Art. 20

Enforcement agents' fees

In the context of the pre-executive extrajudicial procedures, the enforcement agent is due certain amounts measured in UCs (Accounting Units or Unidades de Conta), plus the value added tax (VAT) at the legal rate in force, for different services rendered. For example, the applicant shall pay the enforcement agent 0. 25 UCs plus VAT for the remuneration of the entities involved in the management and maintenance of the IT platform and direct electronic services of consultations on the goods or location requested, when this remuneration is due in the execution process.

Fixed prices in those legal services were justified on public interest grounds. It was argued by the legislator that they guarantee universal access to these services by all users and that price control would protect the quality of services as it could possibly decrease if prices were the result of competition among enforcement agents. According to the recital of Ordinance 282/2013, the adoption of a fixed tariff system aims to encourage healthy competition among enforcement agents, based on the quality of the service provided and not on different amounts to be charged, on a case-by-case basis, by the enforcement agent to the applicant of the proceeding (client).

Fixed prices can have negative economic impacts. In general terms, and among other impacts, a fixed price regime may discourage innovation. In this case, the scope for innovation and greater service diversity may be slim. However, as innovation in itself is not often anticipated, we cannot rule out its possibility. For this reason, even if in this context, a fixed price regime hampers competition, this would be detrimental to consumer welfare.

This provision involves a type of activity performed by enforcement agents. A technical study should be carried out to analyse to what extent a fixed price/fee regime is in the best public interest, where public interest should include the promotion of competitive markets.

5

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 3

Self-regulatory regime

The professional association controls access to and exercise of the professions of solicitor and enforcement agent. It has the competence to elaborate the technical and ethical norms to be observed by professionals, over whom it has disciplinary powers. The professional association has the exclusive power to grant the professional titles of solicitor and enforcement agent.

It is our understanding that this provision aims to ensure the exercise of the regulatory function, including the disciplinary function and the representative function, taking into account the interests of users of the professional services, by one and the same single entity, the professional association. In the Portuguese Constitution the autonomy and administrative decentralisation to the professional associations is recognised to ensure the defence of the public interest and the fundamental rights of citizens, and also to guarantee the self-regulation of the professions that require technical independence. This regulatory model is based on the public interest of these professions, through the designation of state powers to those entities and with two main characteristics: the exclusivity on granting the professional title and the obligation of being registered within the professional association to practice the profession, which qualifies the nature of the regulation as being mandatory and unitary.

The harm to competition arising from the regulatory model, already established by the horizontal framework Law 2/2013 and considered in the bylaws of the professional association, stems from the centralisation in a single entity of the powers to regulate and represent the profession. Because each professional association, apart from representing the profession, controls access to it and its exercise, the regulations issued may create disproportional and anti-competitive restrictions. The freedom to choose and exercise a profession is a fundamental right of the citizen. Also, the freedom of movement of workers and their free establishment to provide services are fundamental principles of the EU internal market. Restrictions to these principles, in the pursuit of the public interest, must be well justified and proportional. When a professional association acquires full responsibility to regulate access to the profession and the conduct of its members, this may have an anti-competitive impact. In fact, professional associations may adopt rules that reduce incentives or opportunities for stronger competition between operators, such as restrictions on advertising and partnerships/ownerships, management or multidisciplinary activities, or restrictions when setting the minimum qualifications to enter the profession, amongst others. As the governing bodies of public professional associations are exclusively composed of their members, there is a risk that their members' interests will not coincide with the public interest. This is one significant reason for including within at least some governing bodies of a professional association, lay people representing the interests of relevant social groups, such as consumer associations, other professionals, and high-profile people with experience in regulatory issues.

We recommend that the regulatory function should be separated from the representative function for self-regulated professional associations, either through the creation of an over-arching supervisory body by sector or trade, or through the creation of a supervisory body inside the current professional orders with the necessary "Chinese walls". The supervisory body takes on the main regulation of the profession such as access to the profession and similar functions. The board of the regulatory body will include not only representative of the profession but also lay people, including high-profile experienced individuals from other regulators, representatives of consumer organisations and academia.

6

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 89

Registration and licensing

The professional titles of solicitor or enforcement agent and the effective exercise of these two professions are dependent on the enrolment of each professional as full members in the respective professional college (College of Solicitors or College of Enforcement agents) within the same professional association.

It is our understanding that the legislator considers that only professionals fulfilling the requirements defined by the professional association have the capacity and necessary qualifications to exercise the acts of a solicitor and of a enforcement agent so as to safeguard the public interest.

Using mandatory registration as a mechanism to access the profession – protection of title – is restrictive, especially when accompanied by legislation that reserves certain professional acts for holders of the professional title. Professional licensing may remedy inefficiencies resulting from asymmetric information between clients and service providers. However, protection of title together with reserved work and restrictive access to the profession makes it more difficult for businesses and citizens to acquire legal services at affordable prices with innovative and diverse solutions, as it excludes other well-qualified professionals, although not registered with the professional associations, from also competing in the market. Such restrictions will ultimately lead to a loss in social welfare.

The existence of a professional title associated with reserves of activities leads to a monopoly on the performance of those acts. We recommend that the scope of reserved legal activities in Portugal be reduced. Some activities should be opened to other legal professions even if the opening may be limited and confined to a specific area of knowledge or professional practice.

7

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 91 (1) 1st part

Academic qualifications

For admission to the Professional Association of Solicitors and Enforcement agents a university degree in law or in a solicitor's practice (Solicitadoria) is required, as well as the completion of the required internship programmes.

It is our understanding that the legislator considers that only a university law degree or a university degree in solicitor's practice can provide the necessary theoretical knowledge required from a solicitor or a enforcement agent.

Requiring a law university degree or a solicitors’ practice limits the number of professionals that can enter the market and offer their services in it. Owing to these entry restrictions, a smaller number of professionals have to serve the same number of clients. This may lead to higher prices charged for those services as demand may outstrip supply. In addition, with little or no competitive pressure, professionals have little incentive to innovate and to provide a broader range of services. According to the European Commission ("Proposal for a Directive of the European Parliament and of the Council on a proportionality test before adoption of new regulation of professions", COM(2016) 822 final, 10. 1. 2017, p. 15, para. 12), this ultimately leads to a welfare loss for businesses, including SMEs, and individual consumers. We note that solicitors in the UK are not required to hold a university law degree. University graduates in any subject other than law can access the profession. One way is for a candidate to obtain a Qualifying Law Degree. This is a standard degree in law awarded by a university in the UK, or a degree awarded by a university or establishment of equivalent level outside the UK, accepted by the Bar Standards Board. After obtaining the degree, the candidate will undertake a Legal Practice Course (LPC) and a 2-year training contract, which can be offered by a law firm, a public sector body or a company legal department. An alternative path is designed for candidates having graduated in a subject other than law. These candidates will undertake a one-year law conversion course and obtain a Graduate Diploma in Law (GDL), again followed by the LPC and a two-year training contract.

We recommend that the professional association should work with the legislator to set up a transparent, proportional and non-discriminatory process for identification of alternative academic routes to obtain the academic qualifications necessary for the exercise of the profession. We recommend that access to the professions of solicitor and enforcement agent be open to university degrees other than law and solicitor’s practice, as the case may be. Other university graduates may be accepted to complete a "conversion" course in law or solicitor's practice or with postgraduate studies, meeting all the necessary academic requirements for the exercise of the profession in question before undertaking the compulsory internship and final exam. These alternative routes would follow a transparent, proportional and non-discriminatory criterion set in advance.

8

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 95 (1)(5) and Art. 212 (2)

Multidisciplinary practice in professional firms

Solicitors and enforcement agents can create one single firm to exercise their profession together, each professional being subject to the duties and ethical rules established by the professional association applicable to each profession. This firm may pursue both corporate objectives (applicable to the exercise of the profession of enforcement agent and of solicitor). These firms can include both types of professionals but only these two types of professionals.

According to some stakeholders and to some literature on this subject, such restrictions aim to guarantee professional independence, autonomy, compliance with professional ethical rules and the pursuit of the public interest (e. g. , the good administration of justice). According to them, opening the partnership to other professionals outside the profession could: (a) threaten the autonomy and independence of legal professionals; (b) threaten lawyer-client privilege; (c) give rise to conflicts of interest between the different partners within a same legal firm that would risk the pursuit of the social goal binding the legal professional firm. This is because non-professional partners would not be bound by the same professional obligations, as they are not members of the professional association.

To restrict multidisciplinary activity in a professional firm is to restrict the association of different professionals, belonging to different professional associations (some may not even belong to a public professional association), who wish to exercise their professional activities within the same firm and in the pursuit of the firm’s corporate or social objective(s). In a professional firm, this restriction takes the form of a restriction on partnership – restricting, or banning altogether, non-professional partners. This restriction is particularly acute in the case of the legal professions. To rule out multidisciplinary activity in the same professional firm, between potentially complementary service providers, harms competition and can be detrimental to consumer welfare. In fact, this restriction does not allow for the full exploration of economies of scope that come with the offer of different services by a same “service delivery unit” that shares infrastructure and human capital. It foregoes gains from specialisation and service quality that would result from the interaction between a wider range of professionals. This also means foregoing the exploitation of economies of scale and the advantages of branding. It also does not allow for the mitigation of the double marginalisation (or double mark-up)problem that comes with multidisciplinary activities which can complement each other, by segmenting the services provided. This means foregoing lower average costs in a multi-product firm, thereby leading to higher fees being charged to clients, while preventing clients from enjoying further benefits that could be gained from a more convenient "one-stop shop" for a wider range of professional services. Ruling out multidisciplinarity within a profession can reduce the scope for better risk management between different professional activities within the same professional firm, as they may be subject to non-identical demand volatility or uncertainty, i. e. , reduction in the scope for internal risk-spreading to be understood as the ability to transfer resources in response to fluctuations in demand. To offer a wider range of professional services means to be better prepared to face market uncertainties. Furthermore, opening up a professional firm to multidisciplinary activities is likely to ease the introduction of innovative products but also to spur innovation in the delivery of already existing products or ranges of products.

We recommend that the prohibition of multidisciplinary practice in professional firms should be removed, particularly in the case of the legal professions, where the “professional partnership model” is the only model allowed for the practice of the profession in a collective way. The creation of "alternative business structures" will lead to more innovation, a broader range of services and easier access to legal services for businesses and consumers.

9

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 95 (4)

Management of professional firms

The administration of any firm composed of both solicitors and enforcement agents, of only solicitors or only enforcement agents, can only include members of the Professional Association of Solicitors and Enforcement agents.

ln Draft Law 308/XII (which approved the Public Professional Association of Solicitors and Enforcement agents Bylaws, and repealed the Chamber of Solicitors Statutory Laws) states in para. 2 of its recital (exposição de motivos) that, considering the special role of these professionals in the administration of justice, professional societies that include either solicitors or enforcement agents, or both, cannot include any other type of professionals, even legal ones such as lawyers. This restriction is similar to what is established in the bylaws of other public professional associations in the legal area. One reason for this ban is the fact that these professionals have access to personal data that ought to be to protected and safeguarded, given the important values established in the Constitution, especially the right to privacy. In fact, the use of such sensitive personal data by professionals from other areas could facilitate the practice of criminal acts.

Framework Law 2/2013 only requires that one of the managers or administrators of a professional firm be a member of the professional association (or, in case registration in the professional association is not mandatory, fulfilment of all membership requirements). Conflicts between owners (the principals) and managers (the agents) has been the subject of extensive literature, and various payment schemes have been adopted to align managers’ interests as close as possible to those of the owners. A professional management, which ultimately answers to the owners of the professional firm, may be a better option as it will benefit from the better knowledge managers have of the market, the types of services demanded by clients, the best ways to reach them, and the best way to introduce innovations into the delivery of legal services. Foregoing professional management will lead to less diversity and innovation of services, to a less successful match between services that are supplied and demanded, and possibly to higher prices.

We recommend that the separation between ownership and management should be allowed in all professional firms and that their management may include non-professionals.

10

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 105 (1)

Academic qualifications

The following are requirements for the enrolment of professionals in the Professional Association of Solicitors and Enforcement agents, in addition to passing the internship and its final exam: holding a university law degree or a higher degree in a solicitor's practice or an equivalent foreign higher academic degree.

We may assume that this provision attempts to protect clients from potential wrongdoing by solicitors and enforcement agents, purportedly resulting from a lack of suitable academic training or a lack of legal suitability to perform their professional activity, harming the public interest.

Requiring a law university degree or a solicitors’ practice limits the number of professionals that can enter the market and offer their services in it. Owing to these entry restrictions, a smaller number of professionals have to serve the same number of clients. This may lead to higher prices charged for those services as demand may outstrip supply. In addition, with little or no competitive pressure, professionals have little incentive to innovate and to provide a broader range of services. According to the European Commission ("Proposal for a Directive of the European Parliament and of the Council on a proportionality test before adoption of new regulation of professions", COM(2016) 822 final, 10. 1. 2017, p. 15, para. 12), this ultimately leads to a welfare loss for businesses, including SMEs, and individual consumers. We note that solicitors in the UK are not required to hold a university law degree. University graduates in any subject other than law can access the profession. One way is for a candidate to obtain a Qualifying Law Degree. This is a standard degree in law awarded by a university in the UK, or a degree awarded by a university or establishment of equivalent level outside the UK, accepted by the Bar Standards Board. After obtaining the degree, the candidate will undertake a Legal Practice Course (LPC) and a 2-year training contract, which can be offered by a law firm, a public sector body or a company legal department. An alternative path is designed for candidates having graduated in a subject other than law. These candidates will undertake a one-year law conversion course and obtain a Graduate Diploma in Law (GDL), again followed by the LPC and a two-year training contract.

We recommend that the professional association should work with the legislator to set up a transparent, proportional and non-discriminatory process for identification of alternative academic routes to obtain the academic qualifications necessary for the exercise of the profession. We recommend that access to the professions of solicitor and enforcement agent be open to university degrees other than law and solicitor’s practice, as the case may be. Other university graduates may be accepted to complete a "conversion" course in law or solicitor's practice or with postgraduate studies, meeting all the necessary academic requirements for the exercise of the profession in question before undertaking the compulsory internship and final exam. These alternative routes would follow a transparent, proportional and non-discriminatory criterion set in advance.

11

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 105 (3)

Professional internship

Enrolment in the professional association college of enforcement agents depends on the following requirements:- holding Portuguese nationality; - having successfully completed the internship programme; - applying for enrolment in the college up to three years after completion of the internship period. To be exempted from the internship, enforcement agents who have practiced for more than three years up to the publication of these bylaws, must undergo the examination provided for in no. 3 of Art. 115 and obtain a favourable opinion from the CAAJ (Comissão para o Acompanhamento dos Auxiliares de Justiça or Commission for the Follow-up of Assistants of Justice", which is an independent administrative entity whose governing body is appointed by the government, as established in Law 77/2013).

The professional internship aims to ensure that future enforcement agents have the adequate theoretical and practical training, experience and ethical posture to exercise their profession, beyond the specialised knowledge they have acquired at university. The three-year deadline attempts to ensure that the training received during the internship remains valid and up to date. As for holding Portuguese nationality, this was an option taken by the legislator by drawing a parallel with public magistrates. The exclusion of more recent debtors (10 years) constitutes a proxy for behavioural suitability and trustworthiness to perform this legal profession that involves dealing with public assets. According to the professional association, new internship guidelines for enforcement agents have not been published since the 2011 version.

The existence of an internship is not questioned in itself but depending on its duration, subject matter, evaluation model and associated costs, it may be disproportionate and unnecessary to fulfil the policy objective. Mandatory internship may be justified, even if it constitutes a barrier to access to the profession. A major concern stems from the fact that the internship is governed by the professional association itself, which may dispense with the participation of third parties. This may result in an undue limitation of the number of professionals entering the market, with a negative impact on the level of competition and ultimately with a negative impact on consumers’ choice over prices, diversity and innovativeness, as well as quality of services. Hence, this participation by law faculty members, and possibly by magistrates or representatives of the Ministry of Justice, should be institutionalised. The Portuguese nationality requirement is discriminatory. By excluding nationals of other countries, such as professionals from other EU Member States, there may be fewer people able to offer services in the market, even if the market is subject to several constraints imposed by the state in the name of the public interest.

We recommend that the subjects that are part of the academic qualification of professional internships should not be repeated in the theoretical training offered during the internship; also, we recommend that the theoretical training be conducted also via e-learning. We recommend that the final evaluation of the internship should be conducted by a board, independent from the professional association, which may include members of the latter, but must include also professionals of recognised merit, such us law professors, magistrates, among others. We recommend that the fees required for internship be calculated under a transparent, non-discriminatory and cost-based criteria. The Portuguese nationality requirement should be replaced by the requirement that non-nationals should provide evidence of their adequate knowledge of the Portuguese language and of the Portuguese judicial system.

12

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 106 (3)(4)(5)

Registration and licensing

Registration may be refused or cancelled if the member is considered to be legally unfit for the exercise of the professional activity in cases such as: having been declared by a court decision taken in the last 15 years, as insolvent or responsible for insolvency of a company controlled by them or to whose management or supervisory bodies they belonged; having been subject to a disciplinary penalty exceeding the fine imposed while in the exercise of functions as a public servant or equivalent, as a lawyer or solicitor or a member of another public professional association.

The professional association demands of candidates for membership the behavioural standards deemed necessary for public interest reasons. The behavioural standards referred to are objective elements that allow the professional association to assess the candidate's behavioural and moral suitability for membership. The Portuguese Constitutional Court has already ruled that a person's criminal record cannot be used to directly exclude candidates from the professions. It can only be used as an element to be considered when assessing legal suitability.

This provision establishes several behavioural requirements that in some cases might be disproportional or even unrelated to the overall quality of the professional activity. As some of these requirements may lead to the exclusion of well-qualified candidates from accessing the profession, they may reduce the level of competition in the market for this type of legal service, ultimately resulting in lower consumer welfare.

A technical study on access to the professions of solicitor and enforcement agent and of their exercise should be carried out. This technical study should assess the proportionality of all these requirements taking into account the public interest, which includes the promotion of competitive markets.

13

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 115 (3)

Registration and licensing

Those whose registration has been cancelled by the professional association can enrol again as members. But they will be subject to an examination to evaluate their knowledge and competences. They will be required to enrol in the internship programme if they have not exercised their professional activity for more than five years in the case of solicitors or more than three years in the case of enforcement agents.

The five-year and three-year deadlines attempt to ensure that professional skills remain valid and up to date, for the benefit of their clients and of the public interest.

This provision may lead to the imposition of an examination and even the internship programme on a professional who had been a member of the professional association (and supposedly already has concluded the internship or practiced for several years). These requirements may constitute a burden on professionals. In particular, requiring an internship constitutes a barrier to access to the profession and may reduce the number of professionals competing in the market. Hampering competition may drive prices/fees up and may reduce diversity and innovativeness of the services offered in the market, to the detriment of social welfare.

This legal provision should be modified so that enrolment in the internship programme is only mandatory if candidates fail the assessment test

14

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 128

Advertising

Limits the types of advertisement by the professionals. Defines legal and illegal advertisement initiatives.

Some forms of advertising are not allowed. These restrictions aim to protect consumers from misleading or manipulative claims, not easily identifiable due to the asymmetry of information between professionals and clients.

The regulatory restrictions mentioned above limit the freedom of legal professionals to advertise their own activity, which might be especially harmful for those not yet well established in the market. Advertising services to inform and potentially gain clients is crucial to promoting competition and to establishing a level playing field among professionals in the market. Advertising legal services may also lead to lower prices for legal services as it spurs competition among providers. Advertising can improve consumer information and reduce search costs leading to more competition among established firms. Restrictions on advertising increase the price of professional services, increase professionals’ incomes and reduce the entry of certain types of firms. Additionally, there is little evidence on the positive relationship between advertising restrictions and quality of services, even though it may result in fewer consumers using ServiceDirective 2006/114/EC which states that only misleading and unlawful comparative advertising can lead to distortion of competition within the internal market. The interdiction of misleading advertising is foreseen under the national legal regime. To go beyond the EU benchmark, in particular ruling out publicity of comparative contents in a generic way for specific professions, will have an adverse effect on consumer choice and no clear benefits.

Any prohibition or restriction for legal professions beyond the prohibition on misleading and unlawful comparative advertising should be removed.

15

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 132, Art. 133 (2)

Professional internship

Establishes that the power to organise internships comes from the General Council of the professional association, including the selection of the supervisor (patrono).

It is our understanding that the professional association, through its general council, regards itself as the most competent entity for organising the internship programmes.

This provision gives the professional association the exclusive right to organise and regulate the internship programme. Moreover, the evaluation of interns is carried out exclusively by peers from the professional association. As the professional association pursues both public and private interests, and there is a latent conflict between both types of interests, this exclusivity may open the possibility for the professional association to control access to the profession for reasons other than the public interest. In turn, this control may reduce the number of professionals competing in the market for legal services which may negatively impact innovativeness and diversity of such legal services, as well as the prices being charged, to the detriment of consumers.

We recommend that the internship evaluation procedures be conducted by a board, independent of the professional association, which may include members of the latter, but must also include professionals of recognised merit, such us law professors and magistrates, among others.

16

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 136 (1)

Reserved acts

In addition to lawyers, only solicitors with registration in force in the Professional Association of Solicitors and Enforcement agents, and professionals treated as solicitors under the freedom to provide services may, throughout the national territory and before any jurisdiction, body, authority or public or private entity, perform reserved acts of the profession, namely to exercise the judicial mandate, under the terms of the law, as a paid liberal profession.

It is our understanding that this provision aims to prevent professionals other than lawyers and solicitors from lawfully carrying out reserved acts as identified, as it is in the public interest to require that only technically qualified professionals bound by legal privilege and other specific ethical principles can provide such legal services. Art. 20 of the Constitution guarantees that any person, if so desires, has the right to be assisted by a lawyer before any authority.

The several listed acts are reserved for solicitors and lawyers. By reserving certain legal acts for solicitors, this provision may limit the number of well-qualified professionals who can offer legal services in the market, which in turn may have negative impacts on the prices being charged, and possibly diversity and innovation.

We recommend that the scope of reserved legal activities in Portugal be reduced. Some activities should be opened to other legal professions even if the opening may be limited and confined to a specific area of knowledge or professional practice.

17

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 156

Professional internship

Defines the aims of the internship programme for solicitors and its duration, which can vary between 12 and 18 months. The internship includes two parts. The first part involves theoretical and practical training which includes professional ethics. During the second part of the internship, the trainee carries out the different professional acts of a solicitor.

This professional internship aims to ensure that the different candidates acquire the adequate training, experience and ethical posture required to exercise the profession of solicitor, beyond the specialised knowledge they have acquired in any law school.

The existence of an internship is not questioned in itself but depending on its duration, subject matter, evaluation model and associated costs, it may be disproportionate and unnecessary to fulfil the policy objective. Mandatory internship may be justified, even if constitutes a barrier to access to the profession. The horizontal framework law for professional associations (Law 2/2013) introduces limits on the organisation and duration of professional internships. Internships should not last more than 18 months , including the period for training and evaluation, if applicable. In this case, it is proportional. This evaluation made by peers may give rise to a conflict of interest that may not ensure the required independence of the evaluators and result in a lower number of candidates joining the professions. This, in turn, will have a negative impact on competition in the delivery of financial services in the market.

We recommend that the subjects that are part of the academic qualification of professional internships should not be repeated in the theoretical training offered during the internship; in addition, we recommend that the theoretical training also be conducted via e-learning. We recommend that the final evaluation of the internship should be conducted by a board, independent from the professional association, which may include members of the latter, but must include also professionals of recognised merit, such us law professors and magistrates, among others.

18

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 158

Academic qualifications

Enrolment in the internship programme requires that candidates, either nationals or from other EU or EEA countries, hold a university degree in law or in a solicitor's practice, or an equivalent foreign higher academic degree.

It is our understanding that only a completed university law degree or a higher degree in solicitor's practice or an equivalent foreign higher academic degree provide the necessary theoretical knowledge required of a trainee to be able to fully benefit from the internship programme.

Requiring a law university degree or a solicitors’ practice limits the number of professionals that can enter the market and offer their services in it. Owing to these entry restrictions, a smaller number of professionals have to serve the same number of clients. This may lead to higher prices charged for those services as demand may outstrip supply. In addition, with little or no competitive pressure, professionals have little incentive to innovate and to provide a broader range of services. According to the European Commission ("Proposal for a Directive of the European Parliament and of the Council on a proportionality test before adoption of new regulation of professions", COM(2016) 822 final, 10. 1. 2017, p. 15, para. 12), this ultimately leads to a welfare loss for businesses, including SMEs, and individual consumers.

We recommend that the professional association should work with the legislator to set up a transparent, proportional and non-discriminatory process for identification of alternative academic routes to obtain the academic qualifications necessary for the exercise of the profession. We recommend that access to the professions of solicitor and enforcement agent be open to university degrees other than law and solicitor’s practice, as the case may be. Other university graduates may be accepted to complete a "conversion" course in law or solicitor's practice or with postgraduate studies, meeting all the necessary academic requirements for the exercise of the profession in question before undertaking the compulsory internship and final exam. These alternative routes would follow a transparent, proportional and non-discriminatory criterion set in advance.

19

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 163

Professional internship (enforcement agent)

It defines the aim of the internship programme for enforcement agent candidates. This programme is designed and organised by the professional association. It lasts 18 months and admission is subject to a quota regime established by the professional association (college of enforcement agents). The final internship exam is conducted not by the professional association itself but by an independent external entity. Only candidates holding a university degree in law or a higher degree in a solicitors practice may be admitted into the internship programme. The periodicity and the number of quotas to attend an internship is determined by the professional association considering the “effective need of enforcement agents for an efficient functioning of the judicial system” taking into account the opinion of the CAAJ.

This professional internship aims to ensure that the different candidates acquire the adequate training, experience and ethical posture to exercise the profession of enforcement agent, beyond the specialised knowledge they have acquired at university or other institutes of higher education. On the other hand, the internship programme is subject to quotas which are defined by the professional association general council. The definition of these quotas takes into account the effective needs of enforcement agents for the efficient functioning of the justice system. According to information provided by stakeholders, the last time a candidacy process for filling the existing quotas was launched was in 2014.

The existence of an internship is not questioned in itself but depending on its duration, subject matter, evaluation model and associated costs, it may be disproportionate and unnecessary to fulfil the policy objective. Mandatory internship may be justified, even if constitutes a barrier to access to the profession. The horizontal framework law for professional associations (Law 2/2013) introduces limits on the organisation and duration of professional internships. Internships should not last more than 18 months , including the period for training and evaluation.

We recommend that the subjects that are part of the academic qualification of professional internships should not be repeated in the theoretical training offered during the internship; in addition, we recommend that the theoretical training also be conducted via e-learning.

20

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 167 (1)

External regulatory regime

Up to June 15 of each year, CAAJ (the Commission for the Follow-up of Assistants of Justice) can define the maximum number and type of judicial procedures that enforcement agents can be allocated and may hold, after the council of enforcement agents has been consulted.

This provision intends to promote the allocation of judicial procedures among enforcement agents in a balanced and equitable way. The aim is to prevent unmanageable concentrations of procedures in a few enforcement agents that would delay the speedy administration of justice, which constitutes a public good. Deliberation 300/2016, as transcribed in Notice 7530-A/2016, defines the arithmetical formula used to calculate the maximum number of executive actions that can be allocated to a professional society of enforcement agents.

A enforcement agent carries out the executive process and all due diligence, including citations, notifications and publications, pledges and sales and settlement of claims. Although not a representative or agent of the executor, the enforcement agent is chosen by the latter from a list provided by the Professional Association of Solicitors and Enforcement agents. Enforcement agents are supervised by this Professional Association and also by the Commission for the Follow-up of Assistants of Justice (CAAJ). As the CAAJ can define the maximum number and type of judicial procedures that enforcement agents can be allocated and may hold, it is important to guarantee that this definition takes into account the importance of competition by merit, alongside with other public interest criteria. This is so that the current allocation of executive procedures among enforcement agents is not entirely market-based. In fact, the provision under analysis may interfere with the way individual enforcement agents manage their own workload, and limits their freedom to take on executive procedures. This being the case, competition will be hampered, and enforcement agents may have lower incentives to offer services with greater diversity, higher quality and greater innovation.

A technical study should be carried out to assess to what extent the CAAJ's decision process places enough weight on competition by merit. When the CAAJ defines the maximum number of executive procedures that can be allocated to different enforcement agents, the formula employed, including performance measures, should lead to an allocation of procedures as similar as possible to the one resulting from a competitive process.

21

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 173 (1)(2)

Professional fees

For the remuneration of their services, enforcement agents apply the tariffs approved by an order from the government, after consulting the professional association. Each fee/tariff comprises a fixed and a variable part.

It is our understanding that the adoption of a two-part tariff may be justified as follows (see also Ordinance 282/2013). The fixed part is regarded as desirable, to prevent too strong a competition in prices that could lead to a deterioration in quality as, in the understanding of the legislator, would result from competing enforcement agents attempting to cut costs. However, if fees were fixed with no variable part, incentives to deliver good quality services dependent on a higher level of effort, would be non-existent, as shirking would dominate. Hence, the legislator adopts a two-part tariff in an attempt to guarantee the delivery of good quality services by enforcement agents. In addition, setting a reasonable fixed part may allow easier access to enforcement agent services by clients with lower incomes.

Although price control may be helpful to consumers in some cases, it can reduce suppliers' incentives to compete and innovate. A two part-tariff may mitigate this dilemma but it may still harm competition between enforcement agents and reduce incentives to provide high-quality services leading to a loss in social welfare. We posit whether a two-part tariff is the best option to both promote competition and defend the public interest.

A technical study on the exercise of the profession of enforcement agent should be carried out in the short run, as mentioned above. This technical study should assess the whole pricing system as presently defined for the acts performed by enforcement agents. This assessment must include a competitive assessment exercise, as the application of price controls raises serious competition concerns.

22

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 212 (2)(4)

Partnership / Ownership of professional firms

In addition to solicitors and/or enforcement agents, the following may be partners of solicitors firms: (a) companies of solicitors previously constituted and registered in the Professional Association of Solicitors and Enforcement agents; (b) organisations of professionals treated as solicitors established in another EU Member State whose capital and voting rights belong exclusively to the professionals concerned. Societies of solicitors may also have solicitors as non-partners, designated as associates.

According to some stakeholders and to some literature on this subject, such restrictions aim to guarantee professional independence, autonomy, adherence to professional ethical rules and the pursuit of the public interest (e. g. , the proper administration of justice). According to them, opening the partnership to people outside the profession could: (a) threaten the autonomy and independence of legal professionals; (b) threaten lawyer-client privilege; (c) give rise to conflicts of interest between the different partners within the same legal firm that would risk the pursuit of the social goal binding the legal professional firm, because non-professional partners would not be bound by the same professional obligations, as they are not members of the professional association.

To open up a professional firm to external ownership means to open the firm to more investment by allowing access to a wider pool of capital. External ownership, partial or total, means capital ownership by non-professionals, ownership of voting rights, or both. This opening will enable professional firms to satisfy a greater pool of consumers and reap the benefits of a larger scale of operations. For younger professionals, not yet well established in their profession, it would also mean more opportunities to set up their own professional firm and compete in the market. This will generate a greater ability by professional firms to compete in the Single Market and internationally. It would also allow for improved risk management among the owners of a professional firm, hence, lower operational costs and possibly lower prices charged to consumers for the different professional services being delivered in the market. Ultimately, all these restrictions on ownership, shareholding and partnership over professional firms, are detrimental to firms across the entire economy, especially SMEs, and households, as the relaxation of these restrictions can be expected to lead to an increase in their welfare.

We recommend that the ownership and partnership of all professional firms be opened to other professionals and non-professionals, that is, should be open to individuals outside the profession. We also recommend that other professionals and non-professionals be allowed to hold a majority of a professional firm’s social capital, together with a majority of voting rights.

23

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 222 (3)

Incompatibilities with the exercise of the activity

Enforcement agents in a firm of enforcement agents cannot be appointed to conduct proceedings as individual professionals.

It is our understanding that this rule is established to prevent the existence of any conflicts of interest among different partners in the same firm.

The harm that comes from limiting the exercise of the activity in a collective practice instead of an individual practice when the enforcement agent is a partner in a firm is related to the impossibility of fully controlling the choice of their own appointments. It may limit the choice of those consumers who may wish to appoint a specific professional.

A technical study on the exercise of the profession of enforcement agent should be carried out in the short run. This technical study should assess to what extent this provision may be removed, taking into account the public interest which must include the promotion of competitive markets.

24

Law 154/2015 "Solicitors and Enforcement agents Professional Association Bylaws"

Art. 222 (5)

Partnership / Ownership of professional firms

Firms of enforcement agents cannot have other firms as partners.

It is our understanding that partnership restrictions result from concerns with maintaining professional privilege and also aim to prevent conflicts of interest between different partners. To open partnerships to people outside the profession could jeopardise the practice of professional privilege.

This provision does not allow firms of enforcement agents to have other firms as partners, including other firms of enforcement agents. This limits investment possibilities in those firms and impedes their own development into more integrated and innovative businesses, including multidisciplinary firms with an open partnership.

These restrictions may hamper competition and their removal should be considered. However, due to the specific public nature of the profession of enforcement agent, the technical study to be conducted on the exercise of this profession should also assess to what extent this provision may be removed, taking into account the public interest which should include the promotion of competitive markets.

25

Decree-Law 28/2000 "Certification of copies"

Art. 2 (1)(2)

Fixed prices

Solicitors can certify copies and may freely define the price they charge but cannot exceed the fixed price for notaries.

It is our understanding that to post prices in a clear and visible way is a requirement aimed at informing and protecting the client. It is also our understanding that not allowing prices charged by solicitors (and lawyers) to exceed the fixed price charged by notaries is also meant to protect clients from excessive prices.

We know that to set prices or to set maximum prices may hamper innovation and may facilitate price co-ordination around the maximum price. However, it is doubtful that there is much scope for innovation in the certification of copies. There remains the possibility for price co-ordination which can be serious and may go against the rationale for allowing lawyers and solicitors to also provide this type of service which until then was exclusive to notaries, namely, increasing the number and availability of providers of such services.

This legal provision should be removed.

26

Decree-Law 76-A/2006 (current version) "Simplification of certain notaries' acts"

Art. 38 (5)

Fixed prices

The amount to be charged by solicitors for the services referred to in paragraph 1 (such as certifying signatures, authenticating private documents, certifying translations of documents and certifying photocopies with original documents) may not exceed the amounts established for notaries.

It is our understanding that not allowing prices charged by lawyers, solicitors and other official entities to exceed the fixed price charged by notaries is meant to protect clients from the practice of excessive prices.

We know that to set prices or to set maximum prices may hamper innovation and may facilitate price co-ordination around the maximum price. However, it is doubtful that there is much scope for innovation in the certification of copies. There remains the possibility for price co-ordination which can be serious and may go against the rationale for allowing lawyers and solicitors to also provide this type of service which until then was exclusive to notaries, namely, increasing the number and availability of providers of such services.

This legal provision should be removed.

27

Regulation 105/2014 "Regulation of Internship for Solicitors"

Art. 8, Art. 10, Art. 11 and Art. 12

Professional internship

To qualify as a solicitor, candidates must complete an internship that can last from 12 to 18 months and includes two phases, theoretical and practical, and includes a national final exam evaluated by peers. There are exemptions from the internship or the final exam, if the candidate demonstrates professional experience over three of the last five years, and their CV is considered suitable by a committee of the professional association.

This professional internship aims to ensure that the different candidates acquire the adequate training, experience and ethical posture required to exercise the profession of solicitor, beyond the specialised knowledge they have acquired in any law school.

The existence of an internship is not questioned in itself but depending on its duration, subject matter, evaluation model and associated costs, it may be disproportionate and unnecessary to fulfil the policy objective. The horizontal framework law for professional associations (Law 2/2013) introduces limits on the organisation and duration of professional internships. Internships should not last more than 18 months , including the period for training and evaluation, if applicable. In this case, it is proportional. This evaluation made by peers may give rise to a conflict of interest that may not ensure the required independence of the evaluators and result in a lower number of candidates joining the professions. This, in turn, will have a negative impact on competition in the delivery of financial services in the market.

We recommend that the subjects that are part of the academic qualification of professional internships should not be repeated in the theoretical training offered during the internship; in addition, we recommend that the theoretical training also be conducted via e-learning. We recommend that the final evaluation of the internship should be conducted by a board, independent from the professional association, which may include members of the latter, but must include also professionals of recognised merit, such us law professors and magistrates, among others.

28

Regulation 341/2017 "Regulation of Fees, Compulsory Insurance and Collection and Exemption of Quotas"

Art. 5 and Annex I

Internship fees

The solicitor internship fees amount to EUR 969. The enforcement agent internship fees amount to EUR 1530.

The fees aim to finance the administrative costs of the services provided by the Bar Association, including the costs of internship programmes.

If internship fees are too high for candidates, that might lead to fewer candidates joining the internship process and, therefore, result in a lower number of suppliers of legal services competing in the market.

We recommend that the fees required for internship be calculated using transparent, non-discriminatory and cost-based criteria.

29

Regulation 786/2010 "Publicity and Image of solicitors and enforcementagents"

Art. 4 to Art. 14

Advertising

Limits the personal advertising that solicitors and enforcement agents can engage in.

According to stakeholders these prohibitions are necessary to ensure that a legal service is not regarded as any other commercial service devoid of a public good, and to protect potential clients from erroneous information especially when that service has the characteristics of a "credence good".

The regulatory restrictions mentioned above limit the freedom of legal professionals to advertise their own activity, which might be especially harmful for those not yet well established in the market. Advertising services to inform and potentially gain clients is crucial to promoting competition and to establishing a level playing field among professionals in the market. Advertising legal services may also lead to lower prices for legal services as it spurs competition among providers. Advertising can improve consumer information and reduce search costs leading to more competition among established firms. Restrictions on advertising increase the price of professional services, increase professionals’ incomes and reduce the entry of certain types of firms. Additionally, there is little evidence on the positive relationship between advertising restrictions and quality of the services, even though it may result in fewer consumers using the Services Directive 2006/114/EC which states that only misleading and unlawful comparative advertising can lead to distortion of competition within the internal market. The interdiction of misleading advertising is foreseen under the national legal regime. To go beyond the EU benchmark, in particular ruling out publicity of comparative contents in a generic way for specific professions, will have an adverse effect on consumer choice and no clear benefits.

Any prohibition or restriction for legal professions beyond the prohibition on misleading and unlawful comparative advertising should be removed.

30

Regulation 275/2011 "Regulation of the internship of enforcement agents"

Art. 1 to Art. 5, and Art. 8

Professional internship (enforcement agent )

The internship course is organised by the Professional Association of Solicitors and Enforcement agents. An external and independent entity is responsible for preparing, conducting and evaluating the anonymous admission examinations.

It is our understanding that the professional association regards itself as the most competent entity to organise the internship programmes.

The existence of an internship is not questioned in itself but depending on its duration, subject matter, evaluation model and associated costs, it may be disproportionate and unnecessary to fulfil the policy objective. Mandatory internship may be justified, even if constitutes a barrier to access to the profession. The horizontal framework law for professional associations (Law 2/2013) introduces limits on the organisation and duration of professional internships. Internships should not last more than 18 months , including the period for training and evaluation.

We recommend that the subjects that are part of the academic qualification of professional internships should not be repeated in the theoretical training offered during the internship; in addition, we recommend that the theoretical training also be conducted via e-learning.

31

Regulation 275/2011 "Regulation of the internship of enforcement agents"

Art. 16, Art. 20

Professional internship (enforcement agent )

This provision establishes procedural obligations to be submitted for the purpose of evaluating interns. Interns must submit proof of their intervention in 100 legal proceedings and must present a final internship report where the intern explains the activities performed during the internship.

It is our understanding that the professional association regards such interventions by the trainee as an integral part of their professional training as a future enforcement agent.

The existence of an internship as such is not questioned in itself but depending on its duration, subject matter, evaluation model and associated costs, it may be disproportionate and unnecessary to fulfil the policy objective. This provision creates a burden on interns as it may be difficult for them to find a supervisor who can guarantee their participation in the mandatory effective judicial interventions. This difficulty may delay the conclusion of the internship by the trainee and increase their opportunity costs. This may negatively affect their decision to either join an internship programme or to stick to it and conclude it during the required time frame. In which case there could be fewer enforcement agents competing in the market, as concluding the internship programme is a necessary condition for becoming a enforcement agent.

Reassess the number of 100 legal interventions required from an intern, and consider its reduction.

32

Regulation 275/2011 "Regulation of the internship of enforcement agents"

Art. 22 to Art. 26

Professional internship (enforcement agent )

There is a final evaluation made to the interns who are candidates to be enforcement agents. The final evaluation comprises the evaluation of the work performed by the trainee during the internship and is carried out by the external and independent entity designated by the Enforcement Effectiveness Committee (Comissão para a Eficácia das Execuções).

This final evaluation includes a written part and an interview (which can be regarded as an oral examination), and the submission of reports from the different activities carried out during the two internship stages. It is meant to assess the trainee's scientific and technical knowledge together with their knowledge and awareness of the professional code of ethics.

This final exam represents another entry barrier to the profession. It increases the opportunity cost and may discourage some from either finishing or even enter the internship process, with the well-known impacts on the number of professionals actively competing in the market for such services. Moreover, it is doubtful whether a final exam can test whether the trainee has indeed internalised the existing code for ethical conduct.

Eliminate the written test.

33

Regulation 202/2015 "Code of ethics"

Art. 8

Advertising

It defines the forms of legal and illegal advertising for solicitors and enforcement agents.

Some forms of advertising are not allowed. These restrictions aim to protect consumers from misleading or manipulative claims, not easily identifiable due to the asymmetry of information between professionals and clients.

The regulatory restrictions mentioned above limit the freedom of legal professionals to advertise their own activity, which might be especially harmful for those not yet well established in the market. Advertising services to inform and potentially gain clients is crucial to promote competition and to establish a level playing field among professionals in the market. Advertising legal services may also lead to lower prices for legal services as it spurs competition among providers. Advertising can improve consumer information and reduce search costs leading to more competition among established firms. Restrictions on advertising increase the price of professional services, increase professionals’ incomes and reduce the entry of certain types of firms. Additionally, there is little evidence on the positive relationship between advertising restrictions and quality of the services, even though it may result in fewer consumers using the ServiceDirective 2006/114/EC which states that only misleading and unlawful comparative advertising can lead to distortion of competition within the internal market. The interdiction of misleading advertising is foreseen under national legal regime. To go beyond the EU benchmark, in particular ruling out publicity of comparative contents in a generic way for specific professions, will have an adverse effect on consumer choice and no clear benefits.

Any prohibition or restriction for legal professions beyond the prohibition on misleading and unlawful comparative advertising should be removed.

34

Regulation 1108/2016 "Regulation of the internship of solicitors"

Art. 1 (1)

Professional internship (solicitors)

It is within the competence of the Professional Association of Solicitors and Enforcement agents to establish a model of internship for the suitable preparation of interns as future solicitors.

The conclusion of an internship programme as devised by the professional association is considered to be a requirement to become a member of the professional association. Even though Law 154/2015 does not define the policy objective of the internship programme, it is our understanding that the legislator considers that only an internship programme organised and supervised by the professional association can provide candidates with the practical and ethical training necessary to perform the professional acts in a way that safeguards the public interest.

This provision gives the professional association the exclusive right to organise and regulate the internship programme. Moreover, the evaluation of interns is carried out exclusively by peers from the professional association. As the professional association pursues both public and private interests, and there is a latent conflict between both types of interests, this exclusivity may open the possibility for the professional association to control access to the profession for reasons other than the public interest. In turn, this control may reduce the number of professionals competing in the market for legal services which may negatively impact innovativeness and diversity of such legal services, as well as the prices being charged, to the detriment of consumers.

We recommend that the internship evaluation procedures be conducted by a board, independent of the professional association, which may include members of the latter, but must also include professionals of recognised merit, such us law professors and magistrates, among others.

35

Regulation 1108/2016 "Regulation of the internship of solicitors"

Art. 1 (2), Art. 2, Art. 3

Professional internship (solicitors)

The internship has a maximum duration of 18 months. The first stage of the internship is six months long and is aimed to provide training for the intern. In this period, the intern is required to attend the training sessions. The second stage of the internship has a duration of 12 months and corresponds to integration into the profession with the supervision of a supervisor.

This professional internship aims to ensure that the different candidates acquire the adequate training, experience and ethical posture to exercise the profession of solicitor, beyond the specialised knowledge they have acquired in any law school. According to stakeholders, the internship programme for solicitors currently lasts 12 months. Law 2/2013 establishes that the creation of professional associations must be an exception and not the rule, and should only be created when they seek to protect the public interest while respecting the principle of proportionality.

Mandatory internship may be justified. A major concern stems from the fact that the internship is governed by the professional association itself, which may dispense with the participation of third parties. Hence, this participation by law faculty members, and possibly by magistrates or representatives from the Ministry of Justice, should be institutionalised.

The existence of an internship is not questioned in itself but depending on its duration, subject matter, evaluation model and associated costs, it may be disproportionate and unnecessary to fulfil the policy objective. With regard to the duration, up to 18 months, we have no recommendation. We recommend that the subjects that are part of the academic qualification of professional internships should not be repeated in the theoretical training offered during the internship; in addition, we recommend that the theoretical training also be conducted via e-learning. We recommend that the final evaluation of the internship should be conducted by a board, independent from the professional association, which may include members of the latter, but must include also professionals of recognised merit, e.g. law professors, magistrates among others.

36

Regulation 1108/2016 "Regulation of the internship of solicitors"

Art. 12

Professional internship (solicitors)

Enrolment in the professional association depends on completion of the internship and final examination. The examination is composed of a written and an oral test.

The professional internship aims to ensure that future solicitors have the adequate theoretical and practical training, experience and ethical posture to exercise their profession, beyond the specialised knowledge they have acquired in any law school. Framework law 2/2013 establishes that professional internships should only exist when justified by reasons of public interest.

This final exam represents another entry barrier to the profession. It increases the opportunity cost of trainee lawyers and may discourage some from either finishing or even entering the internship process, with the well-known impacts on the number of lawyers actively competing in the market for legal services. Moreover, it is doubtful whether a final exam can test whether the trainee has indeed internalised the existing code for ethical conduct.

We recommend that the internship evaluation procedures be conducted by a board, independent of the professional association, which may include members of the latter, but must also include professionals of recognised merit, such us law professors and magistrates, among others.

37

Regulation 1108/2016 "Regulation of the internship of solicitors"

Art. 13

Professional internship (solicitors)

Non-approval in the final examination or in the internship implies new enrolment in the internship and its full repetition. However, the possibility exists of repeating the written and oral examinations in a second phase.

We may assume that this provision attempts to protect clients from potential wrongdoing by solicitors, purportedly resulting from a lack of suitable training to perform their professional activity, thus harming the public interest.

The existence of an internship is not questioned in itself but depending on its duration, subject matter, evaluation model and associated costs, it may be disproportionate and unnecessary to fulfil the policy objective. This provision raises costs for candidates and might have a dissuading effect since the candidate has to repeat the whole internship process if he fails to successfully finish it. This extra cost might limit entry into the market.

We recommend that the subjects that are part of the academic qualification of professional internships should not be repeated in the theoretical training offered during the internship; in addition, we recommend that the theoretical training also be conducted via e-learning. We recommend that the final evaluation of the internship should be conducted by a board, independent from the professional association, which may include members of the latter, but must include also professionals of recognised merit, such us law professors and magistrates, among others. We recommend that the fees required for internship be calculated using transparent, non-discriminatory and cost-based criteria.

38

Regulation 1108/2016 "Regulation of the internship of solicitors"

Art. 17, Art. 18, Art. 19, Art. 21

Professional internship (solicitors)

The internship is organised by the bodies of the professional association.

It is our understanding that the professional association regards itself as the most competent entity to organise the internship programmes.

This provision gives the professional association the exclusive right to organise and regulate the internship programme. Moreover, the evaluation of interns is carried out exclusively by peers from the professional association. As the professional association pursues both public and private interests, and there is a latent conflict between both types of interests, this exclusivity may open the possibility for the professional association to control access to the profession for reasons other than the public interest. In turn, this control may reduce the number of professionals competing in the market for legal services which may negatively impact innovativeness and diversity of such legal services, as well as the prices being charged, to the detriment of consumers.

We recommend that the internship evaluation procedures be conducted by a board, independent of the professional association, which may include members of the latter, but must also include professionals of recognised merit, such us law professors and magistrates, among others.

39

Regulation 1108/2016 "Regulation of the internship of solicitors"

Art. 33 (5)(6)

Professional internship

Determines the fees to be paid for enrolment in the professional association, as well as other emoluments. This provision rules until the adoption of the new emoluments regulation. E. g. for enrolment in the internship programme a payment of 9. 5 Units of account (Unidades de Conta), which corresponds to EUR 969, will be required.

The fees aim to finance the administrative costs of the services provided by the professional association, including the costs associated with internship programmes.

The existence of an internship is not questioned in itself but depending on its duration, subject matter, evaluation model and associated costs, it may be disproportionate and unnecessary to fulfil the policy objective. This provision may dissuade potential entrants, restricting in this way entry into the market of new professionals.

We recommend that the fees required for internship be calculated using transparent, non-discriminatory and cost-based criteria.

40

Ordinance 9/2013 "Regulation of eviction proceedings"

Art. 22 (2) (b)

Geographical barrier

In the application for eviction, the appointment of the enforcement agent depends on the enforcement agent having a professional address in the municipality where the property to be vacated is located, or in the contiguous municipalities.

The petitioner can designate either a notary or a enforcement agent to conduct eviction proceedings. It is our understanding that the designation of a enforcement agent (or notary) aims to provide legal certainty and legitimacy to those professionals endowed with the power to conduct eviction proceedings. The geographical restrictions are related to the territorial competence of the courts for the judicial claims, which for reasons related to the proceedings and the proximity of those intervening in the property, must ensure that the enforcement agent is physically close to the location of the eviction.

One may ask why there is a need to designate a notary (or enforcement agent) to carry out the eviction proceedings. In England and in Wales, standard possession orders can be filled online, as in Portugal, if certain conditions are met. There is no need to appoint a notary or a enforcement agent to conduct eviction processes. The petitioner simply has to fill in, either in paper or online, a standard re-possession claim form and e-mail it or post it to the court that deals with housing re-possession. The costs involved are met by the petitioner. Only when tenants do not leave the property by the date given in an order for re-possession can there be need to obtain a warrant of re-possession from the court to arrange for a enforcement agent to evict them. In fact, territorial delimitations hamper competition. The limitation on the choice of enforcement agent to deliver services in the eviction proceeding restricts consumer choices. The applicant for the eviction is prevented from freely choosing a enforcement agent, who, for reasons of better service quality, speed, or other factors of competitiveness, could be preferred even if the enforcement agent does not live in the designated location.

A technical study on the exercise of the profession of enforcement agent should be carried out in the short run. This technical study should assess the geographical restrictions established by this legal provision. This assessment must include a competitive assessment exercise, as the appointment of a enforcement agent to be dependent on having a professional address in the municipality of the property to vacate or in the confined municipalities hampers competition.

41

Ordinance 282/2013 (as amended by Ordinance 349/2015) "Regulation of executive proceedings"

Art. 50, Art. 51, Art. 52

Professional fees

It fixes the professional fees charged by enforcement agents for acts performed by them within the executive proceedings, and the forms and terms of payments. It also determines the amounts of professional expenses to be reimbursed to the professionals.

Fixed prices in those legal services were justified on public interest grounds. It was argued by the legislator that they guaranteed universal access to these services by all users and that price control would protect the quality of services as it could possibly decrease if prices were as a result of competition between enforcement agents. According to the recital of Ordinance 282/2013, the adoption of a fixed tariff system aims to encourage healthy competition between enforcement agents, based on the quality of the service provided and not on different amounts to be charged, on a case-by-case basis, agreed between the enforcement agent and the applicant of the proceedings (client).

Fixed prices can have negative economic impacts. Fixed prices may discourage innovation and the provision of greater diversity of services and may hamper competition through prices. Moreover, maximum prices can induce price collusion, even if tacit, around their values, as they play the role of a strategic focal point, which is certainly damaging to consumer welfare.

A technical study on the exercise of the profession of enforcement agent should be carried out in the short run, as mentioned above. This technical study should assess the whole pricing system as presently defined for the acts performed by enforcement agents. This assessment must include a competitive assessment exercise, as the application of price controls raises serious competitive concerns.

42

Ordinance 282/2013 (as amended by Ordinance 349/2015) "Regulation of executive proceedings"

Annex VI, Annex VII, Annex VIII

Professional fees

Tables with fixed fees and the value of expenses to be charged by enforcement agents to their clients, which pay for the professional acts performed in executive proceedings.

Fixed prices in those legal services were justified on public interest grounds. It was argued by the legislator that they guaranteed universal access to these services by all users and that price control would protect the quality of services as it could possibly decrease if prices were as a result of competition between enforcement agents. According to the recital of Ordinance 282/2013, the adoption of a fixed tariff system aims to encourage healthy competition between enforcement agents, based on the quality of the service provided and not on different amounts to be charged, on a case-by-case basis, agreed between the enforcement agent and the applicant of the proceedings (client).

Fixed prices can have negative economic impacts. Fixed prices may discourage innovation and the provision of greater diversity of services and may hamper competition through prices. Moreover, maximum prices can induce price collusion, even if tacit, around their values, as they play the role of a strategic focal point, which is certainly damaging to consumer welfare.

A technical study on the exercise of the profession of enforcement agent should be carried out in the short run, as mentioned above. This technical study should assess the whole pricing system as presently defined for the acts performed by enforcement agents. This assessment must include a competitive assessment exercise, as the application of price controls raises serious competitive concerns.

43

Notice 5523-A/2016 "To create rules of distribution of procedures for enforcement agents"

All

Awarding procedure for enforcement agents

Announcement of the creation of rules for the distribution of procedures for the enforcement agents, including their maximum number.

This provision intends to promote the allocation of judicial procedures among enforcement agents in a balanced and equitable way. The aim is to prevent unmanageable concentrations of procedures in a few enforcement agents that would delay the speedy administration of justice, which constitutes a public good.

This provision may result in unreasonable interference with the way each enforcement agent is able to manage their workload and freedom to take in judicial procedures when attempting to compete with other enforcement agents operating in the market. In this way, competition will be hampered, and enforcement agents may have lower incentives to offer services with greater diversity, higher quality and greater innovation.

A technical study on the exercise of the profession of enforcement agent should be carried out. This technical study should assess the public interest to which this provision may answer to, where the public interest must include the promotion of competition.

44

Notice 7530-A/2016 "Rules for setting the maximum number of cases for enforcement officers or companies"

All

Awarding procedure for enforcement agents

Limits the maximum number of procedures for enforcement agents.

This provision intends to promote the allocation of judicial procedures among enforcement agents in a balanced and equitable way. The aim is to prevent unmanageable concentrations of procedures in a few enforcement agents that would delay the speedy administration of justice, which constitutes a public good.

This provision may result in unreasonable interference with the way each enforcement agent is able to manage their workload and freedom to take in judicial procedures when attempting to compete with other enforcement agents operating in the market. In this way, competition will be hampered, and enforcement agents may have lower incentives to offer services with greater diversity, higher quality and greater innovation.

A technical study on the exercise of the profession of enforcement agent should be carried out. This technical study should assess the public interest to which this provision may answer to, where the public interest must include the promotion of competition.

Notaries

No

No and title of Regulation

Article

Thematic Category

Brief description of the potential obstacle

Policy objective

Harm to competition

Recommendations

1

Law 23/2013 "Legal framework of the inventory process"

Art. 3(1)(2)(3) - Annex

Geographical barrier/ Reserved activities

The legal competence for the inventory process belongs to the notary's office located in the municipality where the opening of the succession/inheritance are located. If the notary has some impediment, another notary from the same municipality is legally competent to carry out the process. If there is no notary in this municipality, any office from a contiguous municipality is legally competent.

According to stakeholders, this criterion promotes not only procedural speed, but also protects economically disadvantaged parties from the possible relocation of the process in a notary's office too far from the centre of succession interests. The inventory process has been an attribution of notaries since 2009, following recommendations by the troika in the MoU related to the need to use out-of-court solutions for inheritance-succession processes. According to the recital of law proposal 105/XII recital (approved as Law 23/2013), this provision aimed to avoid an inventory process taking place in a municipality not connected with the deceased or his heirs. The rationale is equivalent to the one applicable to court jurisdictions, which follow a reasoning of territorial division. Lawsuits related to the division of assets must generally occur in the court that has jurisdiction over the location of the assets. In fact, there is a parallel with these rules of territorial competence with those related to the courts. The location for the opening of the inheritance process is determined by the Civil Code, and is defined as the last place where the person whose estate is being administered was residing (Art. 2031).

Restrictions on territorial competence exclude notaries located outside the municipality in question from the delivery of those services. In fact, this provision establishes a situation akin to exclusive territories or market segmentation in competition law (see vertical restraints literature). Such exclusions will hamper competition in the market for notarial services. Moreover, from the point of view of the demand, consumers of such services (the interested parties in the succession processes) do not have the power to freely choose the notary. Consumers cannot take in consideration the quality, innovation or other selective factors in their decision on the location of the notary's office, unless there is more than one office in such location (but in such case, the choice would be restricted to those as well).

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. The legislator should consider to apply the general principle of free choice of the notarial office also to these cases. In absence of such choice the notarial office identified in the provision would be competent.

2

Law 23/2013 "Legal framework of the inventory process"

Art. 3(5)(a)(b)

Geographical barrier/ Reserved activities

In case of a succession/inheritance process opened outside Portugal, the competence to carry it out lies with a notary whose notarial office is located in the municipality where the real estate, or the major part of it, is located. In the absence of real estate, it falls to the competence of the notary from the municipality where most of the movable assets are located. If there are no assets in Portugal, the competent notary is located in same the municipality where the inheritance beneficiary's place of residence is located.

According to stakeholders, this criterion promotes not only procedural speed, but also protects economically disadvantaged parties from the possible relocation of the process in a notary's office too far from the centre of succession interests. The inventory process has been an attribution of notaries since 2009, following recommendations by the troika in the MoU related to the need to use out-of-court solutions for inheritance-succession processes. According to the recital of law proposal 105/XII recital (approved as Law 23/2013), this provision aimed to avoid an inventory process taking place in a municipality not connected with the deceased or his heirs. The rationale is equivalent to the one applicable to court jurisdictions, which follow a reasoning of territorial division. Lawsuits related to the division of assets must generally occur in the court that has jurisdiction over the location of the assets. In fact, there is a parallel with these rules of territorial competence with those related to the courts. The location for the opening of the inheritance process is determined by the Civil Code, and is defined as the last place where the person whose estate is being administered was residing (Art. 2031).

Restrictions of territorial competence exclude notaries located outside the municipality in question from the delivery of those services. In fact, this provision establishes a situation akin to exclusive territories in competition law (see vertical restraints literature). Such exclusions will hamper competition in the market for notarial services. Moreover, from the point of view of the demand, consumers of such services (the interested parties in the succession processes) do not have the power to freely choose the notary. Consumers cannot take into consideration the quality, innovation or other selective factors in their decision of the location of the notary's office, unless there is more than one office in such a location (but in such case, the choice would be restricted to those as well). In this case, we can say that notaries within the same municipality compete with each other, in the first place, so the relevant geographic market is the municipality.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. The legislator should consider to apply the general principle of free choice of the notarial office also to these cases. In absence of such choice the notarial office identified in the provision would be competent.

3

Law 23/2013 "Legal framework of the inventory process"

Art. 3(6)

Geographical barrier/ Reserved activities

In the case of an inventory process resulting from a separation, divorce, declaration of nullity or annulment of marriage, the legally competent notary is located in the municipality where the family residence is located, or in the absence thereof, the rule in paragraph 5 (a) of Art. 3 applies. This is, the legally competent notary will be located in the municipality where the real estate, or the major part of it, is located, or in the absence of any real estate, the municipality where most of the movable assets are located. In case of a succession/inheritance case outside Portugal, the legally competent notary must be located in the municipality where the real estate or most of it is located or, in the absence of any real estate, the municipality where most of the movable assets are located.

According to stakeholders, this criterion promotes not only procedural speed, but also protects economically disadvantaged parties from the possible relocation of the process in a notary's office too far from the centre of succession interests. The inventory process has been an attribution of notaries since 2009, following recommendations by the troika in the MoU related to the need to use out-of-court solutions for inheritance-succession processes. According to the recital of law proposal 105/XII recital (approved as Law 23/2013), this provision aimed to avoid an inventory process taking place in a municipality not connected with the deceased or his heirs. The rationale is equivalent to the one applicable to court jurisdictions, which follow a reasoning of territorial division. Lawsuits related to the division of assets must generally occur in the court that has jurisdiction over the location of the assets. In fact, there is a parallel with these rules of territorial competence with those related to the courts. The location for the opening of the inheritance process is determined by the Civil Code, and is defined as the last place where the person whose estate is being administered was residing (Art. 2031).

Restrictions of territorial competence exclude notaries located outside the municipality in question from the delivery of those services. In fact, this provision establishes a situation akin to exclusive territories in competition law (see vertical restraints literature). Such exclusions will hamper competition in the market for notarial services. Moreover, from the point of view of the demand, consumers of such services (the interested parties in the succession processes) do not have the power to freely choose the notary. Consumers cannot take into consideration the quality, innovation or other selective factors in their decision of the location of the notary's office, unless there is more than one office in such a location (but in such case, the choice would be restricted to those as well). In this case, we can say that notaries within the same municipality compete with each other, in the first place, so the relevant geographic market is the municipality.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. The legislator should consider to apply the general principle of free choice of the notarial office also to these cases. In absence of such choice the notarial office identified in the provision would be competent.

4

Law 23/2013 "Legal framework of the inventory process"

Art. 83(2)

Professional fees / Inventory process

The government regulates the professional fees due to a notary for the inventory process, the payment scheme and the responsibility for payment.

According to stakeholders, the regulation of fixed prices related to the inventory process, such as in a judicial separation process, might be justified on exceptional public interest grounds to guarantee economic access to inventory processes equally by all people. The existence of maximum prices in exclusive notarial activities intends to guarantee universal access to these services independently of the clients’ income level. Notary services exhibit characteristics of public goods, which can lead to positive externalities. Because public goods tend to be under-produced, the state usually establishes regulation on the provision of such services. Additionally, it is claimed that price control guarantees a notary's impartiality and independence in the provision of a public service, as they wouldn't have to negotiate prices with their clients.

Maximum and fixed price regimes limit the incentives to compete and innovate. Even though maximum price regimes allow for price competition, they often serve as a focus point to co-ordinate prices. In a competitive market, prices tend to reflect more closely the costs of the services provided, and do not necessarily jeopardise the quality of those services. In its Recommendation 1/2007, the AdC proposed the adoption of a system of maximum prices during a transitional period for services which remain within the exclusive competence of notaries and whose social relevance justified the need to guarantee universal access. This regime would be phased out as the quantitative restrictions imposed by the quota system were phased out. Other alternatives, rather than fixing maximum prices, may be adopted to overcome any lack of information from the demand side, such as the publication of historical or survey-based price information by independent parties, e. g. consumer associations. This would improve transparency and allow greater competition in prices. The same principle applies when the regulator opts for establishing maximum prices, based on the attempt to avoid excessive prices charged to consumers, in particular when the regulator wants to guarantee universal access to notarial services.

The maximum prices regime should be revisited, with the aim to gradually phase them out as appropriate.

5

Law 155/2015 "Professional Association of Notaries Bylaws"

Annex I, Art. 3

Self-regulatory regime

This provision describes the attributions and competences given to the public professional association, guaranteeing it the power to control access to and the exercise of the profession, the elaboration and implementation of technical rules and ethical principles and the exercise of disciplinary powers.

It is our understanding that this provision aims to ensure the exercise of the regulatory function, including the disciplinary function and the representative function, taking into account the interests of users of the professional services, by one and the same single entity, the professional association. In the Portuguese Constitution the autonomy and administrative decentralisation to the professional associations is recognised to ensure the defence of the public interest and the fundamental rights of citizens, and also to guarantee the self-regulation of the professions that require technical independence. This regulatory model is based on the public interest of these professions, through the designation of state powers to those entities and with two main characteristics: the exclusivity on granting the professional title and the obligation of being registered within the professional association to practice the profession, which qualifies the nature of the regulation as being mandatory and unitary.

The harm to competition arising from the regulatory model, already established by the horizontal framework Law 2/2013 and considered into the bylaws of the professional association, stems from the centralisation in a single entity of the powers to regulate and represent the profession. Because each professional association, apart from representing the profession, controls access to it and its exercise, the regulations issued may create disproportional and anti-competitive restrictions. The freedom to choose and exercise a profession is a fundamental right of the citizen. Also, the freedom of movement of workers and the free establishment to provide services are fundamental principles of the EU internal market. Restrictions to these principles, in the pursuit of the public interest, must be well justified and proportional. When a professional association acquires full responsibility to regulate access to the profession and the conduct of its members, this may have an anti-competitive impact. In fact, professional associations may adopt rules that reduce incentives or opportunities for stronger competition between operators, such as restrictions on advertising and partnerships/ownerships, managements or multidisciplinary activities, or restrictions when setting the minimum qualifications to enter the profession, amongst others. As the governing bodies of public professional associations are exclusively composed of their members, there is a risk that their members' interests will not coincide with the public interest. This is one significant reason for including within at least some governing bodies of a professional association, lay people representing the interests of relevant social groups, such as consumer associations, other professionals, and high-profile people with experience in regulatory issues.

We recommend that the regulatory function should be separated from the representative function for self-regulated professional associations, either through the creation of an over-arching supervisory body by sector or trade, or through the creation of a supervisory body inside the current professional orders with the necessary "Chinese walls". The supervisory body takes on the main regulation of the profession such as access to the profession and similar functions. The board of the regulatory body will include not only representative of the profession but also lay people, including high-profile experienced individuals from other regulators, representatives of consumer organisations and academia.

6

Law 155/2015 "Professional Association of Notaries Bylaws"

Annex I, Art. 47 to Art. 50

Compensation fund

It defines the regime of the Compensation Fund for notaries. This Compensation Fund, managed by a financial institute, constitutes an autonomous patrimony whose purpose is to ensure the financial sustainability (on a quarterly basis) of all notaries across the country, where such sustainability means earning gross revenues above a minimum defined every year by the Professional Association of Notaries. The funds needed for such quarterly "revenue rebalancing" come from several sources, such as the mandatory fees paid by all association members for this purpose, the equivalent to 1% of their monthly gross revenue/income. To be a recipient of such financial help, a notary has to fulfil certain criteria.

The Compensation Fund aims to ensure the financial sustainability of all notaries across the country. To be eligible for such financial aid, notaries must meet certain criteria for what can be classified as a subsidy to guarantee a minimum professional income. It targets those notarial offices that provide services in sparsely populated and less economically interesting areas, in order to compensate such notaries. The fund is financed by the notaries.

This income redistribution mechanism limits the risk inherent to the economic activity and does not stimulate the right type of investment and service innovation that can lower costs and raise revenues, notwithstanding what is established in Art. 54 of the Professional Association of Notaries' bylaws. In the end, this income redistribution regime is akin to a minimum salary, which is not compatible with a liberal profession. The solution provided by this regime does not take into consideration other factors that can possibly justify the inefficiency of the notary, such as the lack of optimisation or management of existing resources. If the geographical restrictions and also the restrictions related to the number of licences each notary can have are abolished or reformed, the need of rebalance may be diminished. However, this is not a clear consequence. In fact, if the system of quotas were to be abolished, the need for notaries in less attractive locations could force the state to compensate such notaries. The current regime of the Compensation Fund is financed by the notaries and not by the state itself. Also, it is important to mention that both technology innovation and the progressive decrease of reserved acts of notaries are reasons to decrease the need for the physical presence of the notary. Also, for economically disadvantaged geographical areas other solutions may be more proportional, such as a different tender for licensing, as said, with a compensation from the state to the notaries in those locations, if necessary.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas or the need to obtain a notarial office licence before establishing oneself as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real-estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism areas, highly industrialised areas) and fully liberalise the establishment of notarial offices there; ii. In low-density areas, allow for open competition for the establishment of one or two offices per area (or whichever density is determined by the study). 3. Revisit the existing compensation fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practiced by both lawyers and solicitors who may also practice in those areas.

7

Law 155/2015 "Professional Association of Notaries Bylaws"

Annex I Art. 51

Compensation fund

There is an obligation to communicate monthly to the Professional Association of Notaries the amount of professional fees billed from the previous month. This rule is integrated within the regime of the Compensation Fund, established in Art. 47 of this bylaw.

This obligation is a condition for implementing the Compensation Fund regime. Otherwise, the professional association would not have the information required to calculate the percentage for the mandatory fee referred to in Art. 50, nor the information needed to identify the notarial offices eligible for financial compensation. The professional association has guaranteed that such information remains confidential and protected.

Sharing information about fees and prices is not anti-competitive per se. However, if misused in an environment where there is competition between notaries or between notaries and other legal professionals offering the same type of services, sharing this information could potentially lead to undesirable outcomes with a negative impact on consumer welfare. Regulations that require market participants to share information on output levels can significantly assist in the formation of cartels, since a key requirement for cartel operation is that participants in the cartel can effectively monitor their competitors’ market behaviour. Cartels are more likely to arise where there are fewer participants in the market, where entry barriers are high, where suppliers’ products are relatively homogeneous and where information about price or output changes is available either before or soon after the price or output changes.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas or the need to obtain a notarial office licence before establishing oneself as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real-estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism areas, highly industrialised areas) and fully liberalise the establishment of notarial offices there; ii. In low-density areas, allow for open competition for the establishment of one or two offices per area (or whichever density is determined by the study). 3. Revisit the existing compensation fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practiced by both lawyers and solicitors who may also practice in those areas.

8

Law 155/2015 "Professional Association of Notaries Bylaws"

Annex I Art. 52 and Art. 53

Compensation fund

These provisions define the criteria for notaries to be compensated under the Compensation Fund regime (defined in Art. 47), including the conditions for the payment of a subsidy to those notaries who have a quarterly income lower than the value defined every year by the General Assembly of the Professional Association of Notaries.

The Compensation Fund aims to ensure the financial sustainability of all notaries across the country. To be eligible for such financial aid, notaries must meet certain criteria for what can be classified as a subsidy to guarantee a minimum professional income. It targets those notarial offices that provide services in sparsely populated and less economically interesting areas, in order to compensate such notaries.

This income redistribution mechanism limits the risk inherent to the economic activity and does not stimulate the right type of investment and service innovation that can lower costs and raise revenues, notwithstanding what is established in Art. 54 of the Professional Association of Notaries' bylaws. In the end, this income redistribution regime is akin to a minimum salary, which is not compatible with a liberal profession. The solution provided by this regime does not take into consideration other factors that can possibly justify the inefficiency of the notary, such as a lack of optimisation or poor management of existing resources. If the geographical restrictions and also the restrictions related to the number of licences each notary can have are abolished or reformed, the need for rebalance may be diminished. However, this is not a clear consequence. In fact, if the system of quotas were abolished, the need for notaries in less attractive locations could force the state to compensate such notaries. The current regime of the Compensation Fund is financed by the notaries and not by the state itself. Also, it is important to mention that both technology innovation and the progressive decrease of reserved acts of notaries are reasons to decrease the need for the physical presence of the notary. Also, for economically disadvantaged geographical areas other solutions may be more proportional, such as a different tender for licensing, as said, with a compensation from the state for the notaries in those locations, if necessary. Only notarial offices exercising their activity in municipalities/counties endowed with a single notarial licence are eligible to benefit from the Compensation Fund. In this sense, they do not compete with any other notarial office.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas or the need to obtain a notarial office licence before establishing oneself as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real-estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism areas, highly industrialised areas) and fully liberalise the establishment of notarial offices there; ii. In low-density areas, allow for open competition for the establishment of one or two offices per area (or whichever density is determined by the study). 3. Revisit the existing compensation fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practiced by both lawyers and solicitors who may also practice in those areas.

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Law 155/2015 "Professional Association of Notaries Bylaws"

Annex I Art. 54

Compensation fund

The Professional Association of Notaries evaluates the performance of the notaries' offices that benefit from the compensation fund, to determine whether the responsible notaries fulfil the required professional quality standards and exercise enough effort and diligence in their activity. The Professional Association of Notaries will impose sanctions on notaries who do not meet the standard set up by the evaluation system.

This provision constitutes an attempt not only to enforce quality standards but also to mitigate the moral hazard that may result from the existence and implementation of the Compensation Fund regime.

The notaries subject to evaluation by the professional association will have to disclose sensitive and confidential information. If this information is not well protected, its contents may be disclosed to other professionals, even if inadvertently, and could eventually facilitate anti-trust practices. Because the entity responsible for the management of the Compensation Fund is the Professional Association of Notaries, this means that competitors (at least, those responsible for such management) have access to the information related to the incomes and the prices charged by other notaries (note that prices are not fixed).

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas or the need to obtain a notarial office licence before establishing oneself as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real-estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism areas, highly industrialised areas) and fully liberalise the establishment of notarial offices there; ii. In low-density areas, allow for open competition for the establishment of one or two offices per area (or whichever density is determined by the study). 3. Revisit the existing compensation fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practiced by both lawyers and solicitors who may also practice in those areas.

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Law 155/2015 "Professional Association of Notaries Bylaws"

Annex I Art. 69(2)(a)

Title / Registration and licensing

To exercise its activity the notary, as described in the Decree-law 26/2004, Art. 31: "The title of "Notary" is obtained through a public candidacy process, announced by the Ministry of Justice in the Official Journal, and after consultation with the professional association, must be registered with the Professional Association of Notaries. Only interns who have successfully concluded their internship can be candidates".

The tender process ensures that only qualified professionals will access the professional title through a licensing scheme. This aims to protect the professional title, considering the public functions of notaries. Consumers are, therefore, informed that the professionals are certified to provide such services. In this case, the professional association acts as a public entity empowered by the State to perform this function.

This procedure constitutes a mandatory additional burden on professionals who wish to access the notarial profession. It constitutes an extra opportunity cost that may dissuade some professionals from becoming notaries and compete in the market as such. This public candidacy procedure is part of the existing licensing regime for the attribution of the title of notary and the attribution of notarial offices. It is part of a system of quotas and geographical segmentation of notarial services, addressed by the Portuguese Competition Authority's Recommendation 1/2007. As such, it may hamper competition in the market for notarial services, with negative impacts on consumer welfare (households and firms, in particular SMEs). This does not seem generically implemented in other EU Member States. Such a public candidacy process could be considered proportional if there were no restrictions on the number of professional titles to be given, either formally or informally. However, and according to stakeholders, the limit of licences to operate notarial offices as defined in the notarial map (approved by this Decree-Law 26/2004) indirectly restricts the number of professional titles attributed in this public candidacy procedure. Moreover, the public candidacy procedure may allow for a control of the number of licensed notaries, as its timing is controlled by the Ministry of Justice. Overall, the current centralised/quota system to grant the professional title and licences to operate notarial offices restricts competition by restricting the number of notaries able to compete in the market and by segmenting the market. This leads to less diversity and innovation in the services being provided, in particular when these services are still exclusive to notaries, and may prevent the practice of lower prices for the different services that are not under a fixed price regime.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas or the need to obtain a notarial office licence before establishing oneself as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real-estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism areas, highly industrialised areas) and fully liberalise the establishment of notarial offices there; ii. In low-density areas, allow for open competition for the establishment of one or two offices per area (or whichever density is determined by the study). 3. Revisit the existing compensation fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practiced by both lawyers and solicitors who may also practice in those areas.

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Law 155/2015 "Professional Association of Notaries Bylaws"

Annex I Art. 72

Incompatibilities with the exercise of the activity

The exercise of the profession by a notary holding a license to operate a notarial office is incompatible with any other paid activity, public or private, with the exception of teaching activities, participation in conferences, seminars and copyrights.

The recital states that the exclusivity of the profession is related to the required high standards of technical competence, together with the need to ensure impartiality and independence of a notary in relation to the parties. This rule is intended to protect the client from possible conflicts of interest. It protects the public interest.

It prevents professionals from providing notarial services if they are already engaged in other activities or if they intend to be. Some professionals may exclude themselves from competing in the market for notarial services due to such incompatibilities, as the notarial practice may imply significant opportunity costs from foregoing paid activities.

"We recommend that this rule should be abolished. The legislator must consider the introduction of the principle of compatibility of the profession of notaries with other paid activities, public or private, unless there is clear and explicit conflict of interest with the practice of notarial acts. The law must then expressly indicate the activities or functions considered as incompatible with the activity of notaries. "

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Law 155/2015 "Professional Association of Notaries Bylaws"

Annex I Art. 73(1)(2)

Incompatibilities with the exercise of the activity

The exercise of the profession by notaries on the waiting list (Bolsa de Notários) or by interns is not compatible with any other paid public activity. The exercise of other private paid activity by notaries on the waiting list and by interns may be authorised by the Professional Association of Notaries. This authorisation will be granted pending an evaluation which will take into account the objectives of the notarial activity.

This rule is intended to protect the client from possible conflicts of interest. It protects the public interest. The recital of Decree-Law 26/2004 states that the exclusivity of the profession is related to the required high standards of technical competence, together with the need to ensure impartiality and independence of a notary in relation to the parties.

It prevents operators to provide notary services if they are already engaged in some other activities or if they intend to be. This rule is too inflexible. Potential operators may be excluded, or may exclude themselves, from the market due to such incompatibilities.

"We recommend that this rule should be abolished. The legislator must consider the introduction of the principle of compatibility of the profession of notaries with other paid activities, public or private, unless there is clear and explicit conflict of interest with the practice of notarial acts. The law must then expressly indicate the activities or functions considered as incompatible with the activity of notaries. "

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Law 155/2015 "Professional Association of Notaries Bylaws"

Annex I Art. 82

Advertising

This provision limits advertising of the activity to specific forms of advertising, which is objective advertising. Para. 5 names cases of illegal acts of advertising. These are, in particular, unlawful acts of publicity: (a) placement of persuasive, ideological, self-aggrandizing and comparative content; (b) mention of the quality of the notary's office; (c) provision of erroneous or misleading information; (d) the promise or induction of the production of results; (e) the use of unsolicited direct publicity; (f) reference to the value of services, gratuities or forms of payment.

These restrictions aim to protect consumers against misleading or manipulative claims from notaries, due to the asymmetry of information between practitioners and consumers and can create moral hazard.

The regulatory restrictions limit the freedom of professionals to advertise their own activity, which might be especially harmful for those not yet well established in the market. Advertising services to inform and potentially gain clients is crucial to promote competition and to establish a level playing field among professionals in the market. Advertising legal services may also lead to lower prices for legal services as it spurs competition among providers. Advertising can improve consumer information and reduce search costs leading to more competition among established firms. Nelson (1970; 1974) Grossman and Shapiro (1984) and Stahl (1994) suggest that advertising can have pro-competitive effects to facilitate entry. Following OECD (2007), there are no well-founded arguments against permitting advertising that is truthful. Furthermore, studies have found that restrictions on advertising lead to higher prices (OECD, 2007). In 2007, the Canadian Competition Bureau (CCB) stated that there is empirical evidence of the effect of advertising restrictions on the price and quality of professional services (including accountants, lawyers, optometrists, pharmacists and real estate agents). Restrictions on advertising increase the price of professional services, increase professionals’ incomes and reduce the entry of certain types of firms. Additionally, there is little evidence of the positive relationship between advertising restrictions and quality of services, even though it may result in fewer consumers using the service. Directive 2006/114/EC states that only misleading and unlawful comparative advertising can lead to distortion of competition within the internal market. The interdiction of misleading advertising is foreseen under national legal regimes. To go beyond the EU benchmark, in particular ruling out publicity of comparative contents in a generic way for specific professions, will have an adverse effect on consumer choice and no clear benefits.

Any prohibition or restriction to legal professions beyond the prohibition on misleading and unlawful comparative advertising (already covered in other legal texts) should be removed.

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Law 155/2015 "Professional Association of Notaries Bylaws"

Annex I Art. 85

Registration and licensing

Notarial firms must register as members of the professional association, enjoying the rights and subject to the duties, and in particular to the ethical principles and rules set forth in this bylaw for notaries.

According to some stakeholders and to some literature on this subject, such restrictions aim to guarantee professional independence, autonomy, adherence to professional ethical rules and the pursuit of the public interest (e. g. , the proper administration of justice). According to them, opening the partnership to people outside the profession could: (a) threaten the autonomy and independence of legal professionals; (b) threaten lawyer-client privilege; (c) give rise to conflicts of interest between the different partners within a same legal firm that would risk the pursuit of the social goal binding the legal professional firm, because non-professional partners would not be bound by the same professional obligations, as they are not members of the professional association.

Framework Law 2/2013 only requires that one of the managers or administrators of a professional firm be a member of the professional association. To open up a professional firm to external ownership means to open the firm to more investment, by allowing access to a wider pool of capital. External ownership, partial or total, means capital ownership by non-professionals, ownership of voting rights, or both. Ultimately, all these restrictions on ownership, shareholding and partnership over professional firms, are detrimental to firms across the entire economy, especially SMEs, and households, as their relaxation can be expected to lead to an increase in their welfare. Professional firms of notaries follow the “professional partnership” model, enforced by a “prescriptive regulation model” under which (i) only professionals regulated by the same professional association can own the firm – i. e. , professional partners own 100% of the sharing capital or all the voting rights – and where (ii) the professional firm places the pursuit of the public interest above commercial interests. These professional partners can be individual professionals, professional firms or associative organisation of professionals established in other EU/EEA Member States. The professional partnership model is the only model allowed for the legal professions. Non-professionals can only work as employees (or as consultants) of the professional firm, and are barred from participating in the relevant decision-making processes.

We recommend that the ownership and partnership of all professional firms be opened to other professionals and non-professionals, that is, open to individuals outside the profession. We also recommend that other professionals and non-professionals be allowed to hold a majority of a professional firm’s social capital, together with a majority of voting rights. The number of partners in a notarial firm should be opened to notaries without a licence, and not limited to any maximum number.

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Law 155/2015 "Professional Association of Notaries Bylaws"

Annex I Art. 87 (1) and Annex II Art. 5(3)

Partnership/ownership of professional firms

The partners of a notary's professional firm should all be notaries, and each firm has the maximum limit of three partners.

According to some stakeholders and to some literature on this subject, such restrictions aim to guarantee professional independence, autonomy, adherence to professional ethical rules and the pursuit of the public interest (e. g. , the proper administration of justice). According to them, opening the partnership to people outside the profession could: (a) threaten the autonomy and independence of legal professionals; (b) threaten lawyer-client privilege; (c) give rise to conflicts of interest between the different partners within a same legal firm that would risk the pursuit of the social goal binding the legal professional firm, because non-professional partners would not be bound by the same professional obligations, as they are not members of the professional association.

Professional firms of notaries follow the “professional partnership” model, enforced by a “prescriptive regulation model” under which (i) only professionals regulated by the same professional association can own the firm – i. e. , professional partners own 100% of the sharing capital or all the voting rights – and where (ii) the professional firm places the pursuit of the public interest above commercial interests. These professional partners can be individual professionals, professional firms or associative organisation of professionals established in other EU/EEA Member States. The professional partnership model is the only model allowed for the legal professions. Non-professionals can only work as employees (or as consultants) of the professional firm, and are barred from participating in the relevant decision-making processes. Professional firms of notaries are subject to additional restrictions. A notary without a notarial office licence cannot be a partner in a firm. This restriction bars all notaries on the waiting list for a notarial office licence, 44 notaries in total at the last count, from becoming partners in a professional firm. Each firm cannot have more than three partners, and all partners have to hold licences in the same municipality. This is even more relevant as the number of municipalities with only one licence represents around 70% of all notarial licences. These restrictions clearly limit the creation of professional firms of notaries and might explain why there are so few of them (there are currently only two professional firms of notaries, and one of them is a sole proprietor firm). If these restrictions aim to respond to concerns about market power, they would be better dealt with through competition law. To open up a professional firm of notaries to external ownership means to open the firm up to more investment, by allowing access to a wider pool of capital. External ownership, partial or total, means capital ownership by non-professionals, ownership of voting rights, or both. This opening will enable professional firms to satisfy a greater pool of consumers and reap the benefits of a larger scale of operations. For younger professionals, not yet well established in their profession, it would also mean more opportunities to set up their own professional firm and compete in the market. This will generate a greater ability by professional firms of notaries to compete in the single market and internationally. It would also improve risk management among the owners of a professional firm, hence, lowering operational costs and possibly lowering prices charged to consumers for the different notarial services being delivered in the market. Overall, the removal of ownership/partnership restrictions will ultimately lead to an increase in the welfare of consumers of notarial services, be them households or firms, in particular SMEs.

We recommend that the ownership and partnership of all professional firms be opened to other professionals and non-professionals, that is, open to individuals outside the profession. We also recommend that other professionals and non-professionals be allowed to hold a majority of a professional firm’s social capital, together with a majority of voting rights. The number of partners in a notarial firm should be opened to notaries without a licence, and not limited to any maximum number.

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Law 155/2015 "Professional Association of Notaries Bylaws"

Annex I Art. 87(2)

Partnership/ownership of professional firms

Only those notaries who have a licence to install a notary's office in the same municipality can form a partnership to install a notarial firm.

This territorial restriction for notaries aims to ensure the availability of notarial services across the national territory.

This constitutes a partnership restriction that limits competition. It limits the freedom to create new professional firms of notaries from different municipalities. The territorial restriction precludes notaries who run notarial offices in different municipalities to form professional partnerships and install a notarial firm. And it also excludes third parties, who are not notaries, to become partners in a professional notarial firm. These limitations restrict the number of professional firms that can be formed, restrict investment opportunities, limit cost saving strategies (which are not limited to savings in physical infrastructures), restrict opportunities for risk pooling and better risk management, and for the exploration of economies of scale and scope, which could lead to lower prices, more diversity and service quality, and greater innovation, to the benefit of consumers of notarial services. Moreover, there are currently 374 notaries with a licence to operate (to open an office), and 44 on the waiting list. The latter are not able to be partners of a notarial firm, which may limit the offer of notarial services and possibly new investment in notarial professional firms.

We recommend that the ownership and partnership of professional notarial firms be opened to other professionals and non-professionals. This means removing the geographic restriction on partnerships between notaries, and allowing third parties (parties outside the profession) to become partners in notarial firms. This means that partnerships in a notarial firm should be opened to notaries with notarial office licenses based in different municipalities. This recommendation can be regarded as part of a wider recommendation on the way the notarial activity is organised in Portugal.

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Law 155/2015 "Professional Association of Notaries Bylaws"

Annex I art. 87 (3)

Partnership incompatibilities

A notary who is a partner in a notarial society cannot exercise the profession as an individual notary.

The aim of this provision seems to be to prevent conflicts of interest.

We believe that whether a partner in a notarial firm should be able to practice as an individual notary as well, should be decided by the partnership own statutory laws and not by the Professional Association. As it stands, this incompatibility prevents a licensed notary from working in his notarial office and e. g. , invest in another notarial office possibly located in another municipality and providing services to another set of clients. This could in turn lead to less investment, hence less innovation in notarial services in both his notarial office and in the notarial society where he is a partner.

We recommend that this provision should be removed, in view of the general recommendation that an overall technical study on the current organisation of notarial services in Portugal be carried out.

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Law 155/2015 "Professional Association of Notaries Bylaws"

Annex I Art. 90

Partnership/ownership of professional firms

In addition to the cases provided for in the legal regime for the creation and operation of professional firms which are subject to the professional public associations regime, there are two other cases in which a notary is excluded as a partner of a professional firm of notaries. These are when the holder of a notarial office licence loses the licence, or when the notary obtains a licence to install an office in another municipality.

Art. 87 states that only notaries who have a licence to install a notarial office in the same municipality can be partners in a notarial firm. This Art. 90 should be interpreted in the same light, i. e. , as promoting market segmentation, which, together with the setting of territorial quotas, are meant to guarantee easier access to notarial services across the whole country.

The loss of the notarial license should not bar a notary from being a partner and from working in a notarial office. Also, a notary with a licence in a certain municipality be barred from becoming a partner in a notarial society located either in this same municipality or in another municipality. To connect the possibility to be a partner in a notarial professional firm with holding a notarial office licence restricts competition as it restricts partnerships in such firms. This makes it more difficult to create professional firms which will be able to compete in the market for notarial services. Weaker competition will in turn result in a consumer welfare loss.

We recommend that the ownership and partnership of professional notarial firms be opened to other professionals and non-professionals. This means removing the geographic restriction on partnerships between notaries, and allowing partnerships in a notarial firm to be opened to notaries without a licence to install a notarial office or with a notarial office license based in another municipality. This recommendation can be regarded as part of a wider recommendation on the way the notarial activity is organised in Portugal.

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Decree-Law 207/95 (last modification DL 125/2013) "Code of Notarial Acts"

Art. 1, Art. 2, Art. 3 and Art. 4

Reserved acts

Art. 1 describes the nature of a notarial act. Art. 2 states that notarial acts are to be performed by notaries. Art. 3 lists the special cases when officials other than notaries can perform notarial acts. Art. 4 lists the acts that are performed by notaries.

Arts. 2, 3 and 4 claim to reserve the performance of a series of notarial acts for notaries. Only under exceptional circumstances can notarial acts be performed by officials other than notaries. It is our understanding that such restrictions aim to guarantee that notarial acts meet high quality standards. After this DL 207/95, many notarial acts have been opened up to lawyers and solicitors.

Restricting the provision of a series of notarial acts to notaries excludes many professionals equally qualified to deliver such acts from the market and hampers competition in the market for such acts/services, with a negative impact on prices, when they can be freely set, and on diversity and innovation in the provision of notarial services.

We recommend that the scope of still reserved notarial acts in Portugal be revisited with the aim of opening them to other legal professions.

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Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 5

Multidisciplinary practice in professional firms

Notaries exercise their professional acts in a notarial office. Notaries can associate themselves in professional firms composed exclusively of notaries.

The limitations regarding the form of businesses aim to prevent the application of commercial business forms to notarial professional services and to ensure practitioners take personal responsibility for their activity. Also there are rules of ethics, such as professional secrecy, that notaries are obliged to comply with, but others may not. The practice of notarial activity in a notarial office seems to aim at easy access to notarial services by the public.

To restrict multidisciplinary activity in a professional firm is to restrict the association of different professionals, belonging to different professional associations (some may not even belong to a public professional association), who wish to exercise their professional activities within the same firm and in the pursuit of the firm’s corporate or social objective(s). In a professional firm, this restriction takes the form of a restriction on partnership – restricting, or banning altogether, non-professional partners. This restriction is particularly acute in the case of the legal professions. To rule out multidisciplinary activity in the same professional firm, between potentially complementary service providers, harms competition and can be detrimental to consumer welfare. In fact, this restriction does not allow for the full exploration of economies of scope that come with the offer of different services by a same “service delivery unit” that shares infrastructure and human capital. It foregoes gains from specialisation and service quality that would result from the interaction between a wider range of professionals. This also means foregoing the exploitation of economies of scale and the advantages of branding. It also does not allow for the mitigation of the double marginalisation (or double mark-up) problem that comes with multidisciplinary activities which can complement each other, by segmenting the services provided. This means foregoing lower average costs in a multi-product firm, thereby leading to higher fees being charged to clients, while preventing clients from further benefits that could be gained from a more convenient "one-stop shop" for a wider range of professional services. Ruling out multidisciplinary activity within a profession can reduce the scope for better risk management between different professional activities within the same professional firm, as they may be subject to non-identical demand volatility or uncertainty, i. e. , reduction in the scope for internal risk spreading to be understood as the ability to transfer resources in response to fluctuations in demand. To offer a wider range of professional services means to be better prepared to face market uncertainties. Furthermore, opening up a professional firm to multidisciplinary activities is likely to ease the introduction of innovative products but also to spur innovation in the delivery of already existing products or ranges of products.

The prohibition of multidisciplinary practice in professional firms should be removed, particularly in the case of the four legal professions, where the “professional partnership model” is the only model allowed for the practice of the profession in a collective way.

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Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 6 (1)(2)

Registration and licensing

This provision determines that in each municipality there will be at least one notarial office, whose activity will depend on the attribution of a licence. The number of notaries and the localisation of their offices are included in a map approved by a decree-law, after consultation with the Professional Association of Notaries and the Council of Notaries.

Licence quotas for notaries seem to be grounded in the public interest. On the one hand, the state aims to ensure that all people across the national territory will have access to notarial services, as these services are provided under a public prerogative. On the other hand, to ensure that a notary is willing to establish an office in a remote or weakly populated area, the quota system aims to guarantee a minimum income for the local notary, complemented with the current Compensation Fund. The number of notaries and the localisation of their offices are included in a notarial map approved by a decree-law, after consultation with the Professional Association of Notaries and the Council of Notaries. The state determines the total number of notaries to be licensed and the way they will be distributed across the different municipalities. It establishes a territorial segmentation for the attribution of notarial licences, where each notary can only hold one licence. The last version of the notarial map which determined the geographical quotas is from 2004 (annex to Decree-Law 26/2004). According to stakeholders, this map ought to be changed to reflect new territorial and demographic characteristics. The 2004 map indicates that around 72% of all the municipalities across the country have only one licence (221 out of 310 municipalities). Also, according to stakeholders, the mandatory geographical competence of a specific notary promotes procedural speed (e. g. if the notarial act relates to properties and courts within the same territorial jurisdiction). It might also protect economically disadvantaged parties from the possible relocation of the process to a notarial office too far from the centre of the succession interests.

The current quota model clearly restricts the number of notaries in the market and may reduce the incentives of existing notaries to compete on price and quality with each other for the provision of services. It also prevents competition between notaries in a one-licence area as no new notary can enter the market and seek custom. Limiting the number of licences to operate a notarial office as defined in the notarial map restricts the overall number of professional titles that are available to be granted. This leads to long waiting times for prospective notaries working as clerks, while no competitive pressure is exerted on incumbents. These restrictions are even more difficult to justify in the case of municipalities with higher population density and higher incomes (urban areas and along Portugal's attractive coastal and touristic areas). In these cases, quota restrictions currently allow incumbents to pick and choose their clients with little incentive to improve services, innovate or adapt to the market in other ways. A less restrictive and more market-oriented mechanism for the allocation of notaries throughout the national territory would encourage lower prices, higher quality and innovation as a result of greater competition. Such a mechanism is unlikely to imply more difficult or more expensive access to notarial services. On the contrary, greater consumer welfare would arise not only from more but also better services being available. The need for quotas has largely been superseded by technology and the gradual removal of reserved activities as the exclusive preserve of notaries. The need for the physical presence of a notary is therefore less pressing, as many acts can be dealt with over the internet and by email, or by lawyers and solicitors. The Portuguese government has already recognised this. As part of the Portuguese "Simplex" e-government programme, citizens have been given a unique identity card and "e-identity" that can be used to officially sign documents remotely. The Portuguese government should consider internet availability and use their e-government programme to facilitate the use of notarial services remotely, thereby reducing the number of remote geographic areas identified as in need of notaries with a unique licence. Such alternative solutions may better balance competition and universal access to notarial services, as twin public goods. One solution put forth by the Portuguese Competition Authority’s Recommendation 1/2007 (see Box 4. 3) calls for widening the range of legal services a notary may provide in a disadvantaged geographical area. Regarding the geographical barrier, more than 70% of the municipalities only have one notarial office. This restriction can potentially create monopolistic situations depending upon the competitive pressure exercised by lawyers and solicitors as well as how the single notary would respond to the requirements imposed by the Compensation Fund. If monopolistic situations were to arise, they would imply the charging of fees above competitive levels and a lower incentive to innovate and provide higher quality services. Finally, the existing Compensation Fund constitutes an income redistribution mechanism that limits the risk inherent to the economic activity and may not stimulate the right type of investment and service innovation that can lower costs and raise revenues.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas or the need to obtain a notarial office licence before establishing oneself as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real-estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism areas, highly industrialised areas) and fully liberalise the establishment of notarial offices there; ii. In low-density areas, allow for open competition for the establishment of one or two offices per area (or whichever density is determined by the study). 3. Revisit the existing compensation fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practiced by both lawyers and solicitors who may also practice in those areas.

22

Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 7

Geographical barrier

Notaries exercises their activity in the municipal territory where their office is located and for which they have been granted a licence. However, they can also practice notarial acts over persons and property from another municipality. According to stakeholders, in such a case, the notary cannot actively seek out such services but is only a passive recipient of service requests from the clients. Exceptionally, a notary's jurisdiction may be exercised in more than one contiguous territorial circumscription, following authorisation of the Minister of Justice, after consultation with the Professional Association of Notaries.

Licence quotas for notaries seem to be grounded in the public interest. On the one hand, the state aims to ensure that all people across the national territory will have access to notarial services, as these services are provided under a public prerogative. On the other hand, to ensure that a notary is willing to establish an office in a remote or weakly populated area, the quota system aims to guarantee a minimum income for the local notary, complemented with the current Compensation Fund. The number of notaries and the localisation of their offices are included in a notarial map approved by a decree-law, after consultation with the Professional Association of Notaries and the Council of Notaries. The state determines the total number of notaries to be licensed and the way they will be distributed across the different municipalities. It establishes a territorial segmentation for the attribution of notarial licences, where each notary can only hold one licence. The last version of the notarial map which determined the geographical quotas is from 2004 (annex to Decree-Law 26/2004). According to stakeholders, this map ought to be changed to reflect new territorial and demographic characteristics. The 2004 map indicates that around 72% of all the municipalities across the country have only one licence (221 out of 310 municipalities). Also, according to stakeholders, the mandatory geographical competence of a specific notary promotes procedural speed (e. g. if the notarial act relates to properties and courts within the same territorial jurisdiction). It might also protect economically disadvantaged parties from the possible relocation of the process to a notarial office too far from the centre of the succession interests.

The current quota model clearly restricts the number of notaries in the market and may reduce the incentives of existing notaries to compete on price and quality with each other for the provision of services. It also prevents competition between notaries in a one-licence area as no new notary can enter the market and seek custom. Limiting the number of licences to operate a notarial office as defined in the notarial map restricts the overall number of professional titles that are available to be granted. This leads to long waiting times for prospective notaries working as clerks, while no competitive pressure is exerted on incumbents. These restrictions are even more difficult to justify in the case of municipalities with higher population density and higher incomes (urban areas and along Portugal's attractive coastal and touristic areas). In these cases, quota restrictions currently allow incumbents to pick and choose their clients with little incentive to improve services, innovate or adapt to the market in other ways. A less restrictive and more market-oriented mechanism for the allocation of notaries throughout the national territory would encourage lower prices, higher quality and innovation as a result of greater competition. Such a mechanism is unlikely to imply more difficult or more expensive access to notarial services. On the contrary, greater consumer welfare would arise not only from more but also better services being available. The need for quotas has largely been superseded by technology and the gradual removal of reserved activities as the exclusive preserve of notaries. The need for the physical presence of a notary is therefore less pressing, as many acts can be dealt with over the internet and by email, or by lawyers and solicitors. The Portuguese government has already recognised this. As part of the Portuguese "Simplex" e-government programme, citizens have been given a unique identity card and "e-identity" that can be used to officially sign documents remotely. The Portuguese government should consider internet availability and use their e-government programme to facilitate the use of notarial services remotely, thereby reducing the number of remote geographic areas identified as in need of notaries with a unique licence. Such alternative solutions may better balance competition and universal access to notarial services, as twin public goods. One solution put forth by the Portuguese Competition Authority’s Recommendation 1/2007 (see Box 4. 3) calls for widening the range of legal services a notary may provide in a disadvantaged geographical area. Regarding the geographical barrier, more than 70% of the municipalities only have one notarial office. This restriction can potentially create monopolistic situations depending upon the competitive pressure exercised by lawyers and solicitors as well as how the single notary would respond to the requirements imposed by the Compensation Fund. If monopolistic situations were to arise, they would imply the charging of fees above competitive levels and a lower incentive to innovate and provide higher quality services. Finally, the existing Compensation Fund constitutes an income redistribution mechanism that limits the risk inherent to the economic activity and may not stimulate the right type of investment and service innovation that can lower costs and raise revenues.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas or the need to obtain a notarial office licence before establishing oneself as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real-estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism areas, highly industrialised areas) and fully liberalise the establishment of notarial offices there; ii. In low-density areas, allow for open competition for the establishment of one or two offices per area (or whichever density is determined by the study). 3. Revisit the existing compensation fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practiced by both lawyers and solicitors who may also practice in those areas.

23

Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 15

Exclusivity of functions

The functions of a notary are exercised with exclusivity, and are incompatible with other paid functions, either public or private, except teaching activities, participation in conferences and copyright.

This rule is intended to protect the client from possible conflicts of interest and aims to protect the public interest. The recital from Decree-Law 26/2004 states that the exclusivity of the profession stems from the required high standards of technical competence, and from the need to ensure the notary's impartiality and independence in relation to the involved parties.

This prevents professionals from providing notarial services if they are already engaged in other activities or if they intend to be. As an example, we do not see a conflict arising from practising notarial acts and at the same time e. g. , being a partner in some other firm unrelated to the practice of such acts. This rule presents no flexibility, only allowing for three exceptions. Potential suppliers may be excluded from the market because of the lower financial incentive such a restriction implies.

We recommend that this provision be changed from imposing a general ban on engaging in paid public activities to allowing the practice of other paid activities, public or private, unless there is a clear and explicit conflict of interest with the practice of notarial acts.

24

Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 17(1)(2)

Professional fees

This provision states that professional fees for notarial acts are of three types: fixed fees (only for acts pertaining to inventory processes, with fees differing between different acts), fees subject to a maximum level (i. e. , price cap), and free fees. Fixed fees and maximum fees are defined in a table approved by the Ministry of Justice. This table is revised periodically, at least every two years. The existing table which still applies was approved by Ordinance 385/2004. Note that Ordinance 385/2004 established fixed fees for a very significant number of notarial acts. Free fees were only allowed for a small set of notarial acts. In the meantime, by Ordinance 1416-A/2006, the free fees regime was extended to the recognition of signatures, authentication of private documents and certification of translated documents. However, Ordinance 574/2008 has abolished fixed fees for notarial acts. Since then, notarial acts are subject to maximum fees or to a regime of free fees, except for acts pertaining to inventory processes, which are defined by the Ministry of Justice (see Ordinance 278/2013, amended by Ordinance 46/2015).

According to stakeholders, the regulation of fixed prices related to the inventory process, such as in a judicial separation process, might be justified on exceptional public interest grounds to guarantee economic access to inventory processes equally by all people. The existence of maximum prices in exclusive notarial activities intends to guarantee universal access to these services independently of the clients’ income level. Notary services exhibit characteristics of public goods, which can lead to positive externalities. Because public goods tend to be under-produced, the state usually establishes regulation on the provision of such services. Additionally, it is claimed that price control guarantees a notary's impartiality and independence in the provision of a public service, as they wouldn't have to negotiate prices with their clients.

Maximum and fixed price regimes limit the incentives to compete and innovate. Even though maximum price regimes allow for price competition, they often serve as a focus point to co-ordinate prices. In a competitive market, prices tend to reflect more closely the costs of the services provided, and do not necessarily jeopardise the quality of those services. In its Recommendation 1/2007, the AdC proposed the adoption of a system of maximum prices during a transitional period for services which remain within the exclusive competence of notaries and whose social relevance justified the need to guarantee universal access. This regime would be phased out as the quantitative restrictions imposed by the quota system were phased out. Other alternatives, rather than fixing maximum prices, may be adopted to overcome any lack of information from the demand side, such as the publication of historical or survey-based price information by independent parties, e. g. consumer associations. This would improve transparency and allow greater competition in prices. The same principle applies when the regulator opts for establishing maximum prices, based on the attempt to avoid excessive prices charged to consumers, in particular when the regulator wants to guarantee universal access to notarial services.

The maximum prices regime should be revisited, with the aim to gradually phase them out as appropriate.

25

Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 17(3)

Professional fees

Notaries must charge their professional fees to their clients with moderation, taking into account the time spent, the difficulty of the subject, the importance of the service provided and the socio-economic context of the clients. These rules apply whether the amount of professional fees is free or variable. ( Note that Art. 3 para. 2 of Ordinance 385/2004 establishes the same rule, but only for freely-established fees.

The criteria to fix professional fees, either free or variable, is established with the purpose of protecting clients from excessive prices, due to the existing information asymmetry between the client and the notary, that could lead to an outcome of moral hazard. On the one hand, notarial services exhibit characteristics of public goods, which can lead to positive externalities. Because public goods tend to be under-produced, the state usually establishes regulation on the provision of such services. One the other hand, as referred to above, such professional services tend to create difficulties for consumers to observe and judge the quality of work (information asymmetries). Because the quality of work is difficult to assess, price regulation tends to prevent quality deterioration of the services provided by the professionals.

Although the identification of objective criteria used to set fees (by solicitors) may be advantageous when the Professional Associations is required (by clients) to revise or arbitrate on the fees charged, this list should not be exhaustive. This provision may restrict the contractual freedom between solicitor and client, when choosing the payment format for services rendered, as well as the criteria to determine the solicitor's fees. This restriction may reduce the scope for different solicitors to compete for clients, more so if the Bar Association adopts an active posture regarding how its members’ services should be paid for. Hence, it may hamper competition in the market for legal services.

This legal provision should be modified to allow the use of more specific and objective criteria based on professional association previous decisions.

26

Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 20

Opening hours

The opening hours of notarial offices are decided by the Ministry of Justice after consulting the Professional Association of Notaries.

Setting operating hours is the norm for public services, such as in the case of record keepers and registers, who historically were linked to the notarial activity.

The setting of operating hours by the Ministry of Justice limits the free management of any business and its activity, reducing the scope for competition between service providers. This type of restriction is in part the result of a privatised self-regulated liberal profession being regarded as a provider of public services. The fact that notaries can provide services at a client's premises does not necessarily solve the problem.

This legal provision should be removed. An exception may be made for municipalities where there is a single notarial office. In this case, opening hours for notarial offices could still be decided by the Ministry of Justice, provided that there are grounds for fearing that, without such a measure, shorter hours would be kept to the detriment of consumers when there is no alternative notarial office and when the provision of notarial services over the internet is still incipient, due to limitation both on the supply side as on the demand side.

27

Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 25 and 26

Academic qualifications

The requirements to become a notary in Portugal are, amongst others, to hold a university law degree from a Portuguese university, or an equivalent university law degree from another country.

Entry requirements aim to ensure notaries will provide legal services with the necessary expertise and with quality outcomes. Notaries need to be well grounded in theoretical knowledge in law and in practical experience, which is obtained from the internship. Across the other EU Member States, law studies and the internship are entry requirements generically established by the applicable regulation. In some cases, the qualifying period after law studies are completed is 6 or 7 years, including, in some cases, experience at courts (e. g. Austria). Generically in the other EU Member States, an entry exam together with a competitive tender process is also required. The tender process ensures that only qualified notaries will access the professional title through a licensing scheme. This aims to protect the professional title, considering the public functions of notaries.

Requiring a law university degree limits the number of professionals that can enter the market and offer their services there. Owing to these entry restrictions, a smaller number of professionals have to serve the same number of clients. This may lead to higher prices charged for those services as demand may outstrip supply. In addition, with little or no competitive pressure, professionals have little incentive to innovate and to provide a larger range of services. According to the European Commission ("Proposal for a Directive of the European Parliament and of the Council on a proportionality test before adoption of new regulation of professions", COM(2016) 822 final, 10. 1. 2017, p. 15, para. 12), this ultimately leads to a welfare loss for businesses, including SMEs and individual consumers. E. g. , in Germany, to become a notary, one must pass a state exam, but no law degree is required beforehand, and have a minimum of two or three years' experience as notarial candidates or lawyers. Notaries are also divided into three types (the single profession notary, the advocate-notary and the state employed or civil servant notary). The advocate-notaries are the most common in Germany, since they are lawyers first of all, the notarial duty being exercised as a second profession.

We recommend that access to the professions of lawyer, solicitor, notary and enforcement agent be open to university degrees other than law and a solicitors’ practice degree, as the case may be. The professional associations should work with the legislator to set a transparent, proportional and non-discriminatory process for identification of alternative routes to obtain the strictly necessary or adequate qualifications for the exercise of legal profession. In this case, candidates may be required to hold a postgraduate degree in law or to take a conversion course, and should undergo the same training as other legal trainees, including passing the Bar Exam.

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Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 27

Professional internship

The internship has a maximum duration of 18 months. An intern's supervisor must be a notary with at least five years of experience, freely chosen by the intern or appointed by the professional association. The internship includes a 6-month initial stage and a 12-month complementary stage. The initial stage aims to guarantee the intern acquires the required technical and professional ethics knowledge. The complementary stage aims to deepen and develop a familiarity with all practical aspects of the profession, with the way a notarial office works, and with all the institutions relevant for the notarial profession. These periods of time can be reduced by half when interns are Doctors in Law, magistrates from a court or from the public prosecutor's office with a high enough professional evaluation, registry officials with a high enough professional evaluation, lawyers who have been members of the Bar Association for at least 5 years, and notarial assistants in full exercise of delegated functions for at least 1 year. The internship is also halved if the trainee is a registrar or notary's helper or clerk with a high enough professional evaluation.

It is our understanding from meetings with stakeholders that these requirements aim to ensure internship candidates are fully prepared to successfully conclude the internship programme and to ensure they have the necessary academic qualifications and are legally suitable both as candidates and as future notaries, and that they will be able to provide notarial services meeting the required technical quality level.

Framework Law 2/2013 establishes that professional internships in any self-regulated profession should be required only when justified by the public interest. An internship constitutes a barrier to access the profession and may reduce the number of professionals competing in the market for legal services, whenever they unduly discourage well-qualified professionals from enrolling in the internship programme, or when they unduly reduce the number of professionals who successfully complete it. Hampering competition may drive prices/fees up and may reduce the diversity and innovativeness of legal services offered in the market, generating a loss in social welfare. However, there is proportionality between the policy objective and the harm to competition on the existence of the internship per se, without taking into account its duration, subject matter, evaluation model and associated costs. When the internship evaluation procedures is conducted solely by peers, its total independence may be compromised, as there is a latent conflict between the public interest a professional association pursues and its own private or corporate interest.

The final evaluation of the notaries' internship should be conducted by a board, independent of the professional association, which may include members of the latter but must also include professionals of recognised merit, such as law professors and magistrates, among others. We also recommend that the theoretical training should provide an e-learning option. This could lead to a reduction in internship fees, as well as reducing the opportunity costs of having to attend those training courses in person. We recommend that subjects that are part of any required university curriculum (such as a law degree, a suggested conversion or a postgraduate course) should not be included in the theoretical training offered during the first six months of the internship. All internship fees should be proportional and reflect the true costs of organising and providing the internships, following transparent and clear criteria that must be made public by the professional association.

29

Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 31

Attribution of the title of notary

The title of "Notary" is obtained through a public candidacy process, announced by the Ministry of Justice in the Official Journal, and after consultation with the professional association. Only interns who have successfully concluded their internship can be candidates.

The tender process ensures that only qualified professionals will access the professional title through a licensing scheme. This aims to protect the professional title, considering the public functions of notaries. Consumers are, therefore, informed that the professionals are certified to provide such services. In this case, the professional association acts as a public entity empowered by the State to perform this function.

This procedure constitutes a mandatory additional burden on professionals who wish to access the notarial profession. It constitutes an extra opportunity cost that may dissuade some professionals from becoming notaries and compete in the market as such. This public candidacy procedure is part of the existing licensing regime for the attribution of the title of notary and the attribution of notarial offices. It is part of a system of quotas and geographical segmentation of notarial services, addressed by the Portuguese Competition Authority's Recommendation 1/2007. As such, it may hamper competition in the market for notarial services, with negative impacts on consumer welfare (households and firms, in particular SMEs). This does not seem generically implemented in other EU Member States. Such a public candidacy process could be considered proportional if there were no restrictions on the number of professional titles to be given, either formally or informally. However, and according to stakeholders, the limit of licences to operate notarial offices as defined in the notarial map (approved by this Decree-Law 26/2004) indirectly restricts the number of professional titles attributed in this public candidacy procedure. Moreover, the public candidacy procedure may allow for a control of the number of licensed notaries, as its timing is controlled by the Ministry of Justice. Overall, the current centralised/quota system to grant the professional title and licences to operate notarial offices restricts competition by restricting the number of notaries able to compete in the market and by segmenting the market. This leads to less diversity and innovation in the services being provided, in particular when these services are still exclusive to notaries, and may prevent the practice of lower prices for the different services that are not under a fixed price regime.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas or the need to obtain a notarial office licence before establishing oneself as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real-estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism areas, highly industrialised areas) and fully liberalise the establishment of notarial offices there; ii. In low-density areas, allow for open competition for the establishment of one or two offices per area (or whichever density is determined by the study). 3. Revisit the existing compensation fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practiced by both lawyers and solicitors who may also practice in those areas.

30

Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 3

2

Attribution of the title of notary

The public candidacy process for the award of the title of notary includes assessment tests to evaluate each candidate's capacity for the exercise of notarial functions. These tests include written and oral examinations.

The attribution of the title of notary by a public act is justified by the fact that notaries perform a public interest activity. As such the state is required to validate a candidate's capacity to become a notary.

These assessment tests constitute a mandatory additional burden on professionals who wish to access the notarial profession and may dissuade candidates from becoming titled notaries able to practice the profession. These represent an entry cost and can limit the number of competing professionals in the market. Additionally, note that candidates to the title are already required to hold a university law degree and to complete a professional internship.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. This will include revisiting the current public candidacy procedure for the attribution of the title of notary.

31

Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 33

Title of notary

The title of notary is granted to any candidate approved in the public candidacy process. The newly titled notaries are ranked according to their merit, depending on the classification they obtain in the public application process and on their university law degree classification. This ranking stays valid for two years, with a possible extension to be decided by the professional association.

The attribution of the title of notary by a public act is justified by the fact that notaries perform a public interest activity. As such the state is required to validate a candidate's capacity to become a notary.

These assessment tests constitute a mandatory additional burden on professionals who wish to access the notarial profession and may dissuade candidates from becoming titled notaries able to practice the profession. These represent an entry cost and can limit the number of competing professionals in the market. Additionally, note that candidates to the title are already required to hold a university law degree and to complete a professional internship.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. This will include revisiting the current public candidacy procedure for the attribution of the title of notary.

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Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 34(1)(2)(3)

Registration and licensing

Licences for the installation of a notarial office are granted through a public candidacy procedure. The number of licences advertised depends on the number of existing vacancies across the national territory. These vacancies are filled following the ranking of the different candidates obtained from the public candidacy process for the granting of the title of notary, and following the territorial preferences for a notarial office that each candidate has submitted.

The quota system (numerus clausus) has been justified as a mechanism to ensure an equitable distribution of notarial services providers throughout the country. An argument that has been put forth is that in a free, competitive market, less populated or less economically attractive places would not have access to notarial services. This candidacy procedure is part of the existing model of quotas and geographic delimitations, which is meant to control the number of notarial offices and their geographic distribution across the national territory. It also aims to ensure that notarial licences are attributed to the more qualified notaries, and to provide legal certainty regarding their legitimacy as professionals.

The "notarial map", defined by the Ministry of Justice, establishes the number of notarial offices that should be licensed in each municipality. This map's last version is from 2004 (see annex of Decree-Law 26/2004). Law 155/2015 revoked this map, but the new map has not been approved yet, as established in Art. 6. According to stakeholders, the 2004 map is outdated and must be modified according to new territorial and demographical characteristics. Considering the 2004 map, in 72% of the municipalities across the country, there is only one licence to be issued (221 out of 310 municipalities only have one licence). This provision is part of the current system of quotas and territorial segmentation that condition the exercise of the profession in notarial offices across the national territory. The Ministry of Justice defines the total number of notaries to be licensed and the way notarial offices, to be operated by notaries, will be distributed across the different municipalities. Each notary can only hold one licence to operate a notarial office. This system restricts the number of notaries able to compete in the market, and may reduce the incentives of existing notaries to compete with each other for the provision of services. These restrictions are difficult to justify, particularly in municipalities with a higher population density and higher incomes (big urban centres). Lower prices, higher quality and innovation as a result of greater competition would lead to greater consumer welfare leading not only to better services but also more services being provided. Even for notarial services with fixed prices, notaries can still compete in quality and innovation. The public interest may want to guarantee the universal provision of at least a minimum of notarial services. This means that the law would determine ex ante the existence of one licence in a certain territorial jurisdiction (which can be the municipality), but the law should not establish a fixed or maximum number of licences. Even such a solution would have to be analysed considering a possible compensation system. The licensing requirement by itself constitutes an entry barrier. The implicit model restricts the number of notaries and other equally qualified professionals from competing in the market for notarial services, reducing consumer choice. Finally, a notarial office should not have to operate from some physical premises, i. e. , to be a "bricks-and-mortar" facility. A notarial office should not only be able to offer online services but the office itself could be virtual. The notary with a notarial office licence should be able to choose between opening a physical facility or operating virtually, or a mixture of both, even under a regime mandating that a certain percentage of notarial offices have to operate from physical premises for public interest reasons.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas and the need to obtain a notarial office licence before being established as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: (i)Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism areas, highly industrialised areas) and fully liberalise the establishment of notarial offices there; (ii) In low-density areas, allow for open competition for the establishment of one or two offices per area (or whatever density is determined by the study. 3. Revisit the existing Compensation Fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practised by both lawyers and solicitors practising in those areas. Finally, even if this law and this provision do not clearly mandate that a notarial office has to operate from some physical premises, i. e. , to be a "bricks-and-mortar" facility, a notarial office should not only be able to offer online services but the office itself could be virtual. The notary with a notarial office licence should be able to choose between opening a physical facility or operating virtually, or a mixture of both, even under a regime mandating that a certain percentage of notarial offices have to operate from physical premises for public interest reasons.

33

Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 35(2)

Registration and licensing

Each notary can only hold one notarial licence at a time. Each licence is granted by the Ministry of Justice.

This limitation aims to allow the state to control the number of offices and their distribution within the national territory, ensuring that notary services are effectively provided in all parts of the country. It also aims to provide legal certainty regarding the legitimacy of the operators. It is doubtful whether this restriction was introduced to curtail possible market power that could result from only one or a few notaries holding many licences.

The prohibition to hold more than one notarial licence prevents the exploration of economies of scale, greater professional specialisations, and greater management efficiencies, with the consequence of cost reductions, both in fixed and variable costs. These foregone cost reductions imply that higher prices will be practiced in the market than otherwise. Achieving lower costs would also lead to fiercer competition as there would pressure on other notarial offices to lower their prices as well, and take other measures to attract clients, more so in a more open model than the existing one. Without this prohibition, possible concentrations of market power could be dealt with through competition policy, in particular through the control of mergers and acquisitions. An eventual concentration of several notarial licences and notarial offices under the same notary can be dealt with under existing competition law, to avoid the emergence of excessive market power in relevant markets.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas and the need to obtain a notarial office licence before being established as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: (i)Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism areas, highly industrialised areas) and fully liberalise the establishment of notarial offices there; (ii) In low-density areas, allow for open competition for the establishment of one or two offices per area (or whatever density is determined by the study. 3. Revisit the existing Compensation Fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practised by both lawyers and solicitors practising in those areas.

34

Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 35 para. 3

Registration and licensing

Each licensed notary is obliged to exercise the notarial activity under such licence for a minimum period of two years and within the territory where the licence is valid. During that period the notary is not allowed to apply for another licence.

The fact that each licensed notary is not allowed to apply for another licence seems to follow from Art. 35 para. 2. That each licensed notary has to exercise his activity for at least two years, purportedly aims to avoid too high a mobility rate as licences, a scarce good, are granted through a time-consuming public candidacy procedure, within the existing quotas and territorial delimitation model.

This provision establishes requirements for the exercise of the profession that may discourage some professionals from entering the market. In fact, there is a fixed legal limitation on the minimum period for every licence. In some cases, it may be justified to set different periods. This rule presents no time flexibility. In some cases, this may discourage notaries from applying for a licence and may reduce the number of notaries competing in the market.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas and the need to obtain a notarial office licence before being established as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: (i)Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism areas, highly industrialised areas) and fully liberalise the establishment of notarial offices there; (ii) In low-density areas, allow for open competition for the establishment of one or two offices per area (or whatever density is determined by the study. 3. Revisit the existing Compensation Fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practised by both lawyers and solicitors practising in those areas. This provision, as part of the current organisation of notarial activity in Portugal, should be reassessed by the technical study.

35

Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 40-A(3)

Registration and licensing

In the case where a professional comes from a EU Member State that does not regulate the notarial activity beyond demanding a university law degree, this professional must have practiced the profession of notary for two years during the last 10 years to be able to exercise this profession in Portugal.

The national legislator may have intended to ensure that the services they provide in the national market meet certain quality standards that have to be met by national notaries and by notaries coming from other EU Member States where this profession is regulated.

The two-year requirement may constitute an entry barrier for exercising the profession in the national market by certain EU professionals. These professionals may be fully qualified notaries and such an additional requirement of two years of experience may reduce the number of qualified notaries established in the national territory. Furthermore, such professionals will need to have a professional title, equivalent to the one attributed in Portugal. There seems to be no reason for this additional entry requirement of a minimum of two years of professional experience.

If a professional from an EU Member State is a licensed notary in their home country, they should be allowed to practice their profession in Portugal, regardless of years of experience, provided they meet the required criteria in terms of theoretical and practical knowledge. Hence, this legal provision should be rewritten to accommodate notaries from other EU Member States, regardless of whether their home country regulates the profession of notary or not, even if they have less than two years’ experience, but who meet the technical qualifications and knowledge as required by the profession.

36

Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 40-A(4)

Registration and licensing

To be established in Portugal, professionals from other EU Member States must apply for the title of "Notary" in Portugal in a public candidacy procedure as established in Art. 25(f)). In order to operate as notaries in Portugal, they must apply for a licence (under Arts. 34 and 35) or be registered on the waiting list (bolsa de notários) (under Art. 36). They must all be registered with the Professional Association of Notaries. These requirements are applicable regardless of whether the profession is regulated in the notary's state of origin or not.

These requirements intend to impose on non-nationals from EU Member States the requirements already imposed on nationals for the access and exercise of the profession of notary in Portugal.

One may question whether there is a need for the cumulative entry requirements of holding the professional title in the state of origin, as well as holding the national professional title. Regarding the exercise of the activity under a licence to operate, the same analysis is made for nationals. The establishment of quotas is harmful and limits the free establishment of professionals in the national territory. It will hamper competition by restricting the number of notaries in the market and by segmenting the market, limiting consumer choice and ultimately will reduce consumer welfare.

Following the AdC's Recommendation 1/2007 and more recent international developments, such as the Loi Macron, we strongly encourage the carrying out of an overall technical study on the way notarial services are currently organised in Portugal. The current quota and market segmentation system hamper competition in price and quality, reduce diversity of services and innovativeness, reduce consumer choice, leading ultimately to a reduction in social welfare.

37

Decree-Law 26/2004 (as amended by Law 51/2004 and Decree-Law 15/2011 and republished by Law 155/2015 as Annex II) "Notaries Statutory Law"

Art. 41(b) and Art. 43

Quality standards

Notaries are subject to an age limit of 70 years in the exercise of their profession. The notary should inform the professional association up to 90 days before reaching that age.

This provision aims to guarantee that all notaries exercising their profession are fully capable of performing their professional acts in a responsible way. But it may also attempt to mitigate an excess of notaries on the waiting list for the relative fewer number of notarial licences issued. There is an age limit in almost all Member States, of from 65 to 75 years of age; in many EU countries, the age limit is 70 years old, the same limit established in Portugal (e. g. Germany, Austria, Croatia, Spain, France, Greece, Hungary, Lithuania, Netherlands, etc. ). In Malta, for instance, there is no age limit, but this is the exceptional regime across the EU Member States (according to information from the Notaries of Europe). Note that in Portugal the general retirement age is, currently, around 66, though it is likely to steadily increase over time.

An age limit to exercise the profession of notary reduces the number of notaries that could compete in the market. It is a generic requirement, which does not benefit from a case-to-case analysis. It may lead to an exit from the market of notaries that are still fully qualified and capable of operating in the market, despite their age. Under the current quota and market segmentation system and the fact that there is a list of notaries waiting to be granted a notarial office through a public tender, each notary that exits the market will likely be replaced by a notary on the waiting list, even if not in the short run. However, a simple one-to-one replacement does not constitute a pro-competitive procedure in itself. Hence, this age limit requirement is not pro-competitive.

This legal provision should be removed or replaced by a legal provision that establishes a retirement procedure based on a case-by-case analysis, not necessarily run by the Professional Association of Notaries. This analysis would be carry out every year, once the worker is 70 years-old.

38

Decree-Law 66/2005 "Reception of documents by electronic means"

Art. 8(1)

Professional fees

This provision establishes that fees charged by notaries for the use of the fax and for the electronic transmission of documents are regulated in a specific regulation.

Price regulation (including prices subject to maximum or fixed levels) aim to guarantee universal access to these services by all users and that a price control regime may protect the quality of services. The claim is that if prices were freely determined by the service providers (in this case, notarial offices and registry services) competition between them would drive quality down as part of a cost-cutting strategy.

Fixed prices and maximum price regimes are anti-competitive and can lead to negative economic impacts. Not allowing the free determination of fees/prices will hamper price competition, which could lead to lower prices for the benefit of consumers and still guarantee universal access to such services. Moreover, setting maximum prices may hamper innovation and may facilitate price co-ordination around the maximum price, which plays the role of a focal point in a strategic sense. Now, it may be doubtful that there is much scope for innovation in faxing documents. But price co-ordination, which is anti-competitive, remains a possibility and should not be allowed to take place. However, and following Recommendation 1/2007 issued by the AdC, Art. 5 from Ordinance 574/2008 defines two types of fees, namely maximum fees for those notarial acts exclusively performed by notaries and as listed, and free fees for all the other acts, including the ones also performed by lawyers and solicitors. Hence, fixed fees for notarial acts have been abolished by such an ordinance. Fixed fees are still in place for inventory legal processes only.

This legal provision should be removed given the aim of phasing out maximum price regimes and after fixed prices regimes have been eliminated.

39

Ordinance 574/2008" "Table of fees and charges for the notarial activity"

All

Maximum fees

The notarial acts performed exclusively by notaries are governed by a maximum price regime, except those for inventory procedures that are under a fixed fee regime. All other acts are provided under a free price regime.

According to stakeholders, the regulation of fixed prices related to the inventory process, such as in a judicial separation process, might be justified on exceptional public interest grounds to guarantee economic access to inventory processes equally by all people. The existence of maximum prices in exclusive notarial activities intends to guarantee universal access to these services independently of the clients’ income level. Notary services exhibit characteristics of public goods, which can lead to positive externalities. Because public goods tend to be under-produced, the state usually establishes regulation on the provision of such services. Additionally, it is claimed that price control guarantees a notary's impartiality and independence in the provision of a public service, as they wouldn't have to negotiate prices with their clients.

Maximum and fixed price regimes limit the incentives to compete and innovate. Even though maximum price regimes allow for price competition, they often serve as a focus point to co-ordinate prices. In a competitive market, prices tend to reflect more closely the costs of the services provided, and do not necessarily jeopardise the quality of those services. In its Recommendation 1/2007, the AdC proposed the adoption of a system of maximum prices during a transitional period for services which remain within the exclusive competence of notaries and whose social relevance justified the need to guarantee universal access. This regime would be phased out as the quantitative restrictions imposed by the quota system were phased out. Other alternatives, rather than fixing maximum prices, may be adopted to overcome any lack of information from the demand side, such as the publication of historical or survey-based price information by independent parties, e. g. consumer associations. This would improve transparency and allow greater competition in prices. The same principle applies when the regulator opts for establishing maximum prices, based on the attempt to avoid excessive prices charged to consumers, in particular when the regulator wants to guarantee universal access to notarial services.

The fixed fee regime for inventory processes should be revisited with the aim to gradually phase it out as appropriate. The maximum prices regime should be also revisited, with the aim to gradually phase them out as appropriate. This view is echoed by the Portuguese Competition Authority (AdC).

40

Regulation from 27/04/2013 "Report on fees"

Arts. 5

Professional fees

The Professional Association of Notaries has the competence to elaborate reports on the fees charged by notaries following a proposal by its Supervisory, Disciplinary and Ethical Council.

We understand that this provision attempts to protect clients from the practice of excessive prices/fees by notaries, drawing on the knowledge notaries themselves have over the type of work the delivery of notarial services might involve.

First, it is not clear whether the aggrieved party can appeal to a civil/administrative court about a decision by the rapporteur they do not agree with. Second, we could even question why the aggrieved party should not be able to dispute the fees charged directly in court or appeal to an independent third party, even admitting that the court might not be as knowledgeable as the Professional Association about the normally charged fees and their rationale. An Ombudsman, as an independent party, could be particularly helpful to assess and solve this type of conflicts over charged fees, avoiding long disputes. As the control regime now stands, and since the rapporteur is also a member of the Professional Association's Supervisory, Disciplinary and Ethical Council, one cannot exclude at the outset that some information dissemination on fees might circulate between the members, even in the presence of some type of "Chinese walls", could then lead to practices restrictive to competition, possibly due to some form of collusion between members of the professional association as providers of notarial services. This notwithstanding the fact that Art. 20 of the same provision imposes that confidentiality, this must be upheld.

We recommend that a redress procedure involving an independent third party, such as an Ombudsman for the legal professions, be set in place, thus avoiding the described pitfalls, notwithstanding the fact that the court is ultimately the entity that collects the fees.

41

Regulation as of 09/10/2017 "Internship of notaries"

Arts. 2 (d)

Academic qualifications

The requirements to become a notary in Portugal are, amongst others, to hold a university law degree from a Portuguese university, or an equivalent university law degree from another country.

Entry requirements aim to ensure that notaries will provide legal services with the necessary expertise and with quality outcomes. Notaries need to be well grounded in theoretical knowledge in law and in practical experience, which is obtained from the internship. Across the other EU Member States, law studies and the internship are entry requirements generically established by the applicable regulation. In some cases, the qualifying period after law studies are completed is six or seven years, including, in some cases, experience in court (e. g. Austria). Generically, in the other EU Member States an entry exam together with a competitive tender process is also required. The tender process ensures that only qualified notaries will access the professional title through a licensing scheme. This aims to protect the professional title, considering the public functions of notaries.

Requiring a law university degree limits the number of professionals that can enter the market and offer their services there. Owing to these entry restrictions, a smaller number of professionals have to serve the same number of clients. This may lead to higher prices charged for those services as demand may outstrip supply. In addition, with little or no competitive pressure, professionals have little incentive to innovate and to provide a larger range of services. According to the European Commission ("Proposal for a Directive of the European Parliament and of the Council on a proportionality test before adoption of new regulation of professions", COM(2016) 822 final, 10. 1. 2017, p. 15, para. 12), this ultimately leads to a welfare loss for businesses, including SMEs and individual consumers. E. g. , in Germany, to become a notary, one must pass a state exam, but no law degree is required beforehand, and have a minimum of two or three years' experience as notarial candidates or lawyers. Notaries are also divided into three types (the single profession notary, the advocate-notary and the state employed or civil servant notary). The advocate-notaries are the most common in Germany, since they are lawyers first of all, the notarial duty being exercised as a second profession.

The professional association should work with the legislator to set up a transparent, proportional and non-discriminatory process for identification of alternative academic routes to obtain the academic qualifications necessary for the exercise of a profession. We recommend that the profession should be opened to candidates with backgrounds other than the current compulsory university degree. The legal profession should be opened to individuals with another background than an initial university degree in law. Candidates may be required to hold a postgraduate degree in law or take a conversion course, and should undergo the same training as other legal trainees, including passing the professional exam. This will open access to more individuals with different backgrounds, allowing for more diversity in the offer of services, and more innovation.

42

Regulation as of 09/10/2017 "Internship of notaries"

Art. 8 (1)

Professional internship

The internship has a duration of 18 months, and the supervisor must have at least 5 years of experience as a notary. This is already established in Art. 27 of the "Notaries Statutory Law".

According to our understanding, the 18-month internship aims to provide the future notary with an adequate technical, scientific and ethical training deemed necessary to become a competent and responsible notary. Also, only notaries with at least 5 years of experience are qualified enough to provide suitable training and supervision to interns.

Framework Law 2/2013 establishes that professional internships in any self-regulated profession should be required only when justified by the public interest. An internship constitutes a barrier to access the profession and may reduce the number of professionals competing in the market for legal services, whenever they unduly discourage well-qualified professionals from enrolling in the internship programme, or when they unduly reduce the number of professionals who successfully complete it. Hampering competition may drive prices/fees up and may reduce the diversity and innovativeness of legal services offered in the market, generating a loss in social welfare. However, there is proportionality between the policy objective and the harm to competition on the existence of the internship per se, without taking into account its duration, subject matter, evaluation model and associated costs. The five-year requirement might be somewhat restrictive but is proportional to the policy objective. When the internship evaluation procedures is conducted solely by peers, its total independence may be compromised, as there is a latent conflict between the public interest a professional association pursues and its own private or corporate interest.

The final evaluation of the notaries' internship should be conducted by a board, independent of the professional association, which may include members of the latter but must also include professionals of recognised merit, such as law professors and magistrates, among others. We also recommend that the theoretical training should provide an e-learning option. This could lead to a reduction in internship fees, as well as reducing the opportunity costs of having to attend those training courses in person. We recommend that subjects that are part of any required university curriculum (such as a law degree, a suggested conversion or a postgraduate course) should not be included in the theoretical training offered during the first six months of the internship.

43

Regulation as of 09/10/2017 "Internship of notaries"

Art. 22, Art. 23 and Art. 26

Professional internship

To conclude the internship, a trainee is not subject to a final exam, but rather must submit a final report together with a declaration submitted by the supervisor on the trainee's aptitude. This documentation is then submitted to the Professional Association of Notaries which will then decide whether or not to grant a certificate on completion of the internship.

This professional internship aims to ensure that the different candidates acquire the adequate training, experience and ethical posture required to exercise the profession of solicitor, beyond the specialised knowledge they have acquired in any law school.

Framework Law 2/2013 establishes that professional internships in any self-regulated profession should be required only when justified by the public interest. An internship constitutes a barrier to access the profession and may reduce the number of professionals competing in the market for legal services, whenever they unduly discourage well-qualified professionals from enrolling in the internship programme, or when they unduly reduce the number of professionals who successfully complete it. Hampering competition may drive prices/fees up and may reduce the diversity and innovativeness of legal services offered in the market, generating a loss in social welfare. However, there is proportionality between the policy objective and the harm to competition on the existence of the internship per se, without taking into account its duration, subject matter, evaluation model and associated costs. The five-year requirement might be somewhat restrictive but is proportional to the policy objective. When the internship evaluation procedures is conducted solely by peers, its total independence may be compromised, as there is a latent conflict between the public interest a professional association pursues and its own private or corporate interest.

The final evaluation of the notaries' internship should be conducted by a board, independent of the professional association, which may include members of the latter but must also include professionals of recognised merit, such as law professors and magistrates, among others. We also recommend that the theoretical training should provide an e-learning option. This could lead to a reduction in internship fees, as well as reducing the opportunity costs of having to attend those training courses in person. We recommend that subjects that are part of any required university curriculum (such as a law degree, a suggested conversion or a postgraduate course) should not be included in the theoretical training offered during the first six months of the internship.

44

Professional Association of Notaries/ Table of Fees/ Internship fees

N. A.

Internship fees

The internship fees amount to EUR 750.

The fees aim to finance the administrative costs of the services provided by the Bar Association, including the costs of internship programmes.

If internship fees are too high for candidates, that might lead to fewer candidates joining the internship process and, therefore, result in a lower number of suppliers of legal services competing in the market.

We recommend that the fees required for internship be calculated using transparent, non-discriminatory and cost-based criteria.

45

Regulation from 23/04/2016 "Designation of a substitute notary"

Art. 5(1)(2)(3)

Restriction on consumer choices / Geographic limits on the exercise of the activity

Whenever there is a need to substitute a notary, the substitution is made with a notary on the waiting list (Bolsa de Notários - see Annex II of Law 155/2015). In case such a substitution cannot be carried out, the eligibility conditions to be appointed as a substitute notary are as follows: the notary's financial situation with the Professional Association must be up to date; he or she must have a notarial office licence for the municipality where the need for substitution is verified or, when the notary to be replaced as the only one in the municipality, he or she must have a notarial office licence in the any of the contiguous municipalities; must not be the subject of a still ongoing appointment process as a substitute notary; must not have renounced or given up an appointment as a substitute in the last 12 months.

These conditions are in accordance with the existing model of quotas and territorial delimitations and with the need to obtain a licence to be in charge of a notarial office. These requirements imposed by the Professional Association of Notaries are meant to control access to the profession so as to guarantee the quality of notarial services and to provide universal access to them across the national territory, regardless of a person's income. According to Arts. 1 to 3 of this Regulation, this ensures the principles of solidarity and public interest among the professionals.

There is no freedom to choose a substitute notary from another municipality, outside the subsidiary rule expressed in this provision. The existing model of quotas and territorial delimitations and the need to obtain not only a licence to practice as a notary but also a licence to be in charge of a notarial office are a way to control access to the supply of notarial services in the market. As such, these restrictions hamper competition between well-qualified professionals, leading to less innovation and diversity of services and possibly to higher prices for services when under a free pricing regime.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas or the need to obtain a notarial office licence before the establishment of oneself as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real-estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism areas, highly industrialised areas) and fully liberalise the establishment of notarial offices there; ii. In low-density areas, allow for open competition for the establishment of one or two offices per area (or whichever density is determined by the study). 3. Revisit the existing Compensation Fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practiced by both lawyers and solicitors who may practice in those areas.

46

Regulation from 23/04/2016 "Designation of a substitute notary"

Art. 6(2)(3)

Restriction on consumer choices / Geographic limits on the exercise of the activity

According to the rules for the appointment of a substitute notary, when the notary to be replaced is not the only one working within the municipality where the office is located, an invitation will be sent by the professional association to all notaries working in that same municipality to submit their candidacy as substitutes. Under exceptional circumstances, a notary already substituting for another notary, can accumulate the management of a second notarial office as a substitute notary.

These conditions are in accordance with the existing model of quotas and territorial delimitations and with the need to obtain a licence to be in charge of a notarial office. These requirements imposed by the Professional Association of Notaries are meant to control access to the profession so as to guarantee the quality of notarial services and provide universal access to them across the national territory, regardless of a person's income. According to Arts. 1 to 3 of this Regulation, this ensures the principles of solidarity and public interest among the professionals.

There is no freedom to choose a substitute notary from another municipality, outside the subsidiary rule expressed in this provision. The existing model of quotas and territorial delimitations and the need to obtain not only a licence to practice as a notary but also a licence to be in charge of a notarial office are a way to control access to the supply of notarial services in the market. As such, these restrictions hamper competition between well-qualified professionals, leading to less innovation and diversity of services and possibly to higher prices for services when under a free pricing regime.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas or the need to obtain a notarial office licence before the establishment of oneself as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real-estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism, highly industrialised areas) and fully liberalise the establishment of notarial offices there; ii. In low-density areas, allow for open competition for the establishment of one or two offices per areas (or whichever density is determined by the study). 3. Revisit the existing compensation fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practiced by both lawyers and solicitors who may also practice in those areas.

47

Regulation from 23/04/2016 "Designation of a substitute notary"

Art. 7(1)

Restriction on consumer choices / Geographic limits on the exercise of the activity

This provision defines the criteria of selection of the substitute notary, if more than one notary "expresses an interest" for the function, such as to have earned a lower average income from last semester's billing, and to run a notarial office in closer proximity to the office of the notary to be replaced, who can also guarantee better logistics and operational capacity to guard the archive coming from the latter's office.

These conditions are in accordance with the existing model of quotas and territorial delimitations and with the need to obtain a licence to be in charge of a notarial office. These requirements imposed by the Professional Association of Notaries are meant to control access to the profession so as to guarantee the quality of notarial services and provide universal access to them across the national territory, regardless of a person's income. According to Arts. 1 to 3 of this Regulation, this ensures the respect of principles of solidarity and public interest among the professionals. Hence, this provision shows a preference for substitute notaries with offices as close as possible to the office of the notary to be replaced, which reveals a geographical preference, and shows a preference for notaries earning a lower income, which amounts to an income equalising policy.

There is no freedom to choose a substitute notary from another municipality, outside the subsidiary rule expressed in this provision. The existing model of quotas and territorial delimitations and the need to obtain not only a licence to practice as a notary but also a licence to be in charge of a notarial office are a way to control access to the supply of notarial services in the market. As such, these restrictions hamper competition between well-qualified professionals, leading to less innovation and diversity of services and possibly to higher prices for services when under a free pricing regime.

The established conditions for a replacement procedure should not necessarily favour notaries operating in offices that are closer geographically to the notarial office in need of a substitute notary. Moreover, notaries from the existing waiting list should be considered as potential substitutes. Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas or the need to obtain a notarial office licence before the establishment of oneself as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real-estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism, highly industrialised areas) and fully liberalise the establishment of notarial offices there; ii. In low-density areas, allow for open competition for the establishment of one or two offices per areas (or whichever density is determined by the study). 3. Revisit the existing compensation fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practiced by both lawyers and solicitors who may also practice in those areas.

48

Regulation from 23/04/2016 "Designation of a substitute notary"

Art. 7(4)

Restriction on consumer choices / Geographic limits on the exercise of the activity

In case there is no other notary within the same municipality and none of the notaries from the contiguous municipalities express any interest in becoming substitutes, then the professional association appoints as a substitute the notary with the oldest notarial licence among those who have offices in the contiguous municipalities.

These conditions are in accordance with the existing model of quotas and territorial delimitations and with the need to obtain a licence to be in charge of a notarial office. These requirements imposed by the Professional Association of Notaries are meant to control access to the profession so as to guarantee the quality of notarial services and provide universal access to them across the national territory, regardless of a person's income. According to Arts. 1 to 3 of this Regulation, this ensures the respect of principles of solidarity and public interest among the professionals. Older licensed notaries prevail over younger ones as they may be regarded as more experienced, hence, preferable to younger ones.

This posture exacerbates the market competition restrictions introduced by the existing model with geographical restrictions, as is no freedom to choose a substitute notary from another municipality, outside the subsidiary rule expressed in this provision. The existing model of quotas and territorial delimitations and the need to obtain not only a licence to practice as a notary but also a licence to be in charge of a notarial office are a way to control access to the supply of notarial services in the market. As such, these restrictions hamper competition between well-qualified professionals, leading to less innovation and diversity of services and possibly to higher prices for services when under a free pricing regime.

Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas or the need to obtain a notarial office licence before the establishment of oneself as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real-estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism areas, highly industrialised areas) and fully liberalise the establishment of notarial offices there; ii. In low-density areas, allow for open competition for the establishment of one or two offices per area (or whichever density is determined by the study). 3. Revisit the existing compensation fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practiced by both lawyers and solicitors who may also practice in those areas.

49

Regulation 06/05/2006 "Code of discipline and ethics"

Art. 4 (1), Art. 5, Art 6 and Art. 7

Disciplinary powers / Quality standards

This provision sets the conduct standards for notaries such as loyalty and integrity, independence, urbanity and legality.

Considering the nature of the duties of a notary, this regulation lists the general principles and rules to be observed by notaries when performing their duties. Professional ethics constitutes an attempt to overcome moral hazard problems stemming from information asymmetries between clients and service providers and possible externalities. The aim is to have these ethical principles internalised by lawyers.

Some of these requirements have been given a more precise meaning by the existing Jurisprudence. However, there remains a risk of misinterpretation by the Professional Association of Notaries when exercising its disciplinary powers. This could limit the number of suppliers of notarial services, even if only temporarily, with negative impacts on prices/fees and diversity and innovation of legal services, with an ultimate social welfare loss. Moreover, these requirements are common to many professions, and there is no need to establish them by law.

We recommend that concepts such as loyalty and integrity, independence, urbanity and legality, be given a contained and circumscribed interpretation, relying on the existing jurisprudence (from the professional association itself or from the courts themselves) whenever possible. Otherwise, consider removing this provision altogether.

50

Regulation 06/05/2006 "Code of discipline and ethics"

Art. 9

Advertising

It sets various limits to the types of advertisements that are allowed. It rules out any form advertisement with the aim to solicit clients.

These restrictions aim to protect consumers against misleading or manipulative claims, due to the asymmetry of information between practitioners and consumers and can create moral hazard.

These provisions limit the freedom of professionals to advertise their own activity, which might be especially harmful for those not yet well established in the market. Advertising services to inform and potentially gain clients is crucial to promote competition and to establish a level playing field among professionals in the market. Advertising legal services may also lead to lower prices for legal services as it spurs competition among providers. Advertising can improve consumer information and reduce search costs leading to more competition among established firms. Nelson (1970; 1974) Grossman and Shapiro (1984) and Stahl (1994) suggest that advertising can have pro-competitive effects to facilitate entry. Following OECD (2007), there are no well-founded arguments against permitting advertising that is truthful. Furthermore, studies have found that restrictions on advertising lead to higher prices (OECD, 2007). In 2007, the Canadian Competition Bureau (CCB) stated that there is empirical evidence of the effect of advertising restrictions on the price and quality of professional services (including accountants, lawyers, optometrists, pharmacists and real estate agents). Restrictions on advertising increase the price of professional services, increase professionals’ incomes and reduce the entry of certain types of firms. Additionally, there is little evidence of the positive relationship between advertising restrictions and quality of services, even though it may result in fewer consumers using the service. Directive 2006/114/EC states that only misleading and unlawful comparative advertising can lead to distortion of competition within the internal market. The interdiction of misleading advertising is foreseen under national legal regimes. To go beyond the EU benchmark, in particular ruling out publicity of comparative contents in a generic way for specific professions, will have an adverse effect on consumer choice and no clear benefits.

Any prohibition or restriction to legal professions beyond the prohibition on misleading and unlawful comparative advertising (already covered in other legal texts) should be removed.

51

Ordinance 385/2004 (as amended by Ordinances 1416-A/2006 and 574/2008) "Table of fees"

Arts. 1, Art. 5(a), Art. 10, Art. 12 and Art. 13

Maximum fees

This provision determines that for notarial acts the fees corresponding to the table established in the present ordinance are charged. There are maximum prices and free prices. According to Art. 10, the maximum fees are applicable to the following acts: proxies (EUR 31. 09 plus EUR 10 for any extra claimant), wills (EUR 113. 45 or EUR 75. 63 to revoke it), and other separate instruments (EUR 31. 09), protests (EUR 7. 56), certifications and similar documents (EUR 16. 81 up to 4 pages and EUR 2. 10 for each additional page). The regime of maximum prices has been in force since 2008 (Ordinance 574/2008, which has replaced the fixed fees approved by Ordinance 384/2004 for maximum prices in almost every case).

The existence of maximum prices in exclusive notarial activities intends to guarantee universal access to these services independently of the clients’ income level. Notary services exhibit characteristics of public goods, which can lead to positive externalities. Because public goods tend to be under-produced, the state usually establishes regulation on the provision of such services. Additionally, it is claimed that price control guarantees a notary's impartiality and independence in the provision of a public service, as they wouldn't have to negotiate prices with their clients.

Maximum and fixed price regimes limit the incentives to compete and innovate. Even though maximum price regimes allow for price competition, they often serve as a focus point to co-ordinate prices. In a competitive market, prices tend to reflect more closely the costs of the services provided, and do not necessarily jeopardise the quality of those services. In its Recommendation 1/2007, the AdC proposed the adoption of a system of maximum prices during a transitional period for services which remain within the exclusive competence of notaries and whose social relevance justified the need to guarantee universal access. This regime would be phased out as the quantitative restrictions imposed by the quota system were phased out. Other alternatives, rather than fixing maximum prices, may be adopted to overcome any lack of information from the demand side, such as the publication of historical or survey-based price information by independent parties, e. g. consumer associations. This would improve transparency and allow greater competition in prices. The same principle applies when the regulator opts for establishing maximum prices, based on the attempt to avoid excessive prices charged to consumers, in particular when the regulator wants to guarantee universal access to notarial services.

The maximum prices regime should be revisited, with the aim to phase them out as appropriate. This view is also echoed by the Portuguese Competition Authority (AdC) in its Recommendation 1/2007.

52

Ordinance 385/2004 "Table of fees"

Art. 3(2)

Professional fees

Notaries must charge professional fees to their clients with moderation, taking into account the time spent, the difficulty of the subject, the importance of the service provided and the socio-economic context of the clients. According to this provision, those rules apply if the amount of professional fees is freely established. Note that Art. 17 para. 3 of Decree-law 26/2004 (as amended by Law 51/2004 and Decree-law 15/2011 and republished by Law 155/2015 as Annex II) establishes the same rule, but it is also applicable to variable prices.

The criteria to fix professional fees, whether they are free or variable, is established to protect clients from excessive prices, due to the existing information asymmetry between the client and the notary, which could lead to an outcome of moral hazard. On the one hand, notarial services exhibit characteristics of public goods, which can lead to positive externalities. Because public goods tend to be under-produced, the state usually establishes regulation on the provision of such services. On the other hand, as referred to above, such professional services tend to create difficulties for consumers to observe and judge the quality of work (information asymmetries). Because the quality of work is difficult to assess, price regulation tends to prevent a deterioration in the quality of the services provided by the professionals.

Although the identification of objective criteria used to set fees (by solicitors) may be advantageous when the Professional Associations is required (by clients) to revise or arbitrate on the fees charged, this list should not be exhaustive. This provision may restrict the contractual freedom between solicitor and client, when choosing the payment format for services rendered, as well as the criteria to determine the solicitor's fees. This restriction may reduce the scope for different solicitors to compete for clients, more so if the Bar Association adopts an active posture regarding how its members’ services should be paid for. Hence, it may hamper competition in the market for legal services.

This legal provision should be modified to allow the use of more specific and objective criteria based on professional association previous decisions.

53

Ordinance 1535/2008 "Regulation of Electronic Certificates"

Art. 13(2)

Quality standards

The entities that make the electronic deposit of private documents must be authenticated by means of a digital certificate proving the professional quality of the user. Only digital certificates of lawyers, notaries and solicitors whose use for professional purposes is confirmed through electronic lists of certificates, made available respectively by the Bar Association, the Public Association of Notaries and the Public Association of Solicitors (and Enforcement agents), will be accepted.

According to the stakeholders the official certification of online documents serves the public interest. Hence, these extra requirements are needed to ascertain the authentication of such documents by notaries.

Competition will be enhanced by enlarging the type of professionals and entities that are entitled to deposit and certify online documentation. Prices will be lower, and the diversity and innovativeness of these services will be enhanced, benefitting final consumers.

This provision should be modified to enable other professionals and entities to store documents electronically. These other professionals and entities are to be defined by the Ministry of Justice together with other relevant entities. Their electronic access certificates can be issued by the Ministry of Justice itself.

54

Ordinance 307/2009 "Registration of proxies and respective extinctions"

Art. 5(2)

Quality standards

This Ordinance establishes the regime for the registration of proxies and respective terminations and the terms in which electronic circulation of data and documents is processed. Art 5(2) states that for the purpose of electronic registration of proxies, only electronic access certificates issued by the respective professional associations for notaries, lawyers and solicitors are accepted.

According to the stakeholders the official certification of online documents serves the public interest. Hence, these extra requirements are needed to ascertain the authentication of such documents by notaries.

Competition will be enhanced by enlarging the type of professionals and entities that are entitled to deposit and certify online documentation. Prices will be lower, and the diversity and innovativeness of these services will be enhanced, benefitting final consumers.

This provision should be modified to enable other professionals and entities to store documents electronically. These other professionals and entities are to be defined by the Ministry of Justice together with other relevant entities. Their electronic access certificates can be issued by the Ministry of Justice itself.

55

Ordinance 55/2011 "Conditions for authorisation by notaries of practice by non-notary workers"

Art. 2

Quality standards

This provision establishes the conditions under which a notary may authorise the practice of certain acts by his employees, as well as the terms on which registration of that authorisation takes place. The authorisation to practice certain acts or certain categories of acts may be granted to an official of the registries and notariate who has opted for the new notary regime; to the holder of a university law degree with relevant experience in the notariate; an employee who has worked for a notarial office for more than two consecutive years; an employee who has been approved by the Professional Association of Notaries in a specific examination on the subject, i. e. , the practice of such specific acts.

To grant authorisation to perform certain specific notarial acts which serve a public interest by certain professionals who are not licensed as notaries, certain requirements must be fulfilled. These requirements are regarded as necessary for the state to validate the legal standing of these professionals and the specific acts they are authorised to perform.

This provision limits the type of professionals that can be granted with the legal capacity to perform such specific notarial acts. Competition would be enhanced by enlarging the set of professionals who could be authorised by a notary to perform such acts, which would lead to lower prices and greater diversity and innovation in the notarial services being delivered. In any case, this provision refers to authorisations that will have to be granted by a notary. Competition would be enhanced if notarial acts could be performed by other qualified professionals (besides notaries, lawyers and solicitors), and different entities, without having to obtain authorisation from a notary.

The overall technical study on the way notarial services are currently organised in Portugal should address the issue of enlarging competencies to perform notarial acts to a wider set of professionals and entities.

56

Ordinance 9/2013 "Regulation of eviction proceedings"

Art. 22(2)(a)

Restriction on consumer choices / Geographic limits on the exercise of the activity

This ordinance regulates matters pertaining to the so-called special eviction procedure. In a special eviction procedure, the petitioner can designate a notary to conduct the eviction proceedings, but this notary must hold a professional address in the municipality where the property to be vacated lies, or exercise jurisdiction in that municipality by virtue of authorisation granted pursuant to Art. 7(3) from Decree-Law no. 26/2004. This provision states that exceptionally, the jurisdiction of a notary may be exercised in more than one contiguous territorial area, provided the circumstances so warrant, by order of the Minister of Justice, after a hearing of the Professional Association of Notaries.

It is our understanding that designation of a notary (or a enforcement agent) aims to provide legal certainty and legitimacy to these professionals endowed with the power to conduct eviction proceedings. The geographical restrictions are related to the territorial competence of the courts for the judicial claims.

On one hand, one may ask why there is a need to designate a notary or a enforcement agent to carry out eviction proceedings. In England and Wales, standard possession orders can be filled online, as in Portugal, if certain conditions are met. There is no need to appoint a notary or a enforcement agent to conduct eviction processes. The petitioner simply has to fill in, either on paper or online, the standard possession claim form and e-mail it or post it to the court that deals with housing re-possession. This obligation to designate a notary and enforcement agent leads to an increase in the costs paid by the petitioner. Only when tenants do not leave the property by the date given in an order for re-possession can there be need to obtain from the court a warrant of re-possession to arrange for a enforcement agent to evict them. On the other hand, the obligation to designate a notary with an address in the municipality in question reduces the number of providers and might lead to an increase in costs and reduction of efficiency. In fact, territorial delimitations hamper competition between service providers to the detriment of consumer welfare.

The overall technical study on the way notarial services are currently organised in Portugal must address the way eviction proceedings are carried out to avoid the existing geographic restrictions which bar a larger number of notaries from carrying out these proceedings. A greater use of online services should be promoted so as to speed up procedures. Following the Portuguese Competition Authority's Recommendation 1/2007 and more recent international developments, such as the legal reform in France known as the Macron Law, an overall technical study on the current organisation of notarial services in Portugal is necessary. The objectives of such a study are to explore alternatives that would increase professional mobility and clients’ freedom of choice, while still guaranteeing universal access to notarial services. Therefore it is recommended to:1. Abolish the licence quotas or the need to obtain a notarial office licence before the establishment of oneself as a notary. Or alternatively, 2. Study the potential demand for notarial services, taking into account: population density; economic activity, dynamism of the local real-estate market; demand for other services provided by notaries; existence of alternative internet solutions. Based on the data: Identify areas that can sustain competition in notarial activities (typically Lisbon, Porto, Faro, high-tourism areas, highly industrialised areas) and fully liberalise the establishment of notarial offices there; ii. In low-density areas, allow for open competition for the establishment of one or two offices per areas (or whichever density is determined by the study). 3. Revisit the existing compensation fund and find alternative ways to guarantee the delivery of notarial services in low-density areas, taking into account the fact that many notarial acts can also be practiced by both lawyers and solicitors who may also practice in those areas.

57

Ordinance 9/2013 "Regulation of eviction proceedings"

Art. 24(2)(3)(5)

Restriction on consumer choices / Geographic limits on the exercise of the activity

The appointment by the public office for eviction proceedings ("BNA") of a enforcement agent or a notary to participate in special eviction procedures requires that these professionals hold a professional address in the municipality where the property to be vacated is located. Preference will be given to those enforcement agents and notaries who have been assigned fewer special eviction procedures.

This requirements seem to follow directly from the model of quotas and territorial delimitations that rule the notariate. Preference will be given to those enforcement agents and notaries who have been assigned fewer special eviction procedures to avoid overburdening professionals and to balance income levels amongst them. The geographical restrictions are related to the territorial competence of the courts for the judicial claims.

The existing model of quotas and territorial delimitations hampers competition between well-qualified professionals, and can lead to less innovation and diversity of services and possibly to higher prices for services when under a free pricing regime.

This legal provision should be removed.

58

Ordinance 278/2013 (as amended by Ordinance 46/2015) "Regulation of the inventory process"

Art. 18(2)(3)

Professional fees / Inventory process

The fees of notaries for the inventory process and its incidents are set out in the tables in Annexes I and II to this ordinance and must be paid by all interested parties. ("Incidents" are questions and secondary proceedings concerning the main proceedings, which must be settled before the final decision. )

Regulation of prices related to the inventory process must be justified on public interest grounds, considering this was a competence of the courts. It is our understanding that this price regulation aims to avoid the practice of excessive prices, particularly when there may be serious information asymmetry between the notary and the client. Moreover, it is meant to guarantee access to inventory services by lower income people. However, we should note that this provision does not seem to follow what is established in Ordinance 574/2008. In fact, its recital states that fees charged for acts practiced by notaries under the Notaries Statutory Law would be subject either to maximum prices or to prices freely set by the professionals. In the present case (Ordinance 278/2013, Art. 1(g)), for each inventory value, the fee to be charged by the notary who carries out its inventory process is fixed.

Annex I defines fixed prices/fees that increase with the value of the inventory. Annex II fixes prices for some services and defines price intervals for other services. Price regulation should be considered anti-competitive and incompatible with the exercise of a liberal profession. By hampering competition, it may imply higher prices are charged than if notaries were free to compete on prices. It may also reduce incentives to innovate the services provided.

The overall technical study on the way notarial services are currently organised in Portugal must address the existing regime of fixed fees for inventory procedures. This fixed fee regime should be revisited with the aim to gradually phase it out as appropriate.

59

Ordinance 278/2013 (as amended by Ordinance 46/2015) "Regulation of the inventory process"

Art. 18(4)

Professional fees / Inventory process

For cases and incidents with more complexity, the already-defined fees are applied by the judge, at the request of the notary who has conducted the inventory process.

The objective is to give some flexibility to notaries to charge more in complex cases, assuming respect for the principle of justice and equity among professionals. The option taken is the decision by the Court, considering its authority to establish a fair price and also considering that this is the option which could better ensure the public interest.

Notaries are not free to establish the prices for their services, although this rule gives some flexibility that allows them to charge more for more complex services. However, it is the Court that will fix the final fee and not the notary. Hence, notarial fees for inventory processes, are still not freely set, thus hampering competition.

The overall technical study on the way notarial services are currently organised in Portugal must address the existing regime of fixed fees for inventory procedures. This fixed fee regime should be revisited with the aim to gradually phase it out as appropriate.

60

Ordinance 278/2013 (as amended by Ordinance 46/2015) "Regulation of the inventory process"

Art. 18(5)

Professional fees / Inventory process

In the case of incidents, the fixing of the amount of fees listed in Annex II as a variable, is done by the notary.

Fixing price intervals for certain types of notarial acts might be justified on public interest grounds. It has been argued by the legislator that it prevents the practice of excessive prices and guarantees universal access of these services to all users.

Although the option of defining price intervals is not as restrictive as fixing prices, it still limits the notaries' freedom to set prices for the services they provide. Hence, to define price intervals still hampers full competition among notaries.

The overall technical study on the way notarial services are currently organised in Portugal must address the existing regime of fixed fees for inventory procedures. This fixed fee regime should be revisited with the aim to gradually phase it out as appropriate, including the revision or removal of the existing instalment payment scheme.

61

Ordinance 278/2013 (as amended by Ordinance 46/2015) "Regulation of the inventory process"

Art. 18(6)-(10)

Professional fees / Inventory process

These provisions set the regime for the payment of fees to notaries in inventory procedures, in three different mandatory instalments, and the application of other rules.

These provisions establish that payments to notaries are made in instalments, and aims to guarantee that they will be paid at each stage of the process, avoiding delays. On the other hand, it allows clients to split their payments over time. Clients can file a complaint against the fees charged by the notary.

It is a rigid system, not giving notaries and their clients the freedom to contract other modes of payment and deadlines. In this sense, it hampers competition between notaries over terms and modes of payment, even if the total fee is defined at the outset by this same ordinance.

The overall technical study on the way notarial services are currently organised in Portugal must address the existing instalment regime for the payment of inventory fees. In fact, the current regime may be too inflexible for at least some clients, and could be made more adaptable whenever a client demonstrates his difficulty in sustaining the instalment regime as defined.

62

Ordinance 278/2013 (as amended by Ordinance 46/2015) "Regulation of the inventory process"

Art. 18(11)

(12)(13)

Professional fees / Inventory process

After complaining to the notary about the amount of the payment, if the notary does not change it, the interested party may ask the judge to fix the amount of the fees, and the interested party does not pay until this decision. The notary may be subject to the payment of a penalty.

After a client files a complaint against the fees charged, the notary should ask the court to rule on those fees. Payment are due only after the court's decision. If the decision is against the complainant, the court can impose a fine on the notary or on his client (the complainant).

That the Court can impose a fine on the complainant, if it finds the complaint unfounded, is certain to discourage filing complaints against what may be perceived as excessive fees. In turn, this may hamper competition between notaries, as clients may fear submitting a complaint. It may be akin to tacit collusion between notaries, as they may feel more comfortable charging higher fees. The possibility the complainant has for submitting an appeal to the appropriate court may by itself not mitigate the discouragement to file a complaint in the first place, as such appeals take time to be concluded and are onerous.

The overall technical study on the way notarial services are currently organised in Portugal, should remove the possible imposition of a fine on the complainant by the court in those cases where the complaint is deemed unfounded.

63

Ordinance 278/2013 (as amended by Ordinance 46/2015) "Regulation of the inventory process"

Art. 19

Professional fees / Inventory process

This provision sets the regime for the payment of fees to notaries in inventory procedures in three different mandatory instalments, defining which party is responsible for each instalment.

This provision establishes who is responsible for the payment of each instalment, and aims to guarantee that notaries will be paid at each stage of the process, avoiding delays. On the other hand, it allows clients to split their payments over time.

This provision hardens the payment regime to be followed during an inventory process. It further hampers competition between notaries over terms and modes of payment, even if the total fee is defined at the outset by this same ordinance.

The overall technical study on the way notarial services are currently organised in Portugal must address the existing instalment regime for the payment of inventory fees. In fact, the current regime on who has to pay what and when, may be too inflexible for at least some clients, and could be made more adaptable whenever a client demonstrates his difficulty in complying with the instalment regime as defined.

64

Ordinance 278/2013 (as amended by Ordinance 46/2015) "Regulation of the inventory process"

Art. 20

Professional fees / Inventory process

This provision regulates deadlines and the different modes of payment of the three instalments, already defined in previous articles.

It is our understanding that this provision aims to guarantee there will be no doubt whatsoever as to how and when each instalment is to be paid. This avoids situations where the notary would carry on with an activity that would not be paid.

This provision hardens the relation between a notary conducting an inventory process and his client(s), as if attempting to eliminate any unforeseen event or disagreement between the two parties. It removes any freedom the two parties may want to have to conduct their business in a way they see fit, including on modes of payment, instalments and deadlines. In this sense, it hampers competition between notaries over terms and modes of payment, even if the total fee is defined at the outset by this same ordinance.

The overall technical study on the way notarial services are currently organised in Portugal must address the existing regime of fixed fees for inventory procedures, including the modes of payment established by law. In fact, the current regime on who has to pay what, when, and how, may be too inflexible for at least some clients, and could be made more adaptable whenever a client demonstrates his difficulty in complying with the instalment regime as defined.

65

Ordinance 278/2013 (as amended by Ordinance 46/2015) "Regulation of the inventory process"

Art. 24

Professional fees / Inventory process

This provision pertains to the regulation of complaints by the client(s) over the final bill of fees and expenses on the basis of non-compliance with Law 23/2013 or with this ordinance. The notary revises the final bill or can send it to court for a final decision. The judge may order the notary to pay a fine if the complaint is upheld, or the client if the complaint is deemed unfounded.

The objective is to prevent notaries from charging excessive prices to clients. The client can present a complaint to the notary and the latter can either accept it or appeal to the Court. Both parties are subject to a fine by the Court. This last step is somewhat worrisome as it may discourage either of the two parties to exercise a right which is at the core of a contractual freedom. In this sense it may hamper competition by raising the possibility of punishing complainants.

That the Court can impose a fine on the complainant, if it finds the complaint unfounded, is certain to discourage filing complaints against what may be perceived as excessive fees. In turn, this may hamper competition between notaries, as clients may fear submitting a complaint. It may be akin to tacit collusion between notaries, as they may feel more comfortable charging higher fees. The possibility the complainant has for submitting an appeal to the appropriate court may by itself not mitigate the discouragement to file a complaint in the first place, as such appeals take time to be concluded and are onerous.

The overall technical study on the way notarial services are currently organised in Portugal, should remove the possible imposition of a fine on the complainant by the court in those cases where the complaint is deemed unfounded.

Technical and scientific professions: Common provisions

No

No and title of Regulation

Article

Thematic Category

Brief description of the potential obstacle

Policy maker's objective

Harm to competition

Recommendation

1

Law 41/2015 "Legal regime concerning the carrying out of activities in the construction sector"

Art. 6 and Annex I

Reserved activities

Certain activities in the construction sector can only be carried out by specific professionals and, in particular, by specific architects, engineers and/or technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. architects, engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

2

Law 15/2015 "Requirements necessary to access to and carry out the activity of entities and professionals which operate in the field of petroleum products"

Art. 12, Art. 20, Art. 27, Art. 32, Art. 44, Art. 46 and Art. 47

Reserved activities

The activity of entities and professionals which operate in the field of petroleum products can only be carried out by specific professionals and, in particular, by specific engineers and / or technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

3

Law 14/2015 "Requirements necessary to access to and carry out the activity of entities and professionals responsible for electrical systems"

Art. 5, Art. 7, Art. 19 and Art. 20

Reserved activities

The activity of entities and professionals responsible for electrical systems can only be carried out by specific professionals and, in particular, by specific engineers and / or technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

4

Law 65/2013 "Requirements necessary to access to and carry out the activity of entities that provide maintenance of lifting equipments services and entities that inspect those equipments and their respective professionals"

Art. 6, Art. 18 and Art. 38

Reserved activities

The activity of entities and professionals that provide maintenance of lifting equipments services and entities that inspect those equipments can only be carried out by specific professionals and, in particular, by specific engineers and / or technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

5

Law 58/2013 "Requirements necessary to access to and carry out the activity of qualified expert in the field of energy certification and of technician in the fields of construction and maintenance of buildings and systems"

Art. 2

Reserved activities

The activity of qualified expert in the field of energy certification and of technician in the fields of construction and maintenance of buildings and systems can only be carried out by specific professionals and, in particular, by specific architects, engineers and / or technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. architects, engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

6

Law 7/2013 "Regime concerning the access to and carrying out of certain activities in the scope of the Energy-Intensive Consumption Management System and of the regulation on the management of the energy consumption in the transport sector"

Annex I - Art. 3 and Art. 4 and Annex II - Art. 3, Art. 4 and Art. 19

Reserved activities

Certain activities in the scope of the Energy-Intensive Consumption Management System and of the regulation on the management of the energy consumption in the transport sector can only be carried out by specific professionals and, in particular, by specific engineers and/or technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. , engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

7

Law 31/2009 (last modification by Law 40/2015) "Legal regime concerning the professional qualifications required for carrying out certain activities related to specific operations and works and the professional duties and responsibilities applicable in that scope"

All

Reserved activities

Certain activities related to specific operations and works can only be carried out by specific professionals and, in particular, by specific architects, engineers and / or technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. architects, engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

8

Decree-Law 266-B/2012 "Regime concerning the determination of the level of conservation of urban buildings and autonomous fractions for the purposes foreseen in the scope of urban lease, urban rehabilitation and building conservation"

Art. 3 (3)

Methods of selecting professionals

The designation of the technician responsible for determining the level of conservation (strength and safety) of an urban building or an autonomous fraction for the purposes foreseen in the scope of urban lease, urban rehabilitation and building conservation is carried out through a draw among the architects, engineers and technical engineers who are included in a list of qualified and available professionals, developed by the respective professional associations.

The policy objective of the provision is to ensure a level playing field among all professionals qualified and available for the carrying out of works.

The use of a draw to choose the professional responsible for determining the level of conservation of a construction does not guarantee that the outcome of the draw will correspond to the decision that the entity interested in the service would take if it could choose the professional freely. In fact, the individual selected to carry out that duty might not correspond to the individual better positioned to do such, given his suitability for the specific characteristics of the construction in question and the price he would charge to provide the service. Additionally, the use of the above-mentioned procedure removes the incentives of professionals for establishing lower prices and better services. In fact, architects, engineers and technical engineers who are included in the lists of professionals suitable for the proper determination of the level of conservation of a construction know that the characteristics of and the price applicable to the services provided by them do not influence their probability of being chosen. As a result, the provision leads to an unsubstantiated and, consequently, avoidable increase in the costs incurred by entities interested in determining the level of conservation of a construction. This is driven by the inability (resulting from external and, in particular, regulatory factors) of those entities to choose professionals who apply lower prices or are better suited for carrying out the specific service to be provided. That, in turn, prevents professionals from competing with each other and, thus, discourages the ones that incur lower costs from passing on those savings to the entities in question. Nevertheless, a minimum quality of the service provided is, in any case, ensured by the use of a list of professionals suitable for the proper determination of the level of conservation of a construction developed by the respective professional associations.

The procedure for choosing the professional responsible for determining the level of conservation (strength and safety) of a structure should be changed from a draw to a tender (competitive award) procedure. The implementation of this recommendation will encourage architects, engineers and technical engineers who are included in the lists of professionals suitable for the proper determination of the level of conservation of a construction to compete with each other and will, consequently, create cost savings for entities interested in that service.

9

Decree-Law 90/2010 "Regulation concerning the installation, operation, repair and alteration of pressure equipments"

Annex - Art. 18 (2) and Annex - Annex II - Art. 5 (e)

Reserved activities

The development of projects concerning the repair and alteration of pressure equipments and the signing of a formal declaration confirming responsibility for the installation of those equipments can only be carried out by specific professionals and, in particular, by specific engineers and / or technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

10

Decree-Law 123/2009 (last modification by Decree-Law 92/2017) "Regime concerning the construction of infrastructure capable of holding electronic communications networks, the setting up of those networks and the construction of telecommunications infrastructure"

Art. 37 (1), Art. 67 (1) and Art. 67 (2)

Reserved activities

The development of technical projects concerning the setting up of telecommunications infrastructure in certain spaces can only be carried out by specific professionals and, in particular, by specific engineers and / or technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

11

Decree-Law 152/2005 (last modification by Decree-Law 145/2017) "Rules, conditions, principles and procedures applicable in the scope of recovery for recycling, reclamation and destruction of substances that deplete the ozone layer contained in specific equipments and of maintenance and servicing of those equipments"

Art. 5 (1) (a) and Art. 5 (3)

Reserved activities

Certain activities related to the recovery for recycling, reclamation and destruction of substances that deplete the ozone layer contained in specific equipments and to the maintenance and servicing of those equipments can only be carried out by specific professionals and, in particular, by specific engineers and / or technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

12

Decree-Law 379/80 (last modification by Decree-Law 98/2001) "Rules, conditions, principles and procedures applicable in the scope of the construction and operation of the electrical system of vessels"

Art. 3

Reserved activities

Certain activities in the scope of the construction and operation of the electrical system of vessels can only be carried out by specific professionals and, in particular, by specific engineers and / or technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

13

Decree-Law 39600 (last modification by Decree-Law 39847) "Professional qualifications required for signing projects concerning new constructions and significant reconstructions to be implemented in certain zones"

All

Reserved activities

The signing of projects concerning new constructions and significant reconstructions to be implemented in certain zones can only be carried out by specific professionals and, in particular, by specific architects and / or engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. architects, engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

14

Decree-Law 23:511 "Professional qualifications required for developing water supply and construction of sewage systems projects of City Councils and projects concerning works of urban and rural improvements"

All

Reserved activities

The development of water supply and construction of sewage systems projects of City Councils and of projects concerning works of urban and rural improvements can only be carried out by specific professionals and, in particular, by specific architects, engineers and / or technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. architects, engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

Technical and scientific professions: Architects

No

No and title of Regulation

Article

Thematic Category

Brief description of the potential obstacle

Policy maker's objective

Harm to competition

Recommendation

1

Decree-Law 176/98 (last modification by Law 113/2015) "Bylaws of the Professional Association of Architects"

Annex - Art. 3 (2)

Professional associations

The Professional Association of Architects shall carry out: (i) tasks in the scope of the representation of the architects before others; and(ii) tasks in the scope of the regulation of the profession of architect.

The policy objective of the provision seems to be to ensure suitability of the regulation of the profession of architect for the needs of businesses and consumers and, also, of professionals.

The regulation of the profession of architect is controlled by the Professional Association of Architects and, consequently, by architects, given that the governing bodies of the professional association in question are made entirely by those professionals. Since the exercise of the profession of architect involves very specific educational and training qualifications, that is expected to increase the quality of regulation. Consequently, the provision can be considered to indicate that the policy objective underlying it is fully achieved. However, the same situation allows conflicts of interest inherent in situations in which architects are, simultaneously, regulators and regulated entities. Hence, the provision may make applicants for the professional title of architect incur unnecessary costs. In fact, the provision leaves to the discretion of the Professional Association of Architects the definition of rules, conditions, principles and procedures applicable in the scope of the profession of architect and, consequently, requires applicants for the professional title of architect to comply with requirements that are not clearly motivated, potentially reducing the supply of architects available to businesses and consumers.

We recommend that the regulatory function should be separated from the representative function for self-regulated professional associations, either through the creation of an over-arching supervisory body by sector or trade, or through the creation of a supervisory body inside the current professional orders with the necessary "Chinese walls". The supervisory body takes on the main regulation of the profession such as access to the profession and similar functions. The board of the regulatory body will include not only representative of the profession but also lay people, including high-profile experienced individuals from other regulators, representatives of consumer organisations and academia.

2

Decree-Law 176/98 (last modification by Law 113/2015) "Bylaws of the Professional Association of Architects"

Annex - Art. 5 (1)

Academic qualifications

Individuals registered in the Professional Association of Architects as a full member shall have, at least, a university degree in Architecture.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

The provision limits the academic qualifications necessary for practising the profession of architect and the acceptable routes to obtain them. Hence, the provision may make professionals incur unnecessary costs. In fact, the provision prevents individuals that have an academic background other than a university degree in architecture which ensures their technical suitability for performing the tasks assigned to them from becoming architects in Portugal and, consequently, reduces the supply of those professionals available to businesses and consumers. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. These effects are aggravated by the (additional) existence of restrictions on entry into a certain profession.

The technical professional associations should work with the legislator to set a transparent, proportional and non-discriminatory process for identification of alternative routes to obtain the strictly necessary or adequate qualifications for the exercise of a technical profession. The specific technical profession should be open to professionals with different academic backgrounds. These alternative routes would promote vertical conversions (e. g. migration from an engineering university background to an architecture degree) and would be applied through a conversion course or postgraduate studies. Those candidates should undergo the same on-the-job training or professional exams as others.

3

Decree-Law 176/98 (last modification by Law 113/2015) "Bylaws of the Professional Association of Architects"

Annex - Art. 8 (1) and Art. 8 (2)

Professional internship

Applicants for the professional title of architect shall have successfully completed a professional traineeship which shall last 12 months.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

The provision determines the need for architects to carry out a professional internship and, thus, it may increase costs for professionals. However, the work-based practical experience gained by applicants for professional titles throughout a professional internship is expected to have a direct and significant positive impact on the level of safety of the services provided by those professionals. In fact, one of the main variables that influence the level of safety of the services provided by professionals is the fulfilment by them of the minimum knowledge requirements necessary for practising their respective profession and, intrinsically, their ability to apply this knowledge. Additionally, the duration of the professional internship defined in the provision conforms with the respective duration foreseen in Law 2/2013 (Art. 8 (2) (a)) (at most, 18 months).

No recommendation.

4

Decree-Law 176/98 (last modification by Law 113/2015) "Bylaws of the Professional Association of Architects"

Annex - Art. 44 (1) and Art. 44 (2)

Reserved activities

The development and assessment of architectural studies, projects and plans can only be carried out by architects.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. architects, engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

5

Decree-Law 176/98 (last modification by Law 113/2015) "Bylaws of the Professional Association of Architects"

Annex - Art. 47 (1) and Art. 47 (2)

Partnership and ownership of professional firms

Partners of professional firms of architects shall be:(i) architects established in Portugal; (ii) professional firms of architects; or(iii) associations of professionals equivalent to the profession of architects established in a country from the EU or the EEA other than Portugal whose majority of capital and voting rights is held by those professionals.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

The provision prevents individuals other than architects from owning professional firms of architects or holding the majority of those firms' capital and voting rights. Hence, the provision may make businesses incur unnecessary costs. In fact, the provision: (i) reduces the sources of investment available to professional firms of architects and, consequently, unduly hinders them from entering the market or operating in it; and (ii) prevents entities with business knowledge from participating in the decision-making process of professional firms of architects and, as such, may prevent decisions by them that are duly weighed and based on all relevant information.

Ownership/partnership of all professional firms should be opened to other professionals and non-professionals. We also recommend that other professionals and non-professionals be allowed to hold a majority of a professional firm’s social capital, together with a majority of voting rights.

6

Decree-Law 176/98 (last modification by Law 113/2015) "Bylaws of the Professional Association of Architects"

Annex - Art. 47 (7)

Management of professional firms

Members of the executive body of the professional firms of architects, regardless of their capacity as members of that Professional Association, shall respect the ethical principles and rules, the technical and scientific independence and the guarantees applicable to architects foreseen in laws and regulations.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

The provision prevents individuals other than architects from managing professional firms of architects. Hence, the provision may make businesses incur unnecessary costs. In fact: (i) the managers of professional firms of architects defined in the provision differ from the respective managers foreseen in Law 2/2013 (Art. 27 (3) (b)) and in Directive 2008/57/EC (Art. 13 (4) (first sentence)) (only one of the executive managers or administrators of professional firms has to be registered in the respective professional association); and (ii) the provision prevents individuals with business knowledge from participating in the decision-making process of professional firms of architects and, as such, may prevent decisions by them that are duly weighed and based on all relevant information.

We recommend that a separation between ownership and management be allowed in all professional firms and that their management may include non-professionals.

7

Decree-Law 176/98 (last modification by Law 113/2015) "Bylaws of the Professional Association of Architects"

Annex - Art. 47 (8)

Multidisciplinarity in professional firms

Professional firms of architects can carry out activities other than the activity of architect as long as they are not incompatible with that activity and for which the Bylaws of the Professional Association of Architects do not foresee any impediment.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

The provision, in itself, does not prevent multidisciplinary activities in professional firms of architects, given that it allows them to carry out activities other than the activity of architect. However, incompatibilities and impediments related to the profession of architect foreseen in the regulations may lead to an incompatibility between certain activities and the activity of architect and, consequently, may prevent professional firms of architects from carrying out those activities. As a consequence, firms are unduly hindered from entering the market or operating in it. In fact, that situation leads to: (i) a reduction of the potential sources of revenue available to firms and, as such, a reduction of their potential to recover costs; and (ii) an increase in the costs incurred by firms, in particular through the limitation or prevention of their ability to exploit economies of scale and economies of scope. This leads to higher prices and less diversity and innovation (including through the use of new techniques) in the scope of the activity of architect and, also, of the activities legally considered to be incompatible with it, with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered by professional firms of architects and the type of services demanded from them. In fact, some businesses and consumers prefer to have only one service provider than to have several service providers (each one providing services in the scope of a specific profession).

No recommendation on the legal principle foreseen in this specific provision. However, we recommend that the legislator conducts a technical study to assess the proportionality of incompatibilities and impediments to pursue the exercise of a self-regulated profession that may be preventing the offer of multidisciplinary activities within the same professional firm, taking into consideration the policy objective. In case they are considered not to be proportional, they should be abolished.

8

Decree-Law 176/98 (last modification by Law 113/2015) "Bylaws of the Professional Association of Architects"

Annex - Art. 52 (b)

Ethical principles

Architects must show themselves worthy of their responsibilities.

The policy objective of the provision seems to be to ensure suitability of professional services for the needs of businesses and consumers.

The lack of clear and specific language for the rules and principles to be followed by architects and to be monitored by the Professional Association of Architects allows these entities to be more arbitrary in their decisions. This makes it more difficult for potential and existing professionals to obtain accurate and timely information concerning the relevant operational context. It also creates regulatory uncertainty for those individuals and may lead to an unsubstantiated and, consequently, avoidable increase in the costs they incur. In fact, such a situation: (i) allows the Professional Association of Architects to act differently in analogous circumstances, allowing it to apply dissimilar conditions to equivalent situations, potentially placing some professionals at a competitive disadvantage; and (ii) results in a reduction in the necessary and adequate information available to professionals to decide and, in particular, to develop their business plans.

The provision should be amended in such a way as to use as much clear and specific language as possible. Moreover, the provision should be expressly revoked, if it has been superseded in its substance by more recent legislation, has lost its usefulness or has become obsolete as a result of technological developments.

9

Decree-Law 176/98 (last modification by Law 113/2015) "Bylaws of the Professional Association of Architects"

Annex - Art. 56 (2) (e)

Ethical principles

Architects should refuse financial conditions that do not allow them to provide satisfactory professional services.

The policy objective of the provision seems to be to ensure suitability of professional services for the needs of businesses and consumers.

The lack of clear and specific language for the rules and principles to be followed by architects and to be monitored by the Professional Association of Architects allows these entities to be more arbitrary in their decisions. This makes it more difficult for potential and existing professionals to obtain accurate and timely information concerning the relevant operational context. It also creates regulatory uncertainty for those individuals and may lead to an unsubstantiated and, consequently, avoidable increase in the costs they incur. In fact, such a situation: (i) allows the Professional Association of Architects to act differently in analogous circumstances, allowing it to apply dissimilar conditions to equivalent situations, potentially placing some professionals at a competitive disadvantage; and (ii) results in a reduction in the necessary and adequate information available to professionals to decide and, in particular, to develop their business plans.

The provision should be amended in such a way as to use as much clear and specific language as possible. Moreover, the provision should be expressly revoked, if it has been superseded in its substance by more recent legislation, has lost its usefulness or has become obsolete as a result of technological developments.

10

Decree-Law 176/98 (last modification by Law 113/2015) "Bylaws of the Professional Association of Architects"

Annex - Art. 57 (c)

Ethical principles

Architects must abstain from competing based solely on remuneration.

The policy objective of the provision seems to be to ensure suitability of professional services for the needs of businesses and consumers.

The price applicable to the provision of a service is one of the main factors used by businesses and consumers to decide on the supplier to use and, hence, on the service to purchase. Nevertheless, that decision may also depend on other factors, which tend to become more relevant in cases in which the services available to purchase are identical, in terms of their relevant characteristics, to each other. Services provided by architects are, by nature, different depending on the architect that provides them. In fact, each architect has its own esthetical style and, because of that (if not for other reasons), his work will necessarily differ from the work of other architects, even if the service requested of all of them is the same. Given that, architects, on their own and, as such, without need for external intervention, will tend to not compete based solely on remuneration. Nevertheless, there are cases in which the service requested is so specific that the differences in the outcome of its provision arising from the supplier used do not influence the consumer’s choice of supplier. In those cases, price might be the determining factor used by businesses and consumers to choose the supplier to use and, hence, the service to purchase. Therefore, the provision prevents architects from effectively and efficiently competing with each other and, as a result, reduces the benefits of businesses and consumers arising from services provided by those professionals. In fact, the provision prevents architects that incur lower costs from passing on those savings to businesses and consumers in cases in which the service provided does not differ between architects.

The prohibition on competition based solely on remuneration for architects should be abolished. The implementation of this recommendation will allow those professionals to use only price to compete with each other and will, consequently, increase the benefits of businesses and consumers arising from services provided by the professionals in question.

11

Regulation 350/2016 "Rules, conditions, principles and procedures applicable in the scope of the registration in the Professional Association of Architects"

Annex I - Art. 1 (1)

Professional internship

Applicants for the professional title of architect shall have successfully completed a professional traineeship which shall last 12 months.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

The provision determines the need for architects to carry out a professional internship and, thus, it may increase costs for professionals. However, the work-based practical experience gained by applicants for professional titles throughout a professional internship is expected to have a direct and significant positive impact on the level of safety of the services provided by those professionals. In fact, one of the main variables that influence the level of safety of the services provided by professionals is the fulfilment by them of the minimum knowledge requirements necessary for practising their respective profession and, intrinsically, their ability to apply this knowledge. Additionally, the duration of the professional internship defined in the provision conforms with the respective duration foreseen in Law 2/2013 (Art. 8 (2) (a)) (at most, 18 months).

No recommendation.

12

Decree-Law 152/2005 (last modification by Decree-Law 145/2017) "Rules, conditions, principles and procedures applicable in the scope of recovery for recycling, reclamation and destruction of substances that deplete the ozone layer contained in specific equipments and of maintenance and servicing of those equipments"

Art. 2 (b)

Ethical principles

Architects must show themselves worthy of their responsibilities.

The policy objective of the provision seems to be to ensure suitability of professional services for the needs of businesses and consumers.

The lack of clear and specific language for the rules and principles to be followed by architects and to be monitored by the Professional Association of Architects allows these entities to be more arbitrary in their decisions. This makes it more difficult for potential and existing professionals to obtain accurate and timely information concerning the relevant operational context. It also creates regulatory uncertainty for those individuals and may lead to an unsubstantiated and, consequently, avoidable increase in the costs they incur. In fact, such a situation: (i) allows the Professional Association of Architects to act differently in analogous circumstances, allowing it to apply dissimilar conditions to equivalent situations, potentially placing some professionals at a competitive disadvantage; and (ii) results in a reduction in the necessary and adequate information available to professionals to decide and, in particular, to develop their business plans.

The provision should be amended in such a way as to use as much clear and specific language as possible. Moreover, the provision should be expressly revoked, if it has been superseded in its substance by more recent legislation, has lost its usefulness or has become obsolete as a result of technological developments.

13

Regulation 336/2016 "Regulation concerning ethics and disciplinary procedure applicable to architects"

Art. 10 (7) (b)

Ethical principles

Architects may not carry out any manoeuvre or pressure that may negatively affect the freedom of choice of a potential business or consumer.

The policy objective of the provision seems to be to ensure suitability of professional services for the needs of businesses and consumers.

The lack of clear and specific language for the rules and principles to be followed by architects and to be monitored by the Professional Association of Architects allows these entities to be more arbitrary in their decisions. This makes it more difficult for potential and existing professionals to obtain accurate and timely information concerning the relevant operational context. It also creates regulatory uncertainty for those individuals and may lead to an unsubstantiated and, consequently, avoidable increase in the costs they incur. In fact, such a situation: (i) allows the Professional Association of Architects to act differently in analogous circumstances, allowing it to apply dissimilar conditions to equivalent situations, potentially placing some professionals at a competitive disadvantage; and (ii) results in a reduction in the necessary and adequate information available to professionals to decide and, in particular, to develop their business plans.

The provision should be amended in such a way as to use as much clear and specific language as possible. Moreover, the provision should be expressly revoked, if it has been superseded in its substance by more recent legislation, has lost its usefulness or has become obsolete as a result of technological developments.

14

Regulation 322/2016 "Regulation concerning the establishment and operation of firms of architects"

Art. 4 (2) (c)

Management of professional firms

The registration of professional firms of architects in the Professional Association of Architects can only be carried out by professional firms of architects that have, at least, one executive manager or administrator established in Portugal.

The policy objective of the provision seems to be to prevent conflicts of interest between the different professional firms on behalf of which a certain professional carries out an activity.

The provision prevents individuals other than architects from managing professional firms of architects. Hence, the provision may make businesses incur unnecessary costs. In fact: (i) the managers of professional firms of architects defined in the provision differ from the respective managers foreseen in Law 2/2013 (Art. 27 (3) (b)) and in Directive 2008/57/EC (Art. 13 (4) (first sentence)) (only one of the executive managers or administrators of professional firms has to be registered in the respective professional association); and (ii) the provision prevents individuals with business knowledge from participating in the decision-making process of professional firms of architects and, as such, may prevent decisions by them that are duly weighed and based on all relevant information.

We recommend that a separation between ownership and management be allowed in all professional firms and that their management may include non-professionals.

15

Regulation 322/2016 "Regulation concerning the establishment and operation of firms of architects"

Art. 4 (3)

Partnership and ownership of professional firms

The majority of capital or voting rights of professional firms of architects shall be held by partners of those firms which provide professional services included in the main social object of the firms in question on their behalf.

The policy objective of the provision seems to be to ensure actions by the professional firms that are consonant with the ethical principles applicable to the respective profession and independent.

The provision prevents individuals other than architects from owning professional firms of architects or holding the majority of those firms' capital and voting rights. Hence, the provision may make businesses incur unnecessary costs. In fact, the provision: (i) reduces the sources of investment available to professional firms of architects and, consequently, unduly hinder them from entering the market or operating in it; and (ii) prevents entities with business knowledge from participating in the decision-making process of professional firms of architects and, as such, may prevent decisions by them that are duly weighed and based on all relevant information.

Ownership/partnership of all professional firms should be opened to other professionals and non-professionals. We also recommend that other professionals and non-professionals be allowed to hold a majority of a professional firm’s social capital, together with a majority of voting rights.

16

Regulation 322/2016 "Regulation concerning the establishment and operation of firms of architects"

Art. 4 (5) and Art. 4 (6)

Multidisciplinary activities in professional firms

Professional firms of architects can carry out activities other than the activity of architect as long as they are compatible with that activity. In particular, activities that characterise the practice of regulated professions other than the profession of architect or of professions under the jurisdiction of Professional Associations other than the Professional Association of Architects are incompatible with the activity of architect if the Professional Association in question prevents the establishment of professional firms which include architects or that carry out activities reserved for the profession of architect.

The policy objective of the provision seems to be to ensure actions by the professional firms that are consonant with the ethical principles applicable to the respective profession and independent.

The provision, in itself, does not prevent multidisciplinary activity in professional firms of architects, given that it allows them to carry out activities other than the activity of architect. However, incompatibilities and impediments related to the profession of architect foreseen in regulations may lead to an incompatibility between certain activities and the activity of architect and, consequently, may prevent professional firms of architects from carrying out those activities. As a consequence, firms are unduly hindered from entering the market or operating in it. In fact, the situation leads to: (i) a reduction of the potential sources of revenue available to firms and, as such, a reduction of their potential to recover costs; and (ii) an increase in the costs incurred by firms, in particular through the limitation or prevention of their ability to exploit economies of scale and economies of scope. This leads to higher prices and less diversity and innovation (including through the use of new techniques) in the scope of the activity of architect and, also, of the activities legally considered to be incompatible with it. This has a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered by professional firms of architects and the type of services demanded of them. In fact, some businesses and consumers prefer to have only one service provider than several (each one providing services within the scope of a specific profession).

No recommendation on the legal principle foreseen in this specific provision. However, we recommend that the legislator conducts a technical study to assess the proportionality of incompatibilities and impediments to pursue the exercise of a self-regulated profession that may be preventing the offer of multidisciplinary activities within the same professional firm, taking into consideration the policy objective. In case they are considered not to be proportional, they should be abolished.

17

Regulation 322/2016 "Regulation concerning the establishment and operation of firms of architects"

Art. 5 (3) (b)

Partnership and ownership of professional firms

Associations of architects or professionals equivalent to the profession of architects established in a country from the EU or the EEA other than Portugal registered in the Professional Association of Architects or whose respective permanent representation in Portugal is registered in that Professional Association shall have the majority of social capital or voting power held by:(i) architects or professionals equivalent to architects with full enjoyment of their rights; or(ii) associations of architects or professionals equivalent to architects whose majority of voting rights is held by those professionals with full enjoyment of their rights.

The policy objective of the provision seems to be to ensure actions by the professional firms that are consonant with the ethical principles applicable to the respective profession and independent.

The provision prevents some associations of architects or professionals equivalent to architects firms established in a country from the EU or the EEA other than Portugal from entering the market and, consequently, reduces the supply of professional services available to businesses and consumers. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them.

Associations of architects or professionals equivalent to architects established in a country from the EU or the EEA other than Portugal should not be prevented from entering the market merely because the majority of social capital or voting power is not held by specific individuals or entities.

18

Regulation 322/2016 "Regulation concerning the establishment and operation of firms of architects"

Art. 16 (1)

Partnership and ownership of professional firms

Architects, professional firms of architects and associations of professionals equivalent to the profession of architects may be partners of professional firms of architects and provide services of architect on their behalf in only one professional firm of architects and only in cases in which they do not participate in any association equivalent to a professional firm of architects established in a country from the EU or the EEA other than Portugal.

The policy objective of the provision seems to be to prevent conflicts of interest between the different professional firms on behalf of which a certain professional carries out an activity.

The provision prevents architects, professional firms of architects and associations of professionals equivalent to architects from providing architectural services, simultaneously, on behalf of several professional firms of architects. Therefore, the provision, in fact, fully achieves the policy objective underlying it. However, that objective can also be achieved by merely: (i) including in the articles of the association of professional firms of architects a clause precluding the partners that carry out professional activities on their behalf from performing those activities on behalf of other professional firms of architects in which they are also partners (the firms in question might not even want this clause); and (ii) complying with the ethical principles, incompatibilities and impediments applicable to the profession. Consequently, the provision may make professionals and businesses incur unnecessary costs. In fact, the provision requires professionals to determine the professional firm on behalf of which they will practise the profession, which is expected to have a direct and significant impact on the level of investment that they are willing to make in professional firms of architects. As such, the provision reduces the sources of investment and of professionals available to professional firms of architects and, consequently, unduly hinders them from entering the market or operating in it.

The provision should be abolished.

19

No number applicable "Table of fees and charges charged by the Professional Association of Architects in 2016 "

Art. 8 (1)

Professional internship

The fee charged by the Professional Association of Architects for the enrolment of applicants n the professional internship leading to the professional title of architect is EUR 200.

The policy objective of the provision seems to be the economic sustainability of the operation of the Professional Association of Architects.

A fee in favour of a public entity is the value due for the provision of a specific public service, for the use of a property in the public domain or for the removal of a legal obstacle to the behaviour of private entities (General Tax Law (Art. 4 (2)), approved by Decree-Law 398/98). Administrative fees lead to an increase in the costs incurred by the economic agents, potentially leading to higher prices. Therefore, they might prevent agents from entering the market or they might make it significantly more difficult for them to operate in it. The administrative bodies and agents should act, in the exercise of their functions, so as to respect the principle of proportionality (Constitution of the Portuguese Republic (CRP) (Art. 266 (2)), approved by Decree of 10 April 1976), that also applies to administrative fees. As such, those fees should be correlated with the costs incurred with the provision of the underlying services (and, consequently, should not be a means for the administrative bodies and agents to collect revenues), should be based on transparent methodology and should not be discriminatory. However, there is no publicly available information concerning the specific criteria that were used to calculate the administrative fee established in the provision and it was not possible to identify an economic rationale for that fee. Therefore, the provision may make individuals that want to be architects incur unnecessary costs. In fact, the provision requires them to pay more for the professional internship and, consequently, may reduce the supply of architects available to businesses and consumers.

The fee established in the provision should be calculated using transparent, non-discriminatory and cost-based criteria.

Technical and scientific professions: Engineers

No

No and title of Regulation

Article

Thematic Category

Brief description of the potential obstacle

Policy maker's objective

Harm to competition

Recommendation

1

Decree-Law 129/2002 (last modification by Decree-Law 96/2008) "Regulation on the acoustic requirements applicable to buildings"

Annex - Art. 3 (2)

Reserved activities

The development and signing of projects concerning acoustic conditioning of buildings can only be carried out by specific professionals and, in particular, by specific engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

2

Decree-Law 119/92 (last modification by Law 123/2015) "Bylaws of the Professional Association of Engineers"

Annex - Art. 4 (2)

Professional associations

The Professional Association of Engineers shall carry out: (i) tasks in the scope of the representation of the engineers before others; and(ii) tasks in the scope of the regulation of the profession of engineer.

The policy objective of the provision seems to be to ensure suitability of the regulation of the profession of engineer for the needs of businesses and consumers and, also, of professionals.

The regulation of the profession of engineer is controlled by the Professional Association of Engineers and, consequently, by engineers, given that the governing bodies of the professional association in question are made up entirely by those professionals. Since the exercise of the profession of engineer involves very specific educational and training qualifications, that is expected to increase the quality of regulation. Consequently, the provision can be considered to indicate that the policy objective underlying it is fully achieved. However, the same situation allows conflicts of interest inherent in situations in which engineers are, simultaneously, regulators and regulated entities. Hence, the provision may make applicants for the professional title of engineer incur unnecessary costs. In fact, the provision leaves to the discretion of the Professional Association of Engineers the definition of rules, conditions, principles and procedures applicable in the scope of the profession of engineer and, consequently, requires applicants for the professional title of engineer to comply with requirements that are not clearly motivated, potentially reducing the supply of engineers available to businesses and consumers.

We recommend that the regulatory function should be separated from the representative function for self-regulated professional associations, either through the creation of an over-arching supervisory body by sector or trade, or through the creation of a supervisory body inside the current professional orders with the necessary "Chinese walls". The supervisory body takes on the main regulation of the profession such as access to the profession and similar functions. The board of the regulatory body will include not only representative of the profession but also lay people, including high-profile experienced individuals from other regulators, representatives of consumer organisations and academia.

3

Decree-Law 119/92 (last modification by Law 123/2015) "Bylaws of the Professional Association of Engineers"

Annex - Art. 6

Professional titles and reserved activities

The professional title of engineer can only be granted to individuals registered in the Professional Association of Engineers as a full member.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

The need for registration in the Professional Association of Engineers as defined in the provision reduces the supply of engineers in the market and, as such, negatively affects competition. In fact, the provision prevents some of the individuals who comply with the minimum educational and training qualifications necessary for practising the profession of engineer from practising that profession in Portugal. However, that registration is expected to significantly reduce the asymmetry of information between businesses and consumers and professionals, each one of whom has perfect information about the quality of its performance of the assigned tasks. The association of the registration in question to the reserved activities leads to a monopoly (formed by the individuals registered in the Professional Association of Engineers) on the practise of the profession of engineer. Reserved activities also restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a l degree of specialisation of the individuals who provide them. These effects are aggravated by the (additional) existence of restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. architects, engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

4

Decree-Law 119/92 (last modification by Law 123/2015) "Bylaws of the Professional Association of Engineers"

Annex - Art. 7 (2)

Reserved activities

The development of certain engineering projects can only be carried out by specific professionals and, in particular, by specific engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or who do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by the (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

5

Decree-Law 119/92 (last modification by Law 123/2015) "Bylaws of the Professional Association of Engineers"

Annex - Art. 11 (6)

Management of professional firms

Members of the executive body of the professional firms of Engineers, regardless of their capacity as members of that Professional Association, shall respect the ethical principles and rules, the technical and scientific independence and the guarantees applicable to engineers foreseen in laws and regulations.

The policy objective of the provision seems to be to prevent conflicts of interest between the different professional firms on behalf of which a certain professional carries out an activity.

The provision prevents individuals other than engineers from managing professional firms of engineers. Hence, the provision may make businesses incur unnecessary costs. In fact: (i) the managers of professional firms of engineers as defined in the provision differ from the respective managers foreseen in Law 2/2013 (Art. 27 (3) (b)) and in Directive 2008/57/EC (Art. 13 (4) (first sentence)) (only one of the executive managers or administrators of professional firms has to be registered in the respective professional association); and (ii) the provision prevents individuals with business knowledge from participating in the decision-making process of professional firms of engineers and, as such, may prevent decisions by the them that are duly weighed and based on all relevant information.

We recommend that a separation between ownership and management be allowed in all professional firms and that their management may include non-professionals.

6

Decree-Law 119/92 (last modification by Law 123/2015) "Bylaws of the Professional Association of Engineers"

Annex - Art. 11 (7)

Multidisciplinary activity in professional firms

Professional firms of engineers can carry out activities other than the activity of engineer as long as they are not incompatible with that activity and for which the bylaws of the Professional Association of Engineers do not foresee any impediment.

The policy objective of the provision seems to be to ensure actions by the professional firms that are consonant with the ethical principles applicable to the respective profession and independent.

The provision, in itself, does not prevent multidisciplinary activities in professional firms of engineers, given that it allows them to carry out activities other than the activity of engineer. However, incompatibilities and impediments related to the profession of engineer foreseen in regulations may lead to an incompatibility between certain activities and the activity of engineer and, consequently, may prevent professional firms of engineers from carrying out those activities. As a consequence, firms are unduly hindered from entering the market or operating in it. In fact, that situation leads to: (i) a reduction of the potential sources of revenue available to firms and, as such, a reduction of their potential to recover costs; and (ii) an increase in the costs incurred by firms, in particular through the limitation or prevention of their ability to exploit economies of scale and economies of scope. This leads to higher prices and less diversity and innovation (including through the use of new techniques) in the scope of the activity of engineer and, also, of the activities legally considered to be incompatible with it, with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered by professional firms of engineers and the type of services demanded from them. In fact, some businesses and consumers prefer to have only one service provider than to have several (each one of which is providing services in the scope of a specific profession).

No recommendation on the legal principle foreseen in this specific provision. However, we recommend that the legislator conducts a technical study to assess the proportionality of incompatibilities and impediments to pursue the exercise of a self-regulated profession that may be preventing the offer of multidisciplinary activities within the same professional firm, taking into consideration the policy objective. In case they are considered not to be proportional, they should be abolished.

7

Decree-Law 119/92 (last modification by Law 123/2015) "Bylaws of the Professional Association of Engineers"

Annex - Art. 11 (9)

Partnership and ownership of professional firms

The majority of capital with voting rights of professional firms of engineers shall be held by:(i) engineers established in Portugal; (ii) professional firms of engineers; or(iii) certain associations of professionals equivalent to the profession of engineers established in a country from the EU or the EEA other than Portugal.

The policy objective of the provision seems to be to ensure actions by the professional firms that are consonant with the ethical principles applicable to the respective profession and independent.

The provision prevents individuals other than engineers from owning professional firms of engineers or holding the majority of those firms' capital and voting rights. Hence, the provision may make businesses incur unnecessary costs. In fact, the provision: (i) reduces the sources of investment available to professional firms of engineers and, consequently, unduly hinders them from entering the market or operating in it; and (ii) prevents entities with business knowledge from participating in the decision-making process of professional firms of engineers and, as such, may prevent decisions by the them that are duly weighed and based on all relevant information.

Ownership/partnership of all professional firms should be opened to other professionals and non-professionals. We also recommend that other professionals and non-professionals be allowed to hold a majority of a professional firm’s social capital, together with a majority of voting rights.

8

Decree-Law 119/92 (last modification by Law 123/2015) "Bylaws of the Professional Association of Engineers"

Annex - Art. 12 (1) and Art. 12 (2)

Partnership and ownership of professional firms

Associations of professionals equivalent to engineers established in a country from the EU or the EEA other than Portugal whose respective permanent representation in Portugal is registered in the Professional Association of Engineers shall have the majority of capital with voting rights or, in cases in which those associations do not have social capital, voting rights held by:(i) professionals equivalent to engineers; or(ii) associations of professionals equivalent to engineers whose majority of capital and voting rights is held by those professionals.

The policy objective of the provision seems to be to ensure actions by the professional firms that are consonant with the ethical principles applicable to the respective profession and independent.

The provision prevents some associations of professionals equivalent to engineers established in a country from the EU or the EEA other than Portugal from entering the market and, consequently, reduces the supply of professional services available to businesses and consumers. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them.

Associations of professionals equivalent to engineers established in a country from the EU or the EEA other than Portugal should not be prevented from entering the market merely because the majority of social capital or voting power is not held by specific individuals or entities.

9

Decree-Law 119/92 (last modification by Law 123/2015) "Bylaws of the Professional Association of Engineers"

Annex - Art. 15 (1) (a)

Academic qualifications

Individuals registered in the Professional Association of Engineers as a full member shall have, at least, a university master's degree in engineering.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

The provision limits the academic qualifications necessary for practising the profession of engineer and the acceptable routes to obtain them. Hence, the provision may make professionals incur unnecessary costs. In fact, the provision prevents individuals who have an academic background other than a university master's degree in engineering, which ensures their technical suitability for performing the tasks assigned to them, from becoming engineers in Portugal and, consequently, reduces the supply of those professionals available to businesses and consumers. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. These effects are aggravated by the (additional) restrictions on entry into a certain profession.

The technical professional associations should work with the legislator to set a transparent, proportional and non-discriminatory process for identification of alternative routes to obtain the strictly necessary or adequate qualifications for the exercise of a technical profession. The specific technical profession should be open to professionals with different academic backgrounds. These alternative routes would promote vertical conversions (e. g. migration from an engineering university background to an architecture degree) and would be applied through a conversion course or postgraduate studies. Those candidates should undergo the same on-the-job training or professional exams as others. These alternative routes would also apply to engineers and technical engineers for horizontal conversions (in the case of migration among different engineers’ specialisations and different technical engineers).

10

Decree-Law 119/92 (last modification by Law 123/2015) "Bylaws of the Professional Association of Engineers"

Annex - Art. 142 (4)

Ethical principles

Engineers should determine the prices applicable to the services they provide taking into account their fair value.

The policy objective of the provision seems to be to ensure universality of access to professional services while guaranteeing economic sustainability of the operation of the professionals.

The lack of clear and specific language for the rules and principles to be followed by engineers and to be monitored by the Professional Association of Engineers allows these entities to be more arbitrary in their decisions. This makes it more difficult for potential and existing professionals to obtain accurate and timely information concerning the relevant operational context. It also creates regulatory uncertainty for those individuals and may lead to an unsubstantiated and, consequently, avoidable increase in the costs they incur. In fact, such a situation: (i) allows the Professional Association of Engineers to act differently in analogous circumstances, allowing it to apply dissimilar conditions to equivalent situations, potentially placing some professionals at a competitive disadvantage; and (ii) results in a reduction in the necessary and adequate information available to professionals to decide and, in particular, to develop their business plans.

The provision should be amended in such a way as to use as much clear and specific language as possible. Moreover, the provision should be expressly revoked, if it has been superseded in its substance by more recent legislation, has lost its usefulness or has become obsolete as a result of technological developments.

11

Decree-Law 119/92 (last modification by Law 123/2015) "Bylaws of the Professional Association of Engineers"

Annex - Art. 143 (3)

Ethical principles

Engineers must use as much sobriety as possible in professional advertisements that they make or authorise.

The policy objective of the provision seems to be to ensure suitability of professional services for the needs of businesses and consumers.

The lack of clear and specific language for the rules and principles to be followed by engineers and to be monitored by the Professional Association of Engineers allows these entities to be more arbitrary in their decisions. This makes it more difficult for potential and existing professionals to obtain accurate and timely information concerning the relevant operational context. It also creates regulatory uncertainty for those individuals and may lead to an unsubstantiated and, consequently, avoidable increase in the costs they incur. In fact, such a situation: (i) allows the Professional Association of Engineers to act differently in analogous circumstances, allowing it to apply dissimilar conditions to equivalent situations, potentially placing some professionals at a competitive disadvantage; and (ii) results in a reduction in the necessary and adequate information available to professionals to decide and, in particular, to develop their business plans.

The provision should be amended in such a way as to use as much clear and specific language as possible. Moreover, the provision should be expressly revoked, if it has been superseded in its substance by more recent legislation, has lost its usefulness or has become obsolete as a result of technological developments.

12

Decree-Law 152/2005 (last modification by Decree-Law 145/2017) "Rules, conditions, principles and procedures applicable in the scope of recovery for recycling, reclamation and destruction of substances that deplete the ozone layer contained in specific equipments and of maintenance and servicing of those equipments"

Art. 16, Art. 19 and Art. 20

Professional levels, professional titles and reserved activities

The professional levels of level 1 engineer and of level 2 engineer and the professional titles of senior engineer and of counsellor engineer can only be granted to specific engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

The granting of the specific professional levels of engineer and of the specific professional titles of engineer as defined in the provisions reduces the supply of engineers that can perform certain tasks in the market and, as such, negatively affects competition. In fact, the provision prevents some individuals who comply with the minimum educational and training qualifications necessary for performing certain tasks in the scope of the profession of engineer from carrying out those tasks in Portugal. However, those professional levels and titles are expected to significantly reduce the asymmetry of information between businesses and consumers and professionals, each one of whom has perfect information about the quality of performance of the assigned tasks. The association of the professional levels and titles in question to the reserved activities leads to a monopoly (formed by the individuals holding a certain professional level or title of engineer) on the performance of certain tasks in the scope of the profession of engineer. Reserved activities also restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some of the services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by the (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. architects, engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

13

Regulation 1125/2016"Rules, conditions, principles and procedures applicable in the scope of the internship to be undertaken by individuals who want to register in the Professional Association of Engineers"

Art. 14 (1)

Professional internship

Applicants for the professional title of engineer shall have successfully completed a professional traineeship which shall last:(i) between 6 and 12 months in cases in which the individuals have a university master's degree in engineering; and(ii) between 18 and 24 months in cases in which the individuals have a university degree in engineering.

The policy objective of the provision is to ensure a high level of safety of the services provided by professionals and, within that scope, to ensure adequate ability of those individuals to apply knowledge in order to perform the tasks assigned to them.

The provision determines the need for engineers to carry out a professional internship and, thus, it may increase costs for professionals. However, the work-based practical experience gained by applicants for professional titles throughout a professional internship is expected to have a direct and significant positive impact on the level of safety of the services provided by those professionals. In fact, one of the main variables that influence the level of safety of the services provided by professionals is their fulfilment of the minimum knowledge requirements necessary for practising the respective profession and, intrinsically, their ability to apply this knowledge. Additionally, the maximum duration of the professional internship in cases in which the individuals have a university master's degree in engineering as defined in the provision conforms with the maximum duration of the professional internship foreseen in Law 2/2013 (Art. 8 (2) (a)) (18 months). On the contrary, the maximum duration of the professional internship in cases in which the individuals have a university degree in engineering does not conform with the maximum duration of the professional internship foreseen in Law 2/2013 (Art. 8 (2) (a)). Hence, the provision increases regulatory uncertainty for professionals and may make them incur unnecessary costs. In fact, the provision requires professionals to wait longer for the opportunity to practice the respective profession and, as such, to be limited in their activities for longer.

The provision should be aligned with Law 2/2013, by changing the maximum duration of the professional internship in cases in which individuals have a university degree in engineering from between 18 and 24 months to a maximum of 18 months.

14

Regulation 1125/2016 "Rules, conditions, principles and procedures applicable in the scope of the internship to be undertaken by individuals who want to register in the Professional Association of Engineers"

Art. 26 (2)

Professional internship

The examination necessary for concluding professional internships in the scope of granting the professional title of engineer shall be carried out by three engineers registered in the Professional Association of Engineers for more than five years, one of whom is the supervisor of the respective internship.

The policy objective of the provision is to ensure a high level of safety of the services provided by professionals and, within that scope, to ensure adequate ability of those individuals to apply knowledge in order to perform the tasks assigned to them.

The evaluation of the internship undertaken by individuals who want to register in the Professional Association of Engineers is controlled by engineers. Therefore, the provision allows conflicts of interest inherent in situations in which engineers are, simultaneously, supply-side economic agents and entities responsible for determining the maximum number of professionals entering the market.

The final evaluation of the internship should be conducted by a board, independent of the professional association (see our comments in section 3 on a supervisory board), which may include members of the latter, but must also include other professionals such as university professors and other people of recognised merit and experience.

15

Regulation 147/2013 "Regulation on the specialisations in the field of engineering"

Art. 9

Professional titles and reserved activities

The professional title of specialist engineer can only be granted to specific engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

The granting of the specific professional title of engineer as defined in the provision reduces the supply of engineers that can perform certain tasks in the market and, as such, negatively affects competition. In fact, the provision prevents some individuals who comply with the minimum educational and training qualifications necessary for performing certain tasks in the scope of the profession of engineer from carrying out those tasks in Portugal. However, that professional title is expected to significantly reduce the asymmetry of information between businesses and consumers and professionals, each one of whom has perfect information about the quality of its performance of the assigned tasks. The association of the professional title in question to the reserved activities leads to a monopoly (formed by the individuals holding a certain professional title of engineer) on the performance of certain tasks in the scope of the profession of engineer. Reserved activities also restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by the (additional) restrictions on entry in a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

16

No number applicable "Registration in the Professional Association of Engineers as trainee member or as a full member"

Art. 2 (3)

Professional internship

The fee charged by the Professional Association of Engineers for the enrolment of applicants in the professional internship leading to the professional title is EUR 80.

The policy objective of the provision seems to be the economic sustainability of the operation of the Professional Association of Engineers.

A fee in favour of a public entity is the value due for the provision of a specific public service, for the use of a property in the public domain or for the removal of a legal obstacle to the behaviour of private entities (General Tax Law (Art. 4 (2)), approved by Decree-law 398/98). Administrative fees lead to an increase in the costs incurred by the economic agents, potentially leading to higher prices. Therefore, they might prevent agents from entering the market or they might make it significantly more difficult for them to operate in it. The administrative bodies and agents should act, in the exercise of their functions, so as to respect the principle of proportionality (Constitution of the Portuguese Republic (CRP) (Art. 266 (2)), approved by Decree of 10 April 1976), that also applies to administrative fees. As such, those fees should be correlated with the costs incurred with the provision of the underlying services (and, consequently, should not be a means for the administrative bodies and agents to collect revenues), should be based on transparent methodology and should not be discriminatory. However, there is no publicly available information concerning the specific criteria that were used to calculate the administrative fee established in the provision and it was not possible to identify an economic rationale for that fee. Therefore, the provision may make individuals who want to be engineers incur unnecessary costs. In fact, the provision requires them to pay more for the professional internship and, consequently, may reduce the supply of engineers available to businesses and consumers.

The fee established in the provision should be calculated using transparent, non-discriminatory and cost-based criteria.

Technical and scientific professions: Technical Engineers

No

No and title of Regulation

Article

Thematic Category

Brief description of the potential obstacle

Policy maker's objective

Harm to competition

Recommendation

1

Law 47/2011 (last modification by Law 157/2015) "Bylaws of the Professional Association of Technical Engineers"

Annex - Art 3

Professional associations

The Professional Association of Technical Engineers shall carry out: (i) tasks within the scope of representation of technical engineers before others; and(ii) tasks within the scope of the regulation of the profession of technical engineer.

The policy objective of the provision seems to be to ensure suitability of the regulation of the profession of technical engineer for the needs of businesses and consumers and, also, of professionals.

The regulation of the profession of technical engineer is controlled by the Professional Association of Technical Engineers and, consequently, by technical engineers, given that the governing bodies of the Professional Association in question are made entirely of those professionals. Since the exercise of the profession of technical engineer involves very specific educational and training qualifications, that is expected to increase the quality of regulation. Consequently, the provision can be considered to indicate that the policy objective underlying it is fully achieved. However, the same situation allows conflicts of interest inherent in situations in which technical engineers are, simultaneously, regulators and regulated entities. Hence, the provision may make applicants for the professional title of technical engineer incur unnecessary costs. In fact, the provision leaves to the discretion of the Professional Association of Technical Engineers the definition of the rules, conditions, principles and procedures applicable in the scope of the profession of technical engineer and, consequently, requires applicants for the professional title of technical engineer to comply with requirements that are not clearly motivated, potentially reducing the supply of technical engineers available to businesses and consumers.

We recommend that the regulatory function should be separated from the representative function for self-regulated professional associations, either through the creation of an over-arching supervisory body by sector or trade, or through the creation of a supervisory body inside the current professional orders with the necessary "Chinese walls". The supervisory body takes on the main regulation of the profession such as access to the profession and similar functions. The board of the regulatory body will include not only representative of the profession but also lay people, including high-profile experienced individuals from other regulators, representatives of consumer organisations and academia.

2

Law 47/2011 (last modification by Law 157/2015) "Bylaws of the Professional Association of Technical Engineers"

Annex - Art. 6 (1)

Professional titles and reserved activities

The professional title of technical engineer can only be granted to individuals registered in the Professional Association of Technical Engineers as a full member.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

The need for registration in the Professional Association of Technical Engineers as defined in the provision reduces the supply of technical engineers in the market and, as such, negatively affects competition. In fact, the provision prevents some individuals who comply with the minimum necessary educational and training qualifications for practising the profession of technical engineer from practising that profession in Portugal. However, that registration is expected to significantly reduce the asymmetry of information between businesses and consumers and professionals, each one of whom has perfect information about the quality of its performance of the assigned tasks. The association of the registration in question to the reserved activities leads to a monopoly (formed by the individuals registered in the Professional Association of Technical Engineers) on the practice of the profession of technical engineer. Reserved activities also restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by the (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. architects, engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

3

Law 47/2011 (last modification by Law 157/2015) "Bylaws of the Professional Association of Technical Engineers"

Annex - Art. 6 (3)

Reserved activities

Certain activities related to specific operations and works can only be carried out by specific professionals and, in particular, by specific technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

4

Law 47/2011 (last modification by Law 157/2015) "Bylaws of the Professional Association of Technical Engineers"

Annex - Art. 10 (6)

Management of professional firms

Members of the executive body of the professional firms of Technical Engineers, regardless of their capacity as members of that professional association, shall respect the ethical principles and rules, the technical and scientific independence and the guarantees applicable to technical engineers foreseen in laws and regulations.

The policy objective of the provision seems to be to prevent conflicts of interest between the different professional firms on behalf of which a certain professional carries out an activity.

The provision prevents individuals other than technical engineers from managing professional firms of technical engineers. Hence, the provision may make businesses incur unnecessary costs. In fact: (i) the managers of professional firms of technical engineers as defined in the provision differ from the respective managers foreseen in Law 2/2013 (Art. 27 (3) (b)) and in Directive 2008/57/EC (Art. 13 (4) (first sentence)) (only one of the executive managers or administrators of professional firms has to be registered in the respective professional association); and (ii) the provision prevents individuals with business knowledge from participating in the decision-making process of professional firms of technical engineers and, as such, may prevent decisions by them that are duly weighed and based on all relevant information.

We recommend that a separation between ownership and management be allowed in all professional firms and that their management may include non-professionals.

5

Law 47/2011 (last modification by Law 157/2015) "Bylaws of the Professional Association of Technical Engineers"

Annex - Art. 10 (7)

Multidisciplinary activity in professional firms

Professional firms of technical engineers can carry out activities other than the activity of technical engineer as long as they are not incompatible with that activity and for which the bylaws of the Professional Association of Technical Engineers do not foresee any impediment.

The policy objective of the provision seems to be to ensure actions by the professional firms that are consonant with the ethical principles applicable to the respective profession and independent.

The provision, in itself, does not prevent multidisciplinary activities in professional firms of technical engineers, given that it allows them to carry out activities other than the activity of technical engineer. However, incompatibilities and impediments related to the profession of technical engineer foreseen in regulations may lead to an incompatibility between certain activities and the activity of technical engineer and, consequently, may prevent professional firms of technical engineers from carrying out those activities. As a consequence, firms are unduly hindered from entering the market or operating in it. In fact, that situation leads to: (i) a reduction of the potential sources of revenue available to firms and, as such, a reduction of their potential to recover costs; and (ii) an increase in the costs incurred by firms, in particular through the limitation or prevention of their ability to exploit economies of scale and economies of scope. This leads to higher prices and less diversity and innovation (including through the use of new techniques) in the scope of the activity of technical engineer and, also, of the activities legally considered to be incompatible with it, with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered by professional firms of technical engineers and the type of services demanded from them. In fact, some businesses and consumers prefer to have only one service provider than to have several (each one of which is providing services in the scope of a specific profession).

No recommendation on the legal principle foreseen in this specific provision. However, we recommend that the legislator conducts a technical study to assess the proportionality of incompatibilities and impediments to pursue the exercise of a self-regulated profession that may be preventing the offer of multidisciplinary activities within the same professional firm, taking into consideration the policy objective. In case they are considered not to be proportional, they should be abolished.

6

Law 47/2011 (last modification by Law 157/2015) "Bylaws of the Professional Association of Technical Engineers"

Annex - Art. 10 (9)

Partnership and ownership of professional firms

The majority of capital with voting rights of professional firms of technical engineers shall be held by:(i) technical engineers established in Portugal; (ii) professional firms of technical engineers; or(iii) certain associations of professionals equivalent to those of technical engineers established in a country from the EU or the EEA other than Portugal.

The policy objective of the provision seems to be to ensure actions by the professional firms that are consonant with the ethical principles applicable to the respective profession and independent.

The provision prevents individuals other than technical engineers from owning professional firms of technical engineers or holding the majority of those firms' capital and voting rights. Hence, the provision may make businesses incur unnecessary costs. In fact, the provision: (i) reduces the sources of investment available to professional firms of technical engineers and, consequently, unduly hinders them from entering the market or operating in it; and (ii) prevents entities with business knowledge from participating in the decision-making process of professional firms of technical engineers and, as such, may prevent decisions by them that are duly weighed and based on all relevant information.

Ownership/partnership of all professional firms should be opened to other professionals and non-professionals. We also recommend that other professionals and non-professionals be allowed to hold a majority of a professional firm’s social capital, together with a majority of voting rights.

7

Law 47/2011 (last modification by Law 157/2015) "Bylaws of the Professional Association of Technical Engineers"

Annex - Art. 11 (1) and Art. 11 (2)

Partnership and ownership of professional firms

Associations of professionals equivalent to technical engineers established in a country from the EU or the EEA other than Portugal whose respective permanent representation in Portugal is registered in the Professional Association of Technical Engineers shall have the majority of capital with voting rights or, in cases in which those associations do not have social capital, voting rights held by:(i) professionals equivalent to the profession of technical engineers; or(ii) associations of professionals equivalent to the profession of technical engineers whose majority of capital and voting rights is held by those professionals.

The policy objective of the provision seems to be to ensure actions by the professional firms that are consonant with the ethical principles applicable to the respective profession and independent.

The provision prevents some associations of professionals equivalent to technical engineers established in a country from the EU or the EEA other than Portugal from entering the market and, consequently, reduces the supply of professional services available to businesses and consumers. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them.

Associations of professionals equivalent to technical engineers established in a country from the EU or the EEA other than Portugal should not be prevented from entering the market merely because the majority of social capital or voting power is not held by specific individuals or entities.

8

Law 47/2011 (last modification by Law 157/2015) "Bylaws of the Professional Association of Technical Engineers"

Annex - Art. 26 (1) and Art. 26 (2)

Professional internship

The examination necessary for concluding professional internships in the scope of the granting of the professional title of technical engineer shall be carried out by the supervisor of the respective internship and approved by the national governing board of the Professional Association of Technical Engineers.

The policy objective of the provision is to ensure a high level of safety of the services provided by professionals and, within that scope, to ensure adequate ability of those individuals to apply knowledge in order to perform the tasks assigned to them.

The evaluation of the internship undertaken by individuals who want to register in the Professional Association of Technical Engineers is controlled by technical engineers. Therefore, the provision allows conflicts of interest inherent in situations in which technical engineers are, simultaneously, supply-side economic agents and entities responsible for determining the maximum number of professionals entering the market.

The final evaluation of the internship should be conducted by a board, independent of the professional association (see our comments in section 3 on a supervisory board), which may include members of the latter, but must also include professionals such as university professors and other people of recognised merit.

9

Law 47/2011 (last modification by Law 157/2015) "Bylaws of the Professional Association of Technical Engineers"

Annex - Art. 27 (2)

Academic qualifications

Individuals registered in the Professional Association of Technical Engineers as a full member shall have, at least, a bachelor's degree or a university degree in engineering conforming to the Bologna Process .

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

The provision limits the academic qualifications necessary for practising the profession of technical engineer and the acceptable routes to obtain them. Hence, the provision may make professionals incur unnecessary costs. In fact, the provision prevents individuals who have an academic background other than a bachelor's degree or a university degree (that conforms with the Bologna Process) in Engineering which ensures their technical suitability for performing the tasks assigned to them from becoming technical engineers in Portugal and, consequently, reduces the supply of those professionals available to businesses and consumers. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. These effects are aggravated by the (additional) restrictions on entry into a certain profession.

The technical professional associations should work with the legislator to set a transparent, proportional and non-discriminatory process for identification of alternative routes to obtain the strictly necessary or adequate qualifications for the exercise of a technical profession. The specific technical profession should be open to professionals with different academic backgrounds. These alternative routes would promote vertical conversions (e. g. migration from an engineering university background to an architecture degree) and would be applied through a conversion course or postgraduate studies. Those candidates should undergo the same on-the-job training or professional exams as others. These alternative routes would also apply to engineers and technical engineers for horizontal conversions (in the case of migration among different engineers’ specialisations and different technical engineers).

10

Law 47/2011 (last modification by Law 157/2015) "Bylaws of the Professional Association of Technical Engineers"

Annex - Art. 30

Professional titles and reserved activities

The professional titles of Senior Technical Engineer and of Specialist Technical Engineer can only be granted to specific technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

The granting of the specific professional titles of technical engineer as defined in the provision reduces the supply of technical engineers that can perform certain tasks in the market and, as such, negatively affects competition. In fact, the provision prevents some individuals that comply with the minimum educational and training qualifications necessary for performing certain tasks in the scope of the profession of technical engineer from carrying out those tasks in Portugal. However, those professional titles are expected to significantly reduce the asymmetry of information between businesses and consumers and professionals, each one of whom has perfect information about the quality of its performance of the assigned tasks. The association of the professional titles in question to the reserved activities leads to a monopoly (formed by the individuals holding a certain professional title of technical engineer) on the performance of certain tasks in the scope of the profession of technical engineer. Reserved activities also restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by the (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. architects, engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

11

Law 47/2011 (last modification by Law 157/2015) "Bylaws of the Professional Association of Technical Engineers"

Annex - Art. 81 (d)

Ethical principles

Technical engineers should not accept to replace other technical engineers in the carrying out of works without informing them in advance.

The policy objective of the provision is not clear.

The provision determines the need for technical engineers who will replace other technical engineers in the carrying out of works to inform them of that in advance. Therefore, the provision increases operational uncertainty for professionals and may make them incur unnecessary costs. In fact, the provision allows the professionals who are carrying out works to be aware of their consumers' intentions of changing their suppliers and, as a result, places them at a competitive advantage.

The provision should be abolished.

12

Law 47/2011 (last modification by Law 157/2015) "Bylaws of the Professional Association of Technical Engineers"

Annex - Art. 79 (d)

Ethical principles

Technical engineers must set a remuneration which is adequate to the services provided.

The policy objective of the provision seems to be to ensure universality of access to professional services while guaranteeing the economic sustainability of the operation of the professionals.

The lack of clear and specific language for the rules and principles to be followed by technical engineers and to be monitored by the Professional Association of Technical Engineers allows these entities to be more arbitrary in their decisions. This makes it more difficult for potential and existing professionals to obtain accurate and timely information concerning the relevant operational context. It also creates regulatory uncertainty for those individuals and may lead to an unsubstantiated and, consequently, avoidable increase in the costs they incur. In fact, such a situation: (i) allows the Professional Association of Technical Engineers to act differently in analogous circumstances, allowing it to apply dissimilar conditions to equivalent situations, potentially placing some professionals at a competitive disadvantage; and (ii) results in a reduction in the necessary and adequate information available to professionals to decide and, in particular, to develop their business plans.

The provision should be amended in such a way as to use as much clear and specific language as possible. Moreover, the provision should be expressly revoked, if it has been superseded in its substance by more recent legislation, has lost its usefulness or has become obsolete as a result of technological developments.

13

Regulation 35/2017 "Rules, conditions, principles and procedures applicable in the scope of the internship to be undertaken by individuals who want to register in the Professional Association of Technical Engineers"

Art. 16 (1)

Professional internship

Applicants for the professional title of Technical Engineer shall have successfully completed a professional traineeship which shall last, at most:(i) 18 months in cases in which the individuals have a bachelor's degree or a university degree conforming with the Bologna Process in engineering; and(ii) six months in cases in which the individuals have a university degree prior to the Bologna Process or a university master's degree in engineering.

The policy objective of the provision is to ensure a high level of safety of the services provided by professionals and, within that scope, to ensure adequate ability of those individuals to apply knowledge in order to perform the tasks assigned to them.

The provision determines the need for technical engineers to carry out a professional internship and, thus, it may increase costs for professionals. However, the work-based practical experience gained by applicants for professional titles throughout a professional internship is expected to have a direct and significant positive impact on the level of safety of the services provided by those professionals. In fact, one of the main variables that influence the level of safety of the services provided by professionals is their fulfilment of the minimum necessary knowledge requirements for practising the respective profession and, intrinsically, their ability to apply this knowledge. Additionally, the maximum duration of the professional internships defined in the provision conforms with the respective duration foreseen in Law 2/2013 (Art. 8 (2) (a)) (18 months).

No recommendation.

14

Regulation 889/2016 "Rules, conditions, principles and procedures applicable in the scope of admission of individuals in the experts pool of technical engineers"

Art. 4

Reserved activities

The registration of individuals in the experts pool of technical engineers can only be carried out by specific technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

Reserved activities restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. architects, engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

15

Regulation 889/2016 "Rules, conditions, principles and procedures applicable in the scope of admission of individuals in the experts pool of technical engineers"

Art. 9

Professional experts

The national governing board of the Professional Association of Technical Engineers shall nominate expert technical engineers, upon request, preferably taking into consideration criteria related to proximity between: (i) the place of residence or of professional activity of the expert; and (ii) the place of headquarters of the entity which requested the experts or the place of performance of tasks by them.

The policy objective of the provision seems to be to ensure suitability of professional services for the needs of businesses and consumers.

The entity which seeks expert technical engineers to carry out a specific activity is the only entity with perfect information about the variables that influence its decision, which may or may not include the place of residence or of professional activity of the experts. Consequently, the choice of those experts will tend to correspond to the best match between the type of professional services offered and the type of services demanded in cases in which it is made by the entity in question. In those cases, that entity will be able to assess the suitability of each available expert for the activity to be carried out and to negotiate the terms (in particular, the financial conditions) of provision of the services. Additionally, the governing board of the Professional Association of Technical Engineers is made up entirely of those technical engineers. Therefore, the (total or partial) limitation of the above-mentioned choice by the Professional Association in question allows conflicts of interest inherent in situations in which some technical engineers are, simultaneously, regulators and service providers. The occurrence of these situations is aggravated by the (additional) lack of regulations establishing the criteria that the Professional Association of Technical Engineers needs to fulfil when selecting the expert technical engineers suitable for a specific activity (in particular, criteria related to non-discrimination and uniformity).

The provision should be amended in such a way so as to determine that the answer to a request for nomination of expert technical engineers to carry out specific activities shall consist of an exhaustive list of individuals registered in the relevant professional areas of the experts' pool of technical engineers. That list should include, at least, the following information concerning each individual: (i) professional areas of the experts pool of technical engineers in which the individual is registered; (ii) place of residence; and (iii) place of professional activity.

16

Regulation 888/2016 "Code of ethics applicable to technical engineers"

Art. 3 (g)

Ethical principles

Technical engineers must use sobriety in their professional advertisements.

The policy objective of the provision seems to be to ensure suitability of professional services for the needs of businesses and consumers.

The lack of clear and specific language for the rules and principles to be followed by technical engineers and to be monitored by the Professional Association of Technical Engineers allows these entities to be more arbitrary in their decisions. This makes it more difficult for potential and existing professionals to obtain accurate and timely information concerning the relevant operational context. It also creates regulatory uncertainty for those individuals and may lead to an unsubstantiated and, consequently, avoidable increase in the costs they incur. In fact, such a situation: (i) allows the Professional Association of Technical Engineers to act differently in analogous circumstances, allowing it to apply dissimilar conditions to equivalent situations, potentially placing some professionals at a competitive disadvantage; and (ii) results in a reduction in the necessary and adequate information available to professionals to decide and, in particular, to develop their business plans.

The provision should be amended in such a way as to use as much clear and specific language as possible. Moreover, the provision should be expressly revoked, if it has been superseded in its substance by more recent legislation, has lost its usefulness or has become obsolete as a result of technological developments.

17

Regulation 888/2016 "Code of ethics applicable to technical engineers"

Art. 8 (f)

Ethical principles

Technical engineers should not accept to review, change or continue works carried out by other technical engineers without informing them of that in advance.

The policy objective of the provision is not clear.

The provision determines the need for technical engineers who will replace other technical engineers in carrying out works to inform them of that in advance. Therefore, the provision increases operational uncertainty for professionals and may make them incur unnecessary costs. In fact, the provision allows the professionals who are carrying out works to be aware of their consumers' intentions of changing their suppliers and, as a result, places them at a competitive advantage.

The provision should be abolished.

18

Regulation 888/2016 "Code of ethics applicable to technical engineers"

Art. 9 (d)

Ethical principles

Technical engineers should not accept to perform activities that compete with the activities performed by their employers without their prior agreement.

The policy objective of the provision seems to be to prevent conflicts of interest between the professionals who carry out an activity as employees of enterprises and, also, on their own account and as employers.

The provision, in fact, prevents conflicts of interest inherent in situations in which technical engineers are, simultaneously, supply-side economic agents and employees of other supply-side economic agents. However, that objective can also be achieved by merely including in the work contracts a clause precluding the professionals from performing activities that compete with the activities performed by their employers without their prior agreement. Consequently, the provision increases the administrative burden of professionals and may make them incur unnecessary costs. In fact, the provision requires professionals to make a request which might not be wanted by their employers.

The provision should be abolished.

19

Regulation 888/2016 "Code of ethics applicable to technical engineers"

Art. 13 (b)

Ethical principles

Technical engineers should be remunerated only for services that they have effectively provided and in proportion to their fair value, not distributing fees among themselves and other technical engineers.

The policy objective of the provision seems to be to ensure universality of access to professional services while guaranteeing the economic sustainability of the operation of the professionals.

The lack of clear and specific language for the rules and principles to be followed by technical engineers and to be monitored by the Professional Association of Technical Engineers allows these entities to be more arbitrary in their decisions. This makes it more difficult for potential and existing professionals to obtain accurate and timely information concerning the relevant operational context. It also creates regulatory uncertainty for those individuals and may lead to an unsubstantiated and, consequently, avoidable increase in the costs they incur. In fact, such a situation: (i) allows the Professional Association of Technical Engineers to act differently in analogous circumstances, allowing it to apply dissimilar conditions to equivalent situations, potentially placing some professionals at a competitive disadvantage; and (ii) results in a reduction in the necessary and adequate information available to professionals to decide and, in particular, to develop their business plans.

The provision should be amended in such a way as to use as much clear and specific language as possible. Moreover, the provision should be expressly revoked, if it has been superseded in its substance by more recent legislation, has lost its usefulness or has become obsolete as a result of technological developments.

20

Regulation 360/2012 (last modification by Regulation 496/2016) "Rules, conditions, principles and procedures applicable in the scope of granting of the professional title of specialist technical engineer"

All

Professional titles and reserved activities

The professional title of Specialist Technical Engineer can only be granted to specific technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

The granting of the specific professional title of technical engineer defined in the provision reduces the supply of technical engineers that can perform certain tasks in the market and, as such, negatively affects competition. In fact, the provision prevents some individuals who comply with the minimum educational and training qualifications necessary for performing certain tasks in the scope of the profession of technical engineer from carrying out those tasks in Portugal. However, that professional title is expected to significantly reduce the asymmetry of information between businesses and consumers and professionals, each one of whom has perfect information about the quality of its performance of the assigned tasks. The association of the professional title in question to the reserved activities leads to a monopoly (formed by the individuals holding a certain professional title of technical engineer) on the performance of certain tasks in the scope of the profession of technical engineer. Reserved activities also restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the available choices. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by the (additional) restrictions on entry into a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. architects, engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

21

Regulation 359/2012 (last modification by Regulation 497/2016) "Rules, conditions, principles and procedures applicable in the scope of granting of the professional title of senior technical engineer"

All

Professional titles and reserved activities

The professional title of Senior Technical Engineer can only be granted to specific technical engineers.

The policy objective of the provision seems to be to ensure a high level of safety of the operations and works and, within that scope, to ensure the technical suitability of the individuals to perform the tasks assigned to them.

The granting of the specific professional title of technical engineer defined in the provision reduces the supply of technical engineers that can perform certain tasks in the market and, as such, negatively affects competition. In fact, the provision prevents some individuals who comply with the minimum educational and training qualifications necessary for performing certain tasks in the scope of the profession of technical engineer from carrying out those tasks in Portugal. However, that professional title is expected to significantly reduce the asymmetry of information between businesses and consumers and professionals, each one of whom has perfect information about the quality of its performance of the assigned tasks. The association of the professional title in question to the reserved activities leads to a monopoly (formed by the individuals holding a certain professional title of technical engineer) on the performance of certain tasks in the scope of the profession of technical engineer. Reserved activities also restrict the supply of professional services in the market, which negatively affects competition. In fact, professionals not registered in the respective professional association or that do not have the additional requirements needed to perform a certain task are prevented from carrying out those activities. This leads to higher prices (in particular, through output restriction) and less diversity and innovation (including through the use of new techniques), with a negative impact on businesses and consumers, restricting the choices available to them. Moreover, it tends to lead to a worse match between the type of professional services offered and the type of services demanded, as some services demanded require a lesser degree of specialisation of the individuals who provide them. These effects are aggravated by the (additional) restrictions on entry in a certain profession.

We recommend that: (i) tasks reserved for particular technical professions (i. e. architects, engineers or technical engineers), (ii) tasks reserved for specific specialisations within a profession (e. g. civil engineers, environmental engineers), and (iii) tasks reserved for professionals with a certain minimum number of years of experience should be reviewed in order to open such acts to other professions from the same technical group, taking into consideration the aim to ensure the quality of the output provided rather than to limit those who can perform such tasks. We also recommend that the corresponding professional association foresees a special regime where other technical professionals can meet the qualifications required for the exercise of particular reserved tasks after a case-by case evaluation of their curricula. This should be based on objective and transparent criteria (such as previous experience and additional training).

22

Decision 8/2017 ("Table of fees charged by the Professional Association of Technical Engineers in 2017")

Art. 2 (1), Art. 2 (2), Art. 3 (2) and Art. 3 (3)

Professional internship

The fee charged by the Professional Association of Technical Engineers for the enrolment of applicants for the professional title of Technical Engineer in the professional internship is:(i) EUR 25 in cases in which the individuals enrol before finishing their degree and the internship begins within six months of the date of finishing their degree; and(ii) EUR 150 in cases in which the individuals enrol after finishing their degree or the internship begins within a period that exceeds six months from the date of finishing their degree.

The policy objective of the provision seems to be the economic sustainability of the operation of the Professional Association of Technical Engineers.

A fee in favour of a public entity is the value due for the provision of a specific public service, for the use of a property in the public domain or for the removal of a legal obstacle to the behaviour of private entities (General Tax Law (Art. 4 (2)), approved by Decree-Law 398/98). Administrative fees lead to an increase in the costs incurred by the economic agents, potentially leading to higher prices. Therefore, they might prevent agents from entering the market or they might make it significantly more difficult for them to operate in it. The administrative bodies and agents should act, in the exercise of their functions, so as to respect the principle of proportionality (Constitution of the Portuguese Republic (CRP) (Art. 266 (2)), approved by Decree of 10 April 1976), that also applies to administrative fees. As such, those fees should be correlated with the costs incurred with the provision of the underlying services (and, consequently, should not be a means for the administrative bodies and agents to collect revenues), should be based on transparent methodology and should not be discriminatory. However, there is no publicly available information concerning the specific criteria that were used to calculate the administrative fee established in the provision and it was not possible to identify an economic rationale for that fee. Therefore, the provision may make individuals who want to be technical engineers incur unnecessary costs. In fact, the provision requires them to pay more for the professional internship and, consequently, may reduce the supply of technical engineers available to businesses and consumers.

The fee established in the provision should be calculated using transparent, non-discriminatory and cost-based criteria.

Financial and economic professions: Auditors

No

No and title of Regulation

Article

Thematic Category

Brief description of the potential obstacle

Policy objective

Harm to competition

Recommendations

1

Law 140/2015 "Bylaws of the Professional Association of Auditors"

Art. 6

Self-regulating regime

This provision describes the attributions and competences given to the public professional association, allowing it to have control over access and exercise of the self-regulated profession, including on i) the elaboration and implementation of technical rules, ii) definition of ethical principles, iii) criteria for internships, iv) definition of academic qualifications, v) recognition of professional qualifications obtained outside the national territory, vi) attribution of the exclusive right to grant professional titles, vii) determination of reserved activities and viii) exercise of disciplinary powers.

It is our understanding that this provision aims to ensure the exercise of the regulatory function, including the disciplinary function, as well as the representative function, taking into account the interests of users of the professional services, by one and the same single entity, the professional association. In the Portuguese Constitution the autonomy and administrative decentralisation to the professional associations is recognised to ensure the defence of public interest and the fundamental rights of citizens, and also to guarantee the self-regulation of the professions that require technical independence. This regulatory model is based on the public interest of these professions, through the designation of state powers to those entities and with two main characteristics: the exclusivity on granting the professional title and the obligation of being registered within the professional association to practice the profession, which qualifies the nature of the regulation as being mandatory and unitary.

The harm to competition arising from the regulatory model established by Law 2/2013 stems from the centralisation in a single entity of the powers to regulate and represent the profession. Because each professional association, apart from representing the profession, controls access to it and its exercise, the regulations issued may create disproportional and anti-competitive restrictions. The freedom to choose and exercise a profession is a fundamental right of the citizen. Also, the freedom of movement of workers and free establishment to provide services are fundamental principles of the EU internal market. Restrictions to these principles, in the pursuit of the public interest, must be well justified and proportional. When a professional association acquires full responsibility to regulate access to the profession and its exercise as well as the conduct of its members, this may have an anti-competitive impact. In fact, professional associations may adopt rules that reduce incentives or opportunities for stronger competition between operators, such as restrictions on i) the elaboration and implementation of technical rules, ii) definition of ethical principles, iii) criteria for internships, iv) definition of academic qualifications v) recognition of professional qualifications obtained outside the national territory (even if bounded by the criteria set by Directive 2005/36/EC amended by Directive 2013/55/EC, transposed by Law 9/2009 and Law 26/2017), vi) attribution of the exclusive right to grant professional titles, vii) determination of reserved activities and viii) exercise of disciplinary powers. As the governing bodies of public professional associations are exclusively composed of their members, there is a risk that their members' interests will not coincide with the public interest. This is one significant reason for including within at least some governing bodies of a professional association, lay people representing the interests of relevant social groups, such as consumer associations, other professionals, and high-profile people with experience in regulatory issues.

We recommend that the regulatory function should be separated from the representative function for self-regulated professional associations, either through the creation of an over-arching supervisory body by sector or trade, or through the creation of a supervisory body inside the current professional orders with the necessary "Chinese walls". The supervisory body takes on the main regulation of the profession such as access to the profession and similar functions. The board of the regulatory body will include not only representative of the profession but also lay people, including high-profile experienced individuals from other regulators, representatives of consumer organisations and academia.

2

Law 140/2015 “Bylaws of the Professional Association of Auditors"

Art. 9

Mandatory registration / Protected professional title / Reserved activities

Only those registered in the professional association can use the professional title of auditors or of firms of auditors and exercise the profession.

Registration is a mechanism to organise professionals with the capacity to exercise the activity and also to validate those professionals before consumers. The objective criteria are to regulate access to and the exercise of the profession. Registration may be justified on grounds of legal certainty, so consumers are informed that the professionals are certified to provide those services. The professional association acts as being endowed with public powers transferred by the state to this function. The professional association's exclusive power to attribute the professional title was adopted in Framework Law 2/2013, which established a self-regulatory model for several professions. Registration and the use of the title enable consumers to be assured that the professionals are certified to provide those services.

Mandatory registration in a professional association in order to exercise the profession implies an administrative procedure/burden that results in entry costs (e.g., time frame of the procedure itself, registration fees and monthly fees, amongst others). Using mandatory registration as a mechanism to access the profession can be restrictive. The possibility of extending the obligation of registration to non-nationals providing services in the national territory and to all those who practice acts of the profession on a permanent basis can be exempted if they are already registered in a mandatory regime of public registration. Hence, the registration, if needed, is not necessarily harmful in itself, except when it is combined with the establishment of reserved work. For the exercise of the reserved work of auditors, it also follows the protection of the title. Protected title with reserved work may exclude other professionals from the exercise of the activity, reducing the number of suppliers in the market and increasing costs to consumers. In general, reserved activities or tasks should be abolished in cases where: (i) the protection is disproportionate to the policy objective because the tasks may already be performed by other well-qualified professionals or are not a danger to public safety; (ii) there is strong and well-regulated protection of the professional title which guarantees the quality of the professionals that are allowed to work; or (iii) the restriction is no longer required owing to legal, societal or professional developments that make the restriction obsolete by its objective.

There is no recommendation regarding the mandatory registration in the professional association. However, the professional title combined with reserved activities is harmful and we recommend that the provisions should be revised as a whole with a view to reduce or lift reserved activities.

3

Law 140/2015 “Bylaws of the Professional Association of Auditors"

Art. 49(3)

Limit in years of activity

When working under a contract with another individual auditor or with an auditing firm, an auditor can only exercise without exclusivity his/her activity as a dependent worker for a maximum period of 3 years.

This rule aims to guarantee the quality of service, transparency, stability and quality control of auditing firms. This rule is related to Art. 91 para. 1 of the bylaws, which establishes an exclusivity principle on the exercise of the activity (although not mandatory). It is stated in the recital of the Bill 292/XII (approved as Law 140/2015), that the contractual limitations of this profession are justified by the high standards of independence.

This regulation has a negative impact on the mobility of professionals between jobs or employers, as it prevents them from reacting quickly to market opportunities. After three years of the initial contract, the professional is obliged to practice this activity with exclusivity, which can lead to a lower incentive to innovate and less opportunity to compete with others. This may outweigh eventual positive effects gained from exclusivity, such as a stronger incentive by the employer to invest in the acquisition of human capital by the employee. Moreover, there was no justification presented on the need to change the non-exclusivity status after 3 years.

We recommend that the legislator conducts a technical study to assess the proportionality of limitations to the non-exclusivity exercise of the auditors profession taking into consideration the policy objective as well as the EU Directive of (Auditing) 2006/43/EC (amended by EU Directive 2014/56/EC) and the EU Regulation (of Auditing) 537/2014.

4

Law 140/2015 "Bylaws of the Professional Association of Auditors"

Art. 55(1)(2)

Information sharing

Clients must inform the Professional Association of Auditors about the details of the contract they sign with an auditor or an auditing firm, whenever the activity to be audited pursues a public interest as defined by law: the name of the auditing firm or professional, nature and duration of the service provided.

The policy objective underlying this provision is considered by several stakeholders to ensure that the Professional Association of Auditors can access information that is relevant for the monitoring of the legal obligations of auditors.

The provision determines the need for clients to regularly send operational information concerning the auditors they hire to the Professional Association of Auditors. Such information is, by nature, sensitive (as far as its underlying operational relevancy is concerned) and, consequently, it tends to be considered by economic agents as confidential, given that it contains business secrets. However, the members of the bodies of the Professional Association of Auditors are, essentially, members of that professional association and, as such, auditors. Those auditors compete (not only with each other, but also and most importantly) with the other auditors, who are not members of the bodies in question. Therefore, the provision places the auditors who are not members of the bodies of the Professional Association of Auditors at a competitive disadvantage. In fact, the provision allows the other auditors to have access to sensitive information about their competitors, who have significant incentives for (improperly) using that information to adjust their business decisions. Alternatively, the provision increases auditors’ incentives to collude or to concert behaviours, instead of competing, given that it allows them to have access to a mechanism of exchange of operational information. As a result, the provision may lead to an avoidable increase in costs incurred by consumers of services provided by auditors. In fact, the provision potentially increases fees charged by auditors and reduces, quantitatively and qualitatively, the offers provided by those professionals. Nevertheless, the need for an entity to verify the auditors’ compliance with their legal obligations is considered to be reasonable. Hence, the need for auditors to regularly send operational information, which is, by nature, sensitive and, therefore, confidential, to such entity is also considered to be reasonable.

The requirement for clients to regularly send operational information to the Professional Association of Auditors should be abolished. Furthermore, the bylaws should be amended to include a provision requiring: i) that monitoring of the auditors’ compliance with their legal obligations should be carried out by an independent, competent and impartial body not composed of licensed auditors; and ii) auditors shall provide to the independent body only that information which is strictly necessary for the purposes of monitoring compliance with the bylaws.

5

Law 140/2015 "Bylaws of the Professional Association of Auditors"

Art. 57

Information sharing

Auditors must inform the Professional Association of Auditors about the details of the contracts signed with their clients: (i) in the beginning and the end of all the contracts formalised in the scope of the fulfilment of their public interest mission, within 30 days from the respective event; and (ii) the professional activity that is carried out annually, including the identification of their clients, the characterisation of the activities of the clients, the listing of certifications of accounts issued and the fees charged and the period of time to which they concern.

The policy objective underlying this provision is considered by several stakeholders to ensure that the Professional Association of Auditors can access information that is relevant for the monitoring of the legal obligations of auditors.

The provision determines the need for auditors to regularly send operational information to the Professional Association of Auditors. Such information is, by nature, sensitive (as far as its underlying operational relevancy is concerned) and, consequently, it tends to be considered by economic agents as confidential, given that it contains business secrets. However, the members of the bodies of the Professional Association of Auditors are, essentially, members of that professional association and, as such, auditors. Those auditors compete (not only with each other, but also and most importantly) with the other auditors, who are not members of the bodies in question. Therefore, the provision places the auditors who are not members of the bodies of the Professional Association of Auditors at a competitive disadvantage. In fact, the provision allows the other auditors to have access to sensitive information about their competitors, who have significant incentives for (improperly) using that information to adjust their business decisions. Alternatively, the provision increases auditors’ incentives to collude or to concert behaviours, instead of competing, given that it allows them to have access to a mechanism of exchange of operational information. As a result, the provision may lead to an avoidable increase in costs incurred by consumers of services provided by auditors. In fact, the provision potentially increases fees charged by auditors and reduces, quantitatively and qualitatively, the offers provided by those professionals. Nevertheless, the need for an entity to verify the auditors’ compliance with their legal obligations is considered to be reasonable. Hence, the need for auditors to regularly send operational information, which is, by nature, sensitive and, therefore, confidential, to such entity is also considered to be reasonable.

The requirement for clients to regularly send operational information to the Professional Association of Auditors should be abolished. Furthermore, the bylaws should be amended to include a provision requiring: i) that monitoring of the auditors’ compliance with their legal obligations should be carried out by an independent, competent and impartial body not composed of licensed auditors; and ii) auditors shall provide to the independent body only that information which is strictly necessary for the purposes of monitoring compliance with the bylaws.

6

Law 140/2015 "Bylaws of the Professional Association of Auditors"

Art. 62(1)

Transparency report

Auditors and auditing firms that provide services to public entities must present an annual transparency report , which must be published on their website within 3 months of the end of each financial exercise.

This provision intends to ensure control by the Professional Association of Auditors on the transparency and conflict of interests when auditors and auditing firms provide services to public entities.

The maximum period of time for auditors and firms of auditors to publish an annual transparency report defined in the Portuguese provision is shorter than the period in Regulation (EU) 537/2014, Art. 13, and in the legal framework concerning audit monitoring, for which the period is four months. The shortened period for the publication of an annual transparency report imposes costs on auditors and auditing firms, and may lead to uncertainty about the accuracy of these reports. It also leads to some uncertainly for firms operating across national borders which must comply with varying requirements, also imposing additional costs. Because of the difference in requirements it may be considered discriminatory. At the very least it increases the human and financial resources necessary for individuals and businesses to comply with regulation in Portugal as they have to act (one month) faster in order to guarantee that they comply with all the applicable regulations; this may be a disincentive for potential competitors to enter the market.

Change the period to four months, in accordance with Art. 13 of of European Regulation (EU) 537/2014.

7

Law 140/2015 "Bylaws of the Professional Association of Auditors"

Art. 89

Incompatibilities

Defines several specific incompatibilities to the exercise of the auditor profession.

It intends to guarantee the independence of the professional on the exercise of his/her activity.

Incompatibilities clauses are necessary to guarantee transparency, professional independence and professional ethical values. However, such provisions limits the activity of the professional, which can result in an increase in prices charged by the professionals.

We recommend that the legislator conducts a technical study to assess the proportionality of the auditors incompatibility regime taking into consideration the policy objective as well as the EU Directive of (Auditing) 2006/43/EC (amended by EU Directive 2014/56/EC) and the EU Regulation (of Auditing) 537/2014.

8

Law 140/2015 "Bylaws of the Professional Association of Auditors"

Art. 91(2)

Exclusivity regime

The activity of auditing must as a general rule be exercised with exclusivity. If it is not, the following impediments apply: the impossibility of auditing public entities; the accumulation of services in relation to more than 10 companies/entities, or in companies that in total present indicators that exceed the quintuplets of 2 of the limits indicated in Art. 262 of the Companies Code (balance sheet total: EUR 1 500 000; total net sales and other income: EUR 3 000 000; number of employees employed on average during the year: 50).

According to the stakeholder consulted (a public entity), this provision intends to guarantee the quality of the professional service by ensuring that the auditor is available for the assigned work.

Incompatibilities clauses are necessary to guarantee transparency, professional independence and professional ethical values. However, such provisions limits the activity of the professional, which can result in an increase in prices charged by the professionals.

We recommend that the legislator conducts a technical study to assess the proportionality of limitations to the non-exclusivity exercise of the auditors profession taking into consideration the policy objective as well as the EU Directive of (Auditing) 2006/43/EC (amended by EU Directive 2014/56/EC) and the EU Regulation (of Auditing) 537/2014.

9

Law 140/2015 "Bylaws of the Professional Association of Auditors"

Art. 91(5)

Impediments

The auditors or partners in auditing firms that have served as administrators or directors of a public entity within the last four years, cannot provide auditing services to this same public entity.

This provision intends to guarantee the independence of professionals and to avoid a situation of self-review, although stakeholders were not able to justify the choice of the four-year period.

This provision limits the activity of professionals and their freedom of mobility between jobs or employers, as it prevents them from reacting quickly to market opportunities. This requirement can reduce the incentive to enter the market of auditing if better opportunities appear, reducing in this way the number of players.

We recommend that the legislator conducts a technical study to assess the proportionality of the auditors incompatibility regime taking into consideration the policy objective as well as the EU Directive of (Auditing) 2006/43/EC (amended by EU Directive 2014/56/EC) and the EU Regulation (of Auditing) 537/2014.

10

Law 140/2015 "Bylaws of the Professional Association of Auditors"

Art. 91(6)

Impediments

The auditor or the partners of an auditing firm that have provided auditing services to an entity of public interest are not allowed to sign labour contracts with those audited entities during his/her mandate as well as within three years after the mandate is over.

This provision intends to guarantee the independence of professionals and to avoid a situation of self-review, although the stakeholders were not able to justify the choice of the three-year period.

This provision limits the activity of professionals and their freedom of mobility between jobs or employers, as it prevents them from reacting quickly to market opportunities. This requirement can reduce the incentive to enter the market of auditing if better opportunities appear, reducing in this way the number of players. However, employment by audited entities of former statutory auditors or of employees of statutory auditors or audit firms is subject matter that is regulated by the EU Directive of Auditing 2006/43/EC (amended by EU Directive 2014/56/EC). Art. 22-A (1)(2) imposes only a prohibition that a statutory auditor or a key audit partner who carries out a statutory audit on behalf of an auditing firm does not, before a period of at least one year, or in the case of statutory audit of public-interest entities a period of at least two years, has elapsed since he or she ceased to act as a statutory auditor or key audit partner in connection with the audit engagement: "(a) take up a key management position in the audited entity; (b) where applicable, become a member of the audit committee of the audited entity or, where such committee does not exist, of the body performing equivalent functions to an audit committee; (c) become a non-executive member of the administrative body or a member of the supervisory body of the audited entity". Member States shall ensure that employees and partners other than key audit partners of a statutory auditor or of an auditing firm carrying out a statutory audit, as well as any other natural person whose services are placed at the disposal or under the control of such a statutory auditor or auditing firm, do not, when such employees, partners or other natural persons are personally approved as statutory auditors, take up any of the duties referred to in points (a), (b) and (c) of paragraph 1 before a period of at least one year has elapsed since he or she was directly involved in the statutory audit engagement.

We recommend that the legislator conducts a technical study to assess the proportionality of the impediment to pursue the exercise of a self-regulated profession that may be limiting the activity of the professionals taking into consideration the policy objective, and take into consideration Art. 22-A (1) (2) of EU Directive 2006/43/EC (amended by EU Directive 2014/56/EC), considering limiting the period to a maximum of two years.

11

Law 140/2015 "Bylaws of the Professional Association of Auditors"

Art. 117

Multidisciplinary activities of professional firms

Professional firms of auditors have as their sole corporate objective the delivery of the activities reserved for auditors, namely of those public interest functions (Art. 41 to Art. 47 of the bylaws). Auditors (and firms) are also allowed to perform ancillary functions to the sole corporate objective (Art. 48 of the bylaws - teaching; being members of audit committees and supervisory or oversight bodies; consultancy in matters related to their training and professional qualifications; insolvency administrators and liquidators; administrators or managers of companies owned by auditing firms).

This provision prohibits the establishment of multidisciplinary professional firms, except in the cases identified in article 48. These restrictions are grounded in the public interest, professionals' independence and client privilege.

To restrict multidisciplinary activity in a professional firm is to restrict the association of different professionals, belonging to different professional associations (some may not even belong to a public professional association), who would exercise their professional activities within the same firm and in the pursuit of the firm’s corporate or social objective(s). In a professional firm, this restriction takes the form of a restriction on partnership – restricting, or banning altogether, non-professional partners. To rule out multidisciplinary activity in the same professional firm, between potentially complementary service providers, harms competition and can be detrimental to consumer welfare. In fact, this restriction does not allow for the full exploration of economies of scope that come with the offer of different services by a same “service delivery unit” that shares infrastructure and human capital . It foregoes specialisation gains and service quality gains resulting from the interaction between a wider range of professionals. This also means foregoing the exploitation of economies of scale and the advantages of branding. It also does not allow for the mitigation of the double marginalisation (or double mark-up) problem that come with multidisciplinary activities which can complement each other, by segmenting the services provided. This means foregoing lower average costs in a multi-product firm, therefore leading to higher fees being charged to clients, while preventing clients from further accruing benefits that could be gained from a more convenient "one-stop shop" for a wider range of professional services. Ruling out multidisciplinary activities within a professional firm can reduce the scope for better risk management between different professional activities within the same professional firm, as they may be subject to non-identical demand volatility or uncertainty - i.e., reduction in the scope for internal risk-spreading to be understood as the ability to transfer resources in response to fluctuations in demand. To offer a wider range of professional services means to be better prepared to face market uncertainties. Furthermore, opening up a professional firm to multidisciplinary activities is likely to ease the introduction of innovative products but also to spur innovation in the delivery of already existing products or range of products.

We recommend that the prohibition of multidisciplinary practice in professional firms should be removed. The creation of such "alternative business structures" (ABS) will lead to more innovation, a broader range of services and easier access to services for businesses and consumers.

12

Law 140/2015 “Bylaws of the Professional Association of Auditors"

Art. 118(1)(a)

Partnership/ownership of professional firms

The majority of the share capital and voting rights in an audit firm must always belong to statutory auditors, audit firms, or auditors or audit firms from other EU Member States, and the remaining share of capital can be detained by any natural or legal person.

Such restriction aims to guarantee professional independence, autonomy, adherence to professional ethical rules and the pursuit of the public interest.

Ownership, shareholding and partnership rules in financial professional firms (for economists, auditors, certified accountants and customs brokers), are less stringent than in other professions, e.g. legal professions, since only the majority of their sharing capital and voting rights must be owned by professional partners (and not the total). Non-professional partners may own the remaining capital and voting rights. This option follows what is stated in Framework Law 2/2013. However, the rules imposed by the Directive on Auditing (Directive 2006/43/EC, as amended) are less stringent as they only require that a majority of the voting rights in an auditing firm must be held by other auditing firms, approved in any EU Member State, or by natural persons who satisfy the requirements for access to the profession of auditor (see Art. 3(4)(b) of Directive 2006/43/EC). This directive seems not to allow Members States to impose additional requirements on ownership/shareholding such as requiring that a majority of the sharing capital be owned by professionals or auditors, constituted under national law (see Art. 3(4) last paragraph, of Directive 2006/43/EC). To open up a professional firm to external ownership means to open up the firm to more investment, by allowing access to a wider pool of capital. External ownership, partial or total, means capital ownership by non-professionals, ownership of voting rights, or both. This opening will enable professional firms to satisfy a greater pool of consumers and reap the benefits of a larger scale of operations. For younger professionals, not yet well established in their profession, it would also mean more opportunities to set up their own professional firm and compete in the market. This will generate a greater ability by professional firms to compete in the Single Market and internationally. It would also allow for improved risk management among the owners of a professional firm, hence, lower operational costs and possibly lower prices charged to consumers for the different professional services being delivered in the market. Ultimately, all these restrictions on ownership, shareholding and partnership over professional firms, are detrimental to firms across the entire economy, especially SMEs, and to households, as their relaxation can be expected to lead to an increase in their welfare.

We recommend that the ownership and partnership of all professional firms be opened to other professionals and non-professionals, that is, they should be open to individuals outside the profession. We also recommend that other professionals and non-professionals be allowed to hold a majority of an auditors’ professional firm’s social capital. In line with Art. 3(4)(b) of the Directive on Auditing Services (Directive 2006/43/EC) only the majority of voting rights must be held by auditors.

13

Law 140/2015 “Bylaws of the Professional Association of Auditors"

Art. 119(1)

Partnership / Ownership of professional firms

The auditor (individual) cannot be a partner in more than one auditing firm at the same time, except during the period when leaving one firm to join another.

This restriction aims to ensure the independence of auditors and to avoid conflicts of interest. Such a conflict could arise from sharing confidential and sensitive information about clients and about the commercial strategies of auditing firms.

This provision restricts the freedom of individual professionals to participate in the capital of more than one auditing firm, which may limit their profits, reduce their incentives to invest and benefit the companies that have clients with greater economic weight. This may ultimately result in higher prices and less social welfare. This also discourages innovation. Moreover, during the period of transition, the auditor is not allowed to sign auditing reports in both companies, which limits his activity. However, the same bylaws allow that auditing firms can be partners of another auditing firm(s) - see Art. 120 of the bylaws. Our interpretation is that individuals may, indirectly, be partners of one auditing firm that can be, by itself, a partner of more than one auditing firm. Therefore, taking into consideration the policy objective that auditors (the individual) should remain impartial and not be able to share information across other companies, we envisage alternatives and less restrictive solutions whereby these individuals can own or participate in other auditing firms, provided there are clear "Chinese walls" between the auditing function and the investment decisions.

We recommend that the provision allowing auditors (the individual) to be a partner in more than one auditing firm, be amended and redrafted, provided there are clear "Chinese walls" between the auditing function and investment decisions.

14

Law 140/2015 “Bylaws of the Professional Association of Auditors"

Art. 148(1)(c)

Academic qualifications

A pre-Bologna degree, a masters or a PhD, in any field, is required to access the auditor profession.

To ensure an adequate quality of service, self-regulated professions are subject to regulations of entry and exercise in the market. Entry rules typically include academic qualification requirements, completion of an internship and membership in a professional body.

For auditors, it is not enough for a candidate to hold a specific undergraduate degree (under the Bologna system). By contrast, according to Directive 2006/43/EC on Auditing Services, it suffices for educational qualifications that a natural person "holds a university entrance or equivalent level", then completed a course of theoretical instruction, underwent practical training and passed an examination of professional competence at university final or equivalent examination level, organised or recognised by the Member State concerned. Directive 2006/43/EC also allows alternative routes concerning education qualifications through long-term practical experience. A Member State may approve a person to become an auditor if he or she can show either that for 15 years, they have engaged in professional activities which have enabled them to acquire sufficient experience in the fields of finance, law and accountancy, and have passed an examination of professional competence, or that they have, for seven years, engaged in professional activities in those fields and have, in addition, undergone practical training and passed an examination of professional competence.

We recommend that the professional association should work with the legislator to set a transparent, proportional and non-discriminatory process for identification of alternative routes of educational qualifications through long-term practical experience (in line with Art. 11 of Directive 2006/43/EC on Auditing Services). This will allow the following to register as auditors: professionals with over 15 years of professional experience in the fields of finance, law or accountancy and having passed an examination of professional competence; professionals who have engaged in professional activities in those fields for seven years and have, in addition, undergone practical training and passed an examination of a professional nature.

15

Law 140/2015 “Bylaws of the Professional Association of Auditors"

Art. 149(1)(b)

Residence requirements

To register with the professional association foreign professionals need to have legal residence in Portugal for at least three years and provide proof of this.

This provision intends to ensure that foreign auditors meet international standards (IFAC). Items b) and c) of paragraph 1 establish requirements to ensure that foreign auditors are familiar with the national language and law. Paragraph 3 establishes a reciprocity requirement, as a common practice to guarantee equal rights and conditions among citizens of different states.

This provision establishes a criterion that may exclude some well-qualified foreign professionals from the Portuguese market. As such, this provision represents a geographical barrier to access the profession. The three-year residency requirement is harmful as it excludes from the market foreign professionals with less than three years of legal residence in Portugal. In fact, this requirement may not be the most suitable or adequate to assess the competences required (knowledge of the national language or law and the tax system).

Taking into account that attendance in the preparatory course and approval in the aptitude test is already mandatory for the professional , which guarantees the policy objective (knowledge of the language, national legislation and the tax system), we recommend that the requirement of the three-year residency in Portugal should be removed.

16

Law 140/2015 “Bylaws of the Professional Association of Auditors"

Art. 153 (3)(4)

Entry exam

In order to start the internship the candidate must successfully pass an entry exam (organised, prepared and revised by the OROC) divided into a theoretical part and a practical part.

The mandatory admission exam prior to the internship is intended to guarantee that all candidates have the technical knowledge to exercise the profession with a minimum level of quality, considering that candidates can hold any Pre-Bologna university degree, a master's or a PhD, in any field. An admission exam is also required by Directive 2006/43/EC in its Arts. 6, 7 and 8. According to stakeholders, if exemptions from the admission exam were introduced in the bylaws, possible discrimination among candidates would follow. Furthermore, it would be necessary for the professional association or other entity to assess to what extent the different university degree programmes include the required subjects/disciplines and standards. Note that although the admission exam is mandatory, the preparation for the exam (the course provided by the professional association or any other training) is not mandatory; the candidate could simply apply to take the exam.

This provision establishes a requirement to access the professional internship that may dissuade candidates from attempting to join the profession. Arts. 6, 7, 8 and 10 of Directive 2006/43/EC establish practical training for three years and an admission exam as a prerequisite for the exercise of the activity. However, Art. 9 para. 1 of this directive allows “by way of derogation from articles 7 and 8, a Member State may provide that a person who has passed a university or equivalent examination or holds a university degree or equivalent qualification in one or more of the subjects referred to in article 8 may be exempted from the test of theoretical knowledge in the subjects covered by that examination or degree” and para. 2 “by way of derogation from article 7, a Member State may provide that a holder of a university degree or equivalent qualification in one or more of the subjects referred to in article 8 may be exempted from the test of the ability to apply in practice his or her theoretical knowledge of such subjects if he or she has received practical training in those subjects attested by an examination or diploma recognised by the State”, thus granting exemption from the admission exam, in case the candidate holds one or more determined qualifications or practice in those fields (e.g. general accounting theory and principles; legal requirements and standards relating to the preparation of annual and consolidated accounts; international accounting standards; etc.). This restriction may reduce the number of professionals available in the market of auditing activities, which is likely to cause the prices charged to customers to be higher than they would otherwise be.

We recommend that the entry exam into the profession follows Art. 9(1)(2) of Directive 2006/43/EC on Auditing Services, exempting candidates from certain subjects in the test of theoretical knowledge when they can provide evidence of: i) a university degree or equivalent qualification in one or more of those subjects; ii) of receiving practical training in those same subjects attested by an examination or diploma recognised by the state.

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Law 140/2015 “Bylaws of the Professional Association of Auditors"

Art. 155

Entry exam

Inscription to perform a professional internship in the Professional Association of Auditors depends on passing an admission exam.

The mandatory admission exam prior to the internship is intended to guarantee that all candidates have the technical knowledge to exercise the profession with a minimum level of quality, considering that candidates can hold any Pre-Bologna university degree, a master's or a PhD, in any field. An admission exam is also required by Directive 2006/43/EC in its Arts. 6, 7 and 8. According to stakeholders, if exemptions from the admission exam were introduced in the bylaws, possible discrimination among candidates would follow. Furthermore, it would be necessary for the professional association or other entity to assess to what extent the different university degree programmes include the required subjects/disciplines and standards. Note that although the admission exam is mandatory, the preparation for the exam (the course provided by the professional association or any other training) is not mandatory; the candidate could simply apply to take the exam.

This provision establishes a requirement to access the professional internship that may dissuade candidates from attempting to join the profession. Arts. 6, 7, 8 and 10 of Directive 2006/43/EC establish practical training for three years and an admission exam as a prerequisite for the exercise of the activity. However, Art. 9 para. 1 of this directive allows “by way of derogation from articles 7 and 8, a Member State may provide that a person who has passed a university or equivalent examination or holds a university degree or equivalent qualification in one or more of the subjects referred to in article 8 may be exempted from the test of theoretical knowledge in the subjects covered by that examination or degree” and para. 2 “by way of derogation from article 7, a Member State may provide that a holder of a university degree or equivalent qualification in one or more of the subjects referred to in article 8 may be exempted from the test of the ability to apply in practice his or her theoretical knowledge of such subjects if he or she has received practical training in those subjects attested by an examination or diploma recognised by the State”, thus granting exemption from the admission exam, in case the candidate holds one or more determined qualifications or practice in those fields (e.g. general accounting theory and principles; legal requirements and standards relating to the preparation of annual and consolidated accounts; international accounting standards; etc.). This restriction may reduce the number of professionals available in the market of auditing activities, which is likely to cause the prices charged to customers to be higher than they would otherwise be.

We recommend that the entry exam into the profession follows Art. 9(1)(2) of Directive 2006/43/EC on Auditing Services, exempting candidates from certain subjects in the test of theoretical knowledge when they can provide evidence of: i) a university degree or equivalent qualification in one or more of those subjects; ii) of receiving practical training in those same subjects attested by an examination or diploma recognised by the state.

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Law 140/2015 “Bylaws of the Professional Association of Auditors"

Art. 157(1)

Professional internship

The internship must begin within 3 years of passing the entry exam.

We have the information from the stakeholder consulted that this provision intends to ensure that professionals keep their knowledge up to date.

This provision may delay the entrance into the market of new professionals, who for some reason do not have the possibility of starting the internship within this period.

We recommend to study, probably using benchmarking, the extension of the deadline, especially in fully justified cases.

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Law 140/2015 “Bylaws of the Professional Association of Auditors"

Art. 157(2)(4)(5); and Art. 159(3)(8)

Professional internship

The practical internship lasts at least three years, and must include a minimum of 700 hours per year of activities within the scope of functions of public interest provided for in the statutes of the professional association. This period may be reduced by the internship committee to a minimum of one to two years, for trainees who have exercised relevant functions in the public or private sector for at least five years. The internship itself may be waived for trainees who have exercised relevant functions in the public or private sector for at least 10 years.

We have the information from the stakeholder consulted that this provision intends to ensure that professionals keep their knowledge up to date.

Directive 2006/43/EC confirms as a rule, the minimum duration of three years for the practical training, and also allows for exemptions of this training. The internship evaluation is carried out by peers from the professional association. This may give rise to a conflict of interest that may not ensure the required independence of the evaluators and may also result in a lower number of candidates joining the professions. This, in turn, can have a negative impact on competition in the delivery of financial services in the market. The (almost) complete absence of an e-learning option covering the theoretical training period of any internship may extend the duration of this training beyond what is necessary. It also increases the cost of providing face-to-face tutoring, hence, the internship fees. In addition, it increases the opportunity costs a trainee must bear of having to attend those training courses in person.

No recommendation with regard to the duration of the internship. However, we recommend that the subjects that are part of the academic qualification of the internship should not be repeated in the theoretical training offered during the internship; also, we recommend that the theoretical training also be conducted via e-learning. We recommend that the final evaluation of the internship is conducted by a board, independent of the professional association, which may include members of the latter, but must also include professionals, such us university professors and other lay people of recognised merit.

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Law 140/2015 “Bylaws of the Professional Association of Auditors"

Art. 177(1); and Art. 182(2)(3)

Mandatory registration of foreign professionals / Requirements

Auditors from other EU/EEA countries have to take an aptitude test identified in Art. 182 of the bylaws to be able to register in the professional association in Portugal, and exercise the profession. Before that, the candidate must attend a compulsory preparatory course (with a minimum of 80% individual attendance time for each module). Those professionals who have exercised any related activity in Portugal for the last 10 years can be exempted from attending the preparatory course.

The Auditing Directive (amended by Directive 2014/56/EU) and the European Regulation (EU) 537/2014 impose on Member States the duty to ensure that an auditor has the adequate knowledge to exercise the profession in the host Member State.

The need to pass an aptitude test is a requirement that may exclude from the market some professionals and increase entry costs, which can lead to a restriction in the market of qualified professionals and can lead to increased prices compared to those entering in the market. Note that Art. 14 of the Auditing Directive (amended by Directive 2014/56/EU) states: "The competent authorities shall establish procedures for the approval of statutory auditors that have been approved in other Member States. These procedures may not go beyond the obligation to carry out an adaptation period [shall not exceed three years] as defined in Article 3 (1) (g) of Directive 2005/36/EC or to pass an aptitude test defined in point (h) of that provision." The host Member State shall decide whether the applicant seeking approval is to be subject to an adjustment period or an aptitude test. Hence, Portugal had to take a decision between choosing the aptitude test or the adaptation period. Without further evidence from stakeholders arguing to the contrary, it seems that the legislator has chosen an adequate requirement. With regard to the compulsory attendance of the preparatory course (with a minimum of 80% individual attendance time for each module) we suggest that the preparatory course could not be mandatory but rather optional for the access to the mandatory aptitude test.

We recommend that the requirement to attend the preparatory course should not be necessary to access the professional aptitude test that is already mandatory in Portugal.

21

Regulation 12/2017 "Rules, conditions, principles and procedures applicable in the scope of registration of individuals in the Professional Association of Auditors"

Art. 6(1)(b) and (3)(d)

Minimum residence period of foreign professionals

It sets as a requirement for registration of foreign auditors in Portugal, presentation of evidence of residence in Portugal for at least three years.

The recital of this Regulation states that Directive 2014/56/EU and the European Regulation (EU) 537/2014 impose on Member States the duty to ensure that an auditor has the adequate knowledge to exercise the profession.

This provision establishes a criterion that may exclude well-qualified professionals from the Portuguese market. As such, this provision represents a geographical barrier to accessing the profession. The three-year residency requirement may dissuade well-qualified professionals from entering the national market and competing for auditing services. In turn, restricting competition may have a negative impact on prices as well as on the diversity and innovativeness of the services provided.

Taking into account that it attendance in the preparatory course and approval in the aptitude test are already mandatory for the professional, which guarantees the policy objective (knowledge of the language; and knowledge of the national legislation and tax system), we recommend that the requirement of proof of the three-year residency in Portugal should be removed.

22

Regulation 12/2017 "Rules, conditions, principles and procedures applicable in the scope of registration of individuals in the Professional Association of Auditors"

Art. 7(1)(b)

Preparatory course for foreign professionals

This provision sets as a requirement for the registration of auditors from EU/EEA countries in Portugal attendance in two modules: module 2 (civil law, commercial law, partnership law and labour law) and module 4 (taxation) of the preparatory course (as listed in the table referred to in Art. 20 para. 1). This corresponds to attendance in the preparatory course (with a minimum of 80% individual attendance for each module) as stated in Art. 182 of the bylaws.

It is stated in the recital of this Regulation that Directive 2014/56/EU and European Regulation (EU) 537/2014 impose on Member States the duty to ensure that an auditor has the adequate knowledge to exercise the profession. Art. 14 of the Directive 2014/56/EU establishes as an option for a Member State to require an adjustment/ adaptation period. The concept of "adaptation period" is defined in Art. 3 para. 1 g) of the Directive 2005/36/EC, as a period of supervised practice. According to the directive, the rules for this adaptation period are determined by the Member States.

This provision establishes the obligation for registration in Portugal of EU or EEA auditors to attend a preparatory course, thus creating an extra cost and an extra burden for these professionals. This can act as a disincentive to entering the market of auditing in Portugal.

Even if the preparatory course is made available, taking into account the disposal in Art. 14 of Directive 2014/56/EU and the fact that the professional aptitude test is already mandatory in Portugal, we recommend that the requirement to attend modules 2 (civil law, commercial law, partnership law and labour law) and 4 (taxation) of the preparatory course should not be mandatory for the registration of EU or EEA auditors in Portugal.

23

Regulation 12/2017 "Rules, conditions, principles and procedures applicable in the scope of registration of individuals in the Professional Association of Auditors"

Art. 9(2)(d)

Mandatory registration requirements

The application for registration of firms of auditors with the professional association must be accompanied by any information that the Registration Commission considers relevant.

Policy objective is not clear.

This provision establishes a requirement to provide any information or document that the Registration Commission considers relevant, which may lead to arbitrary decisions concerning the necessary documents, thus preventing the registration of these firms of auditors.

Abolish para. 2 d) of this provision.

24

Regulation 19/2017 "Rules, conditions, principles and procedures applicable in the scope of the internship to be undertaken by individuals who want to register in the Professional Association of Auditors"; and Tabelas de fees and  emolumentos published by Board of OROC.

Art. 4(1)5(1); and Para 1. and Para 12.

Entry exam and professional internship fees

To be registered as an auditor in the Professional Association of Auditors, the candidate must be approved: a) in an aptitude/admission exam that costs EUR 1 430 (each group of modules is EUR 330 and the price of the exam is EUR 110); b) as well as in the internship that costs EUR 2 310 (EUR 210 for inscription and EUR 700 per year).

The internship aims to be a professional initiation, implying not only the integration of the knowledge acquired in school education and the experience of its practical application, but also the perception of the ethical, legal, economic, environmental and human resources, and of management in general that characterise the exercise of the profession, so as to enable the profession to perform competently and responsibly.

Additionally, if the entry exam and the internship fees are too high for candidates, this might lead to fewer candidates joining the registration process, resulting in a lower number of suppliers of legal services competing in the market.

We recommend that the fees required for the entry exam as well as for the internships be calculated using transparent, non-discriminatory and cost-based criteria.

Financial and economic professions: Certified accountants

No

No and title of Regulation

Article

Thematic Category

Brief description of the potential obstacle

Policy objective

Harm to competition

Recommendations

1

Decree-Law 452/99 (last modification by Law 139/2015) "Bylaws of the Professional Association of the Certified Accountants"

Art. 3

Self-regulating regime

This provision describes the attributions and competences given to the public professional association, allowing it to have control over access and exercise of the self-regulated profession, including on i) the elaboration and implementation of technical rules, ii) definition of ethical principles, iii) criteria for internships, iv) definition of academic qualifications, v) recognition of professional qualifications obtained outside the national territory, vi) attribution of the exclusive right to grant professional titles, vii) determination of reserved activities and viii) exercise of disciplinary powers.

It is our understanding that this provision aims to ensure the exercise of the regulatory function, including the disciplinary function, as well as the representative function, taking into account the interests of users of the professional services, by one and the same single entity, the professional association. In the Portuguese Constitution the autonomy and administrative decentralisation to the professional associations is recognised to ensure the defence of public interest and the fundamental rights of citizens, and also to guarantee the self-regulation of the professions that require technical independence. This regulatory model is based on the public interest of these professions, through the designation of state powers to those entities and with two main characteristics: exclusivity on granting the professional title and the obligation of being registered within the professional association to practice the profession, which qualifies the nature of the regulation as being mandatory and unitary.

The harm to competition arising from the regulatory model established by Law 2/2013 stems from the centralisation into a single entity of the powers to regulate and represent the profession. Because each professional association, apart from representing the profession, controls access to it and its exercise, the regulations issued may create disproportional and anti-competitive restrictions. The freedom to choose and exercise a profession is a fundamental right of the citizen. Also, the freedom of movement of workers and the free establishment to provide services are fundamental principles of the EU internal market. Restrictions to these principles, in the pursuit of the public interest, must be well justified and proportional. When a professional association acquires full responsibility to regulate access to the profession and its exercise as well as the conduct of its members, this may have an anti-competitive impact. In fact, professional associations may adopt rules that reduce incentives or opportunities for stronger competition between operators, such as restrictions on i) the elaboration and implementation of technical rules, ii) definition of ethical principles, iii) criteria for internships, iv) definition of academic qualifications and v) recognition of professional qualifications obtained outside the national territory (even if bounded by the criteria set by Directive 2005/36/EC amended by Directive 2013/55/EC, transposed by Law 9/2009 and Law 26/2017), vi) attribution of the exclusive right to grant professional titles, vii) determination of reserved activities and viii) exercise of disciplinary powers. As the governing bodies of public professional associations are exclusively composed of their members, there is a risk that their members' interests will not coincide with the public interest. This is one significant reason for including, within at least some governing bodies of a professional association, lay people representing the interests of relevant social groups, such as consumer associations, other professionals, and high-profile people with experience in regulatory issues.

We recommend that the regulatory function should be separated from the representative function for self-regulated professional associations, either through the creation of an over-arching supervisory body by sector or trade, or through the creation of a supervisory body inside the current professional orders with the necessary "Chinese walls". The supervisory body takes on the main regulation of the profession such as access to the profession and similar functions. The board of the regulatory body will include not only representative of the profession but also lay people, including high-profile experienced individuals from other regulators, representatives of consumer organisations and academia.

2

Decree-Law 452/99 (last modification by Law 139/2015) "Bylaws of the Professional Association of the Certified Accountants"

Art. 9 (1)

Mandatory registration in the professional association/Protected professional title /Reserved activities

Only those registered in the professional association can use the professional title of certified accountant and exercise the profession.

Registration is a mechanism to organise professionals with the capacity to exercise the activity and also to validate those professionals before consumers. The objective criteria are to regulate access to and the exercise of the profession. Registration may be justified on grounds of legal certainty, so consumers are informed that the professionals are certified to provide those services. The professional association acts as being endowed with public powers transferred by the state to this function. The professional association's exclusive power to attribute the professional title was adopted in Framework Law 2/2013, which established a self-regulatory model for several professions. Registration and the use of the title enable consumers to be informed that the professionals are certified to provide those services.

Mandatory registration in a professional association in order to exercise the profession implies an administrative procedure/burden that results in entry costs (e. g. , time frame of the procedure itself, registration fees and monthly fees, amongst others). Using mandatory registration as a mechanism to access the profession can be restrictive. The possibility of extending the obligation of registration to non-nationals providing services in the national territory and all who practice acts of the profession on a permanent basis can be exempted if they are already registered in a mandatory regime of public registration. Hence, the registration, if needed, is not necessarily harmful in itself, except when it is combined with the establishment of reserved work. For the exercise of the reserved work of certified accountants, the protection of the title also follows. Protected title with reserved work may exclude other professionals from the exercise of the activity, reducing the number of suppliers in the market and increasing costs to consumers. In general, reserved activities or tasks should be abolished in cases where: (i) the protection is disproportionate to the policy objective because the tasks may already be performed by other well-qualified professionals or are not a danger to public safety; (ii) there is strong and well-regulated protection of the professional title which guarantees the quality of the professionals who are allowed to work; or (iii) the restriction is no longer required owing to legal, societal or professional developments that make the restriction obsolete by objective.

There is no recommendation regarding the mandatory registration in the professional association. However, the professional title combined with reserved activities is harmful and we recommend that the provisions should be revised as a whole with a view to reduce or lift reserved activities.

3

Decree-Law 452/99 (last modification by Law 139/2015) "Bylaws of the Professional Association of the Certified Accountants"

Art. 10 (1)(a)(b)(c )

Reserved activities

It reserves the following accounting activities for certified accountants who must be registered in the professional association: to plan, organise and co-ordinate the accounting procedures of public or private entities, which have or need to have organised accounting in accordance with the official accounting standardisation system; to assume responsibility for technical regularity in accounting and tax matters of the entities referred to above; to sign, together with the legal representatives of the entities referred to above, the respective financial declarations and tax returns, proving quality, under the terms and conditions defined by the professional association, without prejudice to the competence and responsibilities of commercial and tax law.

Registered certified accountants are considered to be the only professionals with the necessary qualifications to perform such acts, taking into account the important role these professionals have in the tax system and management of SMEs.

The reserved activities of certified accountants exclude other professionals from the market of accounting activities and from the practice of those acts. These can be professionals with expertise in the same field but without registration or the title of member of the Professional Association of Certified Accountants. The performance of simpler tasks could be opened to other professionals. A narrower set of reserved activities of certified accountants would allow customers to choose between certified accountants and others professionals for accounting services that could be provided by any professional. The competition between professionals can lead to a decrease in prices for at least the simpler accounting services. In the United Kingdom there are no reserved activities established by law. In Portugal accountancy is a highly competitive sector, even if the title is protected. In nine EU Member States (Cyprus, Denmark, Estonia, Finland, Lithuania, Latvia, Slovenia, Spain and Sweden) the profession is not even regulated as such. In general, reserved activities or tasks for specific categories of professionals should be abolished in cases where: (i) the protection is disproportional to the policy objective because the tasks may already be performed by other well-qualified professionals or are not a danger to public safety; (ii) there is strong and well-regulated protection of the professional title which guarantees the quality of the professionals that are allowed to work; or (iii) the restriction is no longer required owing to legal, societal or professional developments that make the restriction obsolete by object.

The simpler activities given to certified accountants (e. g. to sign financial declarations and tax returns) should be open to other qualified professionals.

4

Decree-Law 452/99 (last modification by Law 139/2015) "Bylaws of the Professional Association of the Certified Accountants"

Art. 115 (2)

Multidisciplinary activities of professional firms

The sole corporate objective of the professional firm of certified accountants is the delivery of the activities reserved for certified accountants.

This provision prohibits the establishment of multidisciplinary professional firms. It allows the professional association to impose restrictions on the way professional firms are organised. These restrictions are to be grounded in the public interest, or in the powers of public authority that a particular profession may exercise. They may also be grounded in other imperatives such as the professionals' independence and client privilege.

To restrict multidisciplinary activity in a professional firm is to restrict the association of different professionals, belonging to different professional associations (some may not even belong to a public professional association), who would exercise their professional activities within the same firm and in the pursuit of the firm’s corporate or social objective(s). In a professional firm, this restriction takes the form of a restriction on partnership – restricting, or banning altogether, non-professional partners. To rule out multidisciplinary activity in the same professional firm, between potentially complementary service providers, harms competition and can be detrimental to consumer welfare. In fact, this restriction does not allow for the full exploration of economies of scope that come with the offer of different services by a same “service delivery unit” that shares infrastructure and human capital . It foregoes specialisation gains and service quality gains resulting from the interaction between a wider range of professionals. This also means foregoing the exploitation of economies of scale and the advantages in branding. It also does not allow for the mitigation of the double marginalisation (or double mark-up) problem that come with multidisciplinary activities which can complement each other, by segmenting the services provided. This means foregoing lower average costs in a multi-product firm, therefore leading to higher fees being charged to clients, while preventing clients from further benefits that could be gained from a more convenient "one-stop shop" for a wider range of professional services. Ruling out multidisciplinary activities within a profession can reduce the scope for better risk management between different professional activities within the same professional firm, as they may be subject to non-identical demand volatility or uncertainty – i. e. , reduction in the scope for internal risk-spreading to be understood as the ability to transfer resources in response to fluctuations in demand. To offer a wider range of professional services means to be better prepared to face market uncertainties. Furthermore, opening up a professional firm to multidisciplinary activities is likely to ease the introduction of innovative products but also to spur innovation in the delivery of already existing products or range of products.

We recommend that the prohibition of multidisciplinary practice in professional firms should be removed, particularly where the “professional partnership model” is the only model allowed for the practice of the profession in a collective way. The creation of such "alternative business structures" (ABS) will lead to more innovation, a broader range of services and easier access to services for businesses and consumers.

5

Decree-Law 452/99 (last modification by Law 139/2015) "Bylaws of the Professional Association of the Certified Accountants"

Art. 116 (2); Art. 117(1); and Art. 117(2)

Partnership/ownership of professional firms

At least 51% of the social capital and voting rights of these professional firms must be owned by certified accountants. All partners of a firm of certified accountants who exercise the profession of certified accountant must be active members of their professional association. Professional firms of certified accountants can hold social capital in another professional firm of the same kind.

Such restriction aims to guarantee professional independence, autonomy, adherence to professional ethical rules and the pursuit of the public interest.

Ownership, shareholding and partnership rules in certified accountants professional firms are less stringent than in other professions, e. g. legal professions, since only the majority of their sharing capital and voting rights must be owned by professional partners (and not the totally). Non-professional partners may own the remaining capital and voting rights. This option follows what is stated in Framework Law 2/2013. To open up a professional firm to external ownership means to open the firm to more investment, by allowing access to a wider pool of capital. External ownership, partial or total, means capital ownership by non-professionals, ownership of voting rights, or both. This opening will enable professional firms to satisfy a greater pool of consumers and reap the benefits of a larger scale of operations. For younger professionals, not yet well established in their profession, it would also mean more opportunities to set up their own professional firm and compete in the market. This will generate a greater ability by professional firms to compete in the Single Market and internationally. It would also allow for an improved risk management among the owners of a professional firm, hence, lower operational costs and possibly lower prices charged to consumers for the different professional services being delivered in the market. Ultimately, all these restrictions on ownership, shareholding and partnership over professional firms, are detrimental to firms across all economy, especially SMEs, and to households, as their relaxation can be expected to lead to an increase in their welfare.

We recommend that the ownership and partnership of all professional firms be opened to other professionals and non-professionals, that is, should be open to individuals outside the profession. We also recommend that other professionals and non-professionals be allowed to hold a majority of a professional firm’s social capital, together with a majority of voting rights.

6

Decree-Law 452/99 (last modification by Law 139/2015) "Bylaws of the Professional Association of the Certified Accountants"

Art. 116 (2)

Management of professional firms

In the case of professional firms of certified accountants the majority of members in the management of professional firms must be professionals.

Such a restriction aims to guarantee professional independence, autonomy, adherence to professional ethical rules and the pursuit of the public interest.

In the case of professional firms of certified accountants the majority of members in the management of professional firms must be professionals. A reason invoked to impose such a restriction is that only when the management is controlled by professional partners will there be assurance that the sole or main corporate objective of the professional firm will be pursued and that the autonomy of the professionals is maintained. However, Framework Law 2/2013 is less stringent, as it only requires that one of the managers or administrators of a professional firm must be a member of the professional association (or, in case registration in the professional association is not mandatory, that person has to fulfil all membership requirements). Historically, corporations separated their ownership from management starting in the early 20th century. One of the main reasons was to professionalise management in increasingly competitive markets. Conflicts between owners (the principals) and managers (the agents) has been the subject of extensive literature, and various payment schemes have been adopted to align managers’ interests as close as possible to the owners’ interests (see e. g. , Carlton and Perloff, 2004). Hence, notwithstanding the fact that we deal with professional firms, there is no reason for all managers to be owners or partners – as Law 2/2013 makes clear. A professional management, which ultimately answers to the owners of the professional firm, may be an option preferable to the professional partners themselves.

We recommend that the separation between ownership and management should be allowed in all professional firms and that their management may include non-professionals, that is, should be open to individuals outside the professions.

7

Decree-Law 452/99 (last modification by Law 139/2015) "Bylaws of the Professional Association of the Certified Accountants"

Art. 17

Academic qualification

This provision sets the specific academic qualifications in order for candidates to register in the Professional Association of Certified Accountants: only those holding a university degree, masters or doctorate, in the area of accounting, management, economics, business sciences or taxation.

To ensure an adequate quality of service, self-regulated professions are subject to regulations of entry and exercise in the market. Entry rules typically include academic qualification requirements.

An exhaustive list of specific routes of academic qualifications represent a barrier to competition especially when combined with reserved activities and mandatory registration, limiting this way the number of professionals that can perform specific acts, restricting the market only to those professionals and excluding other well-qualified professionals who might still have adequate professional experience to perform those tasks. A different academic background might also bring innovation to the services traditionally provided by these professionals. This type of restriction limits access of professionals to the market of accounting activities, reducing the number of available certified accountants and of professionals allowed to practice the reserved activities of certified accountants. Excessive entry restrictions tend to lead to higher prices charged to clients without necessarily increasing the quality of services. Entry barriers allow prices to stay above competitive levels.

We recommend that the professional association should work with the legislator to set up a transparent, proportional and non-discriminatory process for identification of alternative academic routes to obtain the qualifications necessary to the exercise of a profession. We recommend that professions should be opened to candidates with other backgrounds than the current compulsory university degree. Candidates may be required to hold a post-graduate degree or take a conversion course, and should undergo the same training as other trainees, including passing a final exam. This will open access to more individuals with different backgrounds, allowing for more diversity in the offer of services, and more innovation.

8

Decree-Law 452/99 (last modification by Law 139/2015) "Bylaws of the Professional Association of the Certified Accountants"

Art. 31

Professional internship

To exercise the profession certified accountants have to complete a practical internship of up to 18 months with a minimum of 800 hours. They must take a final exam, organised and evaluated by their peers.

The internship aims to be a professional initiation, implying not only the integration of the knowledge acquired in school education and the experience of its practical application, but also the perception of the ethical, legal, economic, environmental, human resources, and of management in general that characterise the exercise of the profession, so as to enable the profession to perform competently and responsibly.

The horizontal framework law for professional associations (Framework Law 2/2013) introduces limits on the organisation and duration of professional internships. Internships should not last for more than 18 months , including the period for training and evaluation, if applicable. In this case, it is proportional. This evaluation made by peers may give rise to a conflict of interest that may not ensure the required independence of the evaluators and result in a lower number of candidates joining the professions, and in turn, have a negative impact on competition in the delivery of financial services in the market.

We recommend that the final evaluation of the internship should be conducted by a board, independent from the professional association, which may include members of the latter, but must also include professionals of recognised merit, such us professors and magistrates, among others.

9

Decree-Law 452/99 (last modification by Law 139/2015) "Bylaws of the Professional Association of the Certified Accountants"

Art. 32

Professional specialisation

The professional association has a range of specialty colleges. To be considered a specialist the professional accountant must have 10 years of professional experience and demonstrate relevant knowledge and experience in the specialised area. Access to the title of specialist is subject to the acceptance of an application submitted to the professional association and the completion of examinations.

The Professional Association is the best-placed entity to recognise and control who is qualified to be a specialist; considering the high level of technical knowledge to support such a decision, this title is only relevant for curriculum purposes.

The title of specialist does not imply any reservation of activities, although it may negatively influence their presentation in the market and their image to consumers. This provision might artificially reduce the number of suppliers in the market when specialisation is required. The requirement of years of experience may not be sufficient as a proxy for professional knowledge. An exception should be made available to professionals who do not have the 10 years of experience, but have a strong professional background in that specific specialty. In this way, well-qualified professionals who have the knowledge to be granted the title of specialist, but do not meet the requirement of years of experience, are not excluded.

We recommend establishing an exceptional procedure for those professionals with less than 10 years of experience in the domain. The inclusion on the jury board elements that are not members of the OTOC with a capacity to evaluate the knowledge of the candidates should also be considered, as long as this does not create an extra burden in terms of costs and timing for the attribution of the title.

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Announcement 6106/2010 (last modification by Announcement 11692/2011)"Regulation on the registration, internship and examination of individuals in the Professional Association of Certified Accountants"

Art. 3; and Art. 4

Registration and licensing/Quality standards

It sets requirements for registration in the Professional Association of Certified Accountants, such as moral suitability.

The exercise of this profession creates a significant risk for clients and professionals. Quality standards are meant to ensure that only morally suitable professionals access the profession. This requirement aims to decrease the risks of non-compliance with the rules to ensure the proper functioning of the tax system.

The use of generic and vague concepts, such as moral suitability, grants a discretionary power to the professional association. It can be misused and lead to a decrease in the number of professionals able to operate in the market.

We recommend that the term "moral suitability" must be clarified.

11

Announcement 6106/2010 (last modification by Announcement 11692/2011)"Regulation on the registration, internship and examination of individuals in the Professional Association of Certified Accountants"

Art. 14

Professional internship

The internship supervisor must be a certified accountant with 5 years of experience and without any prior sanction. There is a limit of 2 interns per supervisor.

The internship supervisor must be someone with adequate experience in accounting activities. The limitation on the number of interns aims to ensure that the supervisor is available to provide quality training which is suitable to the objectives of the internship.

This requirement restricts access to the market as it limits the number of available supervisors and constitutes a bottleneck at the entry stage into the market. By possibly discouraging entry it will lead to a price increase in the market for accounting services and reduce consumer choice. This requirement takes away from supervisors their freedom to take in more trainees whenever they consider appropriate.

We recommend to amend the provision, since the decision on the number of trainees should rest with the supervisor, who is already required to be an experienced certified accountant and to behave in a professionally ethical manner.

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Announcement 54/2003 (last modification by Announcement 9772/2010)"Regulation on fees and charges charged by the Professional Association of Certified Accountants"

Art. 12

Professional internship / Administrative costs

This regulation establishes the administrative fees charged by the professional association, e. g. EUR 400 for the internship fee.

The administrative fees charged to the candidates usually have the purpose of financing the administrative costs of the registration procedures, the training (including the payment to the trainers), etc. It does not include the mandatory professional insurance, which is paid by the professional association and financed by the annual membership fees, according to the stakeholders.

The mandatory payment of fees, e. g. for internship, can restrict access to the profession by potential entrants. These provisions do not demonstrate the methodology or the criteria used to adopt such fees, and there is no other entity supervising the setting of prices. The fees must be proportional and adequate to pay for the services in question, and may not be charged to finance other types of services.

We recommend that the fees required for internships be calculated using transparent, non-discriminatory and cost-based criteria.

Financial and economic professions: Custom brokers

No

No and title of Regulation

Article

Thematic Category

Brief description of the potential obstacle

Policy objective

Harm to competition

Recommendations

1

Decree-Law 173/98 (last modification by Law 112/2015) "Bylaws of the Professional Association of Customs Brokers"

Art. 3

Self-regulating regime

This provision describes the attributions and competences given to the public professional association, allowing it to have control over access and exercise of the self-regulated profession, including on i) the elaboration and implementation of technical rules, ii) definition of ethical principles, iii) criteria for internships, iv) definition of academic qualifications, v) recognition of professional qualifications obtained outside the national territory, vi) attribution of the exclusive right to grant professional titles, vii) determination of reserved activities and viii) exercise of disciplinary powers.

It is our understanding that this provision aims to ensure the exercise of the regulatory function, including the disciplinary function, as well as the representative function, taking into account the interests of users of the professional services, by one and the same single entity, the professional association. In the Portuguese Constitution the autonomy and administrative decentralisation to the professional associations is recognised to ensure the defence of the public interest and the fundamental rights of citizens, and also to guarantee the self-regulation of the professions that require technical independence. This regulatory model is based on the public interest of these professions, through the designation of state powers to those entities and with two main characteristics: the exclusivity on granting the professional title and the obligation of being registered within the professional association to practice the profession, which qualifies the nature of the regulation as being mandatory and unitary.

The harm to competition arising from the regulatory model established by Law 2/2013 stems from the centralisation in a single entity of the powers to regulate and represent the profession. Because each professional association, apart from representing the profession, controls access to it and its exercise, the regulations issued may create disproportional and anti-competitive restrictions. The freedom to choose and exercise a profession is a fundamental right of the citizen. Also, freedom of movement of workers and free establishment to provide services are fundamental principles of the EU internal market. Restrictions of these principles, in the pursuit of the public interest, must be well justified and proportional. When a professional association acquires full responsibility to regulate access to the profession and its exercise as well as the conduct of its members, this may have an anti-competitive impact. In fact, professional associations may adopt rules that reduce incentives or opportunities for stronger competition between operators, such as restrictions on i) the elaboration and implementation of technical rules, ii) definition of ethical principles, iii) criteria for internships, iv) definition of academic qualifications, v) recognition of professional qualifications obtained outside the national territory (even if bounded by the criteria set by Directive 2005/36/EC amended by Directive 2013/55/EC, transposed by Law 9/2009 and Law 26/2017), vi) attribution of the exclusive right to grant professional titles, vii) determination of reserved activities and viii) exercise of disciplinary powers. As the governing bodies of public professional associations are exclusively composed of their members, there is a risk that their members' interests will not coincide with the public interest. This is one significant reason for including within at least some governing bodies of a professional association, lay people representing the interests of relevant social groups, such as consumer associations, other professionals, and high-profile people with experience in regulatory issues.

We recommend that the regulatory function should be separated from the representative function for self-regulated professional associations, either through the creation of an over-arching supervisory body by sector or trade, or through the creation of a supervisory body inside the current professional orders with the necessary "Chinese walls". The supervisory body takes on the main regulation of the profession such as access to the profession and similar functions. The board of the regulatory body will include not only representative of the profession but also lay people, including high-profile experienced individuals from other regulators, representatives of consumer organisations and academia.

2

Decree-Law 173/98 (last modification by Law 112/2015) "Bylaws of the Professional Association of Customs Brokers"

Art. 60 (1)

Mandatory registration in the professional association / Protected professional title / Reserved activities

Customs brokers have to be registered with the Professional Association of Customs Brokers to obtain the professional title and exercise the profession.

Registration is a mechanism to organise the professionals with capacity to exercise the activity and also to validate those professionals before consumers. The objective criteria are to regulate access to and the exercise of the profession. Registration may be justified on grounds of legal certainty, so consumers are informed that the professionals are certified to provide those services. The professional association acts as endowed with public powers transferred by the state to this function. The professional association's exclusive power to attribute the professional title was adopted in Framework Law 2/2013, which established a self-regulatory model for several professions. Registration and the use of the title enables consumers to be assured that the professionals are certified to provide those services.

Mandatory registration in a professional association in order to exercise the profession implies an administrative procedure/burden that results in entry costs (e. g. , time frame of the procedure itself, registration fees, and monthly fees, amongst others). Using mandatory registration as a mechanism to access the profession can be restrictive. The possibility of extending the obligation of registration to non-nationals providing services on national territory and all who practice acts of the profession on a permanent basis can be exempted if they are already registered in a mandatory regime of public registration. Hence, the registration, if needed, is not necessarily harmful in itself, except when it is combined with the establishment of reserved work. The exercise of the reserved work of customs brokers also follows the protection of the title. Protected title with reserved work may exclude other professionals from the exercise of the activity, reducing the number of suppliers in the market and increasing costs to consumers. In general, reserved activities or tasks should be abolished in cases where: (i) the protection is disproportionate to the policy objective because the tasks may already be performed by other well-qualified professionals or are not a danger to public safety; (ii) there is strong and well-regulated protection of the professional title which guarantees the quality of the professionals that are allowed to work; or (iii) the restriction is no longer required owing to legal, societal or professional developments that make the restriction obsolete by its objective.

There is no recommendation regarding the mandatory registration in the professional association. However, the professional title combined with reserved activities is harmful and we recommend that the provisions should be revised as a whole with a view to lift reserved activities.

3

Decree-Law 173/98 (last modification by Law 112/2015) "Bylaws of the Professional Association of Customs Brokers"

Art. 60 (2)(a)

Academic qualifications

Access to the profession of customs broker depends on the candidate holding a university degree: in economics, management or business administration, law, international relations, international trade or logistics and customs.

The academic fields are the ones considered by the professional association as adequate for providing the necessary knowledge to exercise the profession. This is a recent requirement adopted as a response to the challenges brought about by international trade, according to the recital of Bill 291/XII (approved as Law 112/2015). This current list of six admissible university degrees extends the previous list of only three. For those experienced professionals not meeting even the requirements established by the previous Chamber Bylaws, a transitional regime was applied.

The need for candidates to hold a degree in specific academic fields, considered by the professional association as adequate for providing the necessary knowledge to exercise the profession, establishes a requirement that restricts access to the professional title for those who do not have the required academic background. Although a university degree is not something negative to hold, to make such an academic qualification compulsory excludes other well-qualified professionals who may have the appropriate experience and professional skills to perform the activities in question. Before the introduction of the bylaws in 2015, there was no requirement for a university degree to become a customs broker, and secondary school level (12 years of schooling) was deemed sufficient as an academic qualification. We also consider that the use of the protected title is not indispensable to practice the activity of a customs representative.

We recommend revoking the recently introduced requirement of having a university degree for customs brokers to allow for easier access to the profession to those who may meet all other criteria including moral and financial criteria.

4

Decree-Law 173/98 (last modification by Law 112/2015) "Bylaws of the Professional Association of Customs Brokers"

Art. 60(2)(b); Art. 61(1)(2); Art. 62

Professional internship

Access to the profession of customs brokers depends on the attendance of an internship, with a duration of six months, with a theoretical and a practical components. Candidates are subject to a final exam. The jury is composed of the president of the professional association and includes other members of recognised merit who can be external to the professional association. This same committee is responsible to elaborate the final exams and to grade them (see Regulation 666/2016).

The internship aims to be a professional initiation, implying not only the integration of the knowledge acquired in school education and the experience of its practical application, but also the perception of the ethical, legal, economic, environmental, human resources, and of management in general that characterise the exercise of the profession, so as to enable the profession to perform competently and responsibly.

The existence of an internship is a barrier to competition, and depending on its duration, subject matter, evaluation model and associated costs, may result disproportionate and unnecessary to fulfil the policy objective. The horizontal framework law for professional associations (Law 2/2013) introduces limits on the organisation and duration of professional internships. Internships should not last for more than 18 months , including the period for training and evaluation, if applicable. In this case, the duration is proportional. The final evaluation of the internship is already conducted by a board composed of independent members from the professional association, which may include members of the latter, but must include also professionals of recognised merit.

We recommend that the subjects that are part of the academic qualification of the internship should not be repeated in the theoretical training offered during the internship; also, we recommend that the theoretical training also be conducted via e-learning.

5

Decree-Law 173/98 (last modification by Law 112/2015) "Bylaws of the Professional Association of Customs Brokers"

Art. 63 (a); Art. 66; and Art. 94 (2)

Reserved activities

Art. 66 defines the acts of customs brokers, which are: (1) (a) the representation of economic operators towards the tax and customs authority and other public or private entities with direct or indirect intervention in the fulfilment of the customs formalities underlying the goods and their means of transport; (b) the practice of acts and other formalities provided for in customs legislation, including the submission of declarations for the allocation of customs-approved treatment or use, declarations with customs implications for goods and their means of transport, and declarations relating to goods subject to excise duty; (2) (a) the drawing up, on behalf and at the request of economic operators, of applications, petitions and exhibitions aimed at obtaining simplified economic or other arrangements provided for in customs legislation; (b) presentation, to the tax and customs authority of the guarantees of the customs or fiscal debt generated by the declarations that they submit. Arts. 63 a) and 94 para. 2 refer to such acts as being reserved for customs brokers.

If the customer chooses to appoint a representative to perform customs activities, they do not necessarily have to choose a customs broker, enrolled in the Professional Association of Customs Brokers; in fact, there are other professionals acting as customs representatives, simply registered as such with the tax authority. These provisions intend to ensure that such professionals are qualified to perform these activities, which might involve great financial risk to their clients. According to the Union Customs Code, it is not mandatory for a customer to appoint a customs representative, and one may choose to carry out the act personally, without the use of a representative.

The activities described in Art. 66 are considered by Arts. 63 para. a) and 94 para. 2 as tasks reserved for customs brokers. Reserved activities ban other professionals from the practice of those acts. They also ban from the market other well-qualified professionals who do not hold the professional title. In a context where access to information and administrative fiscal requirements are increasingly simpler and made over the Internet, the role of the custom broker can be performed by other professionals with a broader professional activity and probably lower costs. Furthermore, these provisions are not in accordance with the Union Customs Code, Art. 18. This article establishes that customers may execute customs acts by themselves, or may indicate a customs representative if they prefer. This customs representative may or may not be a customs broker. In general, reserved activities or tasks for specific categories of professionals should be abolished in cases where: (i) the protection is disproportional to the policy objective because the tasks may already be performed by other well-qualified professionals or are not a danger to public safety; (ii) there is strong and well-regulated protection of the professional title which guarantees the quality of the professionals that are allowed to work; or (iii) the restriction is no longer required owing to legal, societal or professional developments that make the restriction obsolete by object. In this case The competent authorities should open the simpler activities given to certified accountants (e. g. to sign financial declarations and tax returns) to other qualified professionals.

We recommend abolishing the acts reserved for customs brokers.

6

Decree-Law 173/98 (last modification by Law 112/2015) "Bylaws of the Professional Association of Customs Brokers"

Art. 67 (1); and Art. 67 (5)

Minimum financial requirements

Customs brokers, in order to practise the profession, shall fulfil the following minimum financial requirements: i) provide a security deposit to cover any outstanding obligations incurred in their activities, in the form of either a bank deposit, a bank guarantee or insurance of, at least, EUR 49 879. 79; 24 and ii) possess insurance against professional civil liability, in order to cover the risks arising from their activities, and insured capital of at least EUR 50 000. 00.

This payment aims to address the financial risk of the activity. According to the stakeholders, this is an extremely high cost to the professionals.

The provisions impose two separate types of financial requirements on brokers (to be held simultaneously): (i) a security aimed at covering liabilities incurred; and (ii) an insurance against civil liability. However, those requirements could be duplicative, as they seem to address similar risks. Additionally, the minimum values applied to each requirement may not be appropriate to the levels of risks incurred by each customs broker. In the event that the minimum values are found to be excessively high for some brokers, changes to these values would eliminate a substantial barrier to entry and restriction on the ability of small brokers to compete. As a result, the provisions may cause customs brokers to incur unnecessary costs. In fact, the provisions prevent customs brokers from matching their level of civil liability to the scale and risks of their activities, and the provisions require brokers to possess two forms of potentially overlapping financial assurance.

The bylaws should be amended to combine the financial security and professional civil liability requirement into a single financial requirement. This would allow brokers to cover their risks with a single financial instrument, such as insurance. Furthermore, the minimum values for the financial requirements should be analysed to determine whether they are higher than necessary, given the level of risk incurred by customs brokers. If so, the required amount should be lowered from the seemingly arbitrary amount of EUR 49 879. 79 at present, to a more suitable value.

7

Decree-Law 173/98 (last modification by Law 112/2015) "Bylaws of the Professional Association of Customs Brokers"

Art. 95 (3)

Partnership / Ownership of professional firms

The majority of capital with voting rights in a professional firm of customs brokers must be owned by these professionals.

Such restriction aims to guarantee professional independence, autonomy, adherence to professional ethical rules and the pursuit of the public interest.

Ownership, shareholding and partnership rules in financial professional firms (for economists, auditors, certified accountants and customs brokers), are less stringent than in other professions, e. g. legal professions, since only the majority of their sharing capital and voting rights must be owned by professional partners (and not the total). Non-professional partners may own the remaining capital and voting rights. This option follows what is stated in Framework Law 2/2013. To open up a professional firm to external ownership means to open the firm to more investment, by allowing access to a wider pool of capital. External ownership, partial or total, means capital ownership by non-professionals, ownership of voting rights, or both. This opening will enable professional firms to satisfy a greater pool of consumers and reap the benefits of a larger scale of operations. For younger professionals, not yet well established in their profession, it would also mean more opportunities to set up their own professional firm and compete in the market. This will generate a greater ability by professional firms to compete in the Single Market and internationally. It would also allow for an improved risk management among the owners of a professional firm, hence, lower operational costs and possibly lower prices charged to consumers for the different professional services being delivered in the market. Ultimately, all these restrictions on ownership, shareholding and partnership over professional firms, are detrimental to firms across all economy, especially SMEs, and to households, as their relaxation can be expected to lead to an increase in their welfare.

We recommend that the ownership and partnership of all professional firms be opened to other professionals and non-professionals, that is, should be open to individuals outside the profession. We also recommend that other professionals and non-professionals be allowed to hold a majority of a professional firm’s social capital, together with a majority of voting rights.

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Decree-Law 173/98 (last modification by Law 112/2015) "Bylaws of the Professional Association of Customs Brokers"

Art. 97

Management of professional firms

At least one member of the management or administrative entity of the professional firm must be a customs broker with an active membership in the professional association.

Such restriction aims to guarantee professional independence, autonomy, adherence to professional ethical rules and the pursuit of the public interest.

In the case of professional firms of customs brokers, only one member of the management must be a professional with an active membership in the professional association. A reason invoked to impose such a restriction is that only when the management is controlled by professional partners will there be assurance that the sole or main corporate object of the professional firm will be pursued and that the autonomy of the professionals is maintained. However, Framework Law 2/2013 is less stringent, as it only requires that one of the managers or administrators of a professional firm be a member of the professional association (or, in case registration in the professional association is not mandatory, he or she has to fulfil all membership requirements). Historically, corporations separated their ownership from management starting in the early 20th century. One of the main reasons was to professionalise management in increasingly competitive markets. Conflicts between owners (the principals) and managers (the agents) has been the subject of extensive literature, and various payment schemes have been adopted to align managers’ interests as closely as possible to the owners’ interests (see e. g. , Carlton and Perloff, 2004). Hence, notwithstanding the fact that we deal with professional firms, there is no reason for all managers to be owners or partners – as Law 2/2013 makes clear. A professional management, which ultimately answers to the owners of the professional firm, may be an option that is preferable to the professional partners themselves.

We recommend that the separation between ownership and management should be allowed in all professional firms and that their management may include non-professionals, that is, should be open to individuals outside the professions.

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Decree-Law 173/98 (last modification by Law 112/2015) "Bylaws of the Professional Association of Customs Brokers"

Art. 94(1)

Multidisciplinary activities of professional firms

This provision allows multidisciplinary professional firms provided that the main corporate objective is the exercise of an activity that falls under the same professional association. This professional firm can engage in a secondary corporate objective, with regard to activities performed by other professionals in the same professional firm, who may even be organised in other professional public associations, provided the applicable incompatibilities and impediments regimes are upheld.

This provision aims to guarantee compliance with the ethical principles of each self-regulated profession, as well as, if applicable, the guarding of professional secrecy relating to professional-client privilege, as well as preventing conflicts of interest between different professionals.

Our interpretation of the bylaws is that this provision does not by itself prohibit professional firms from performing multidisciplinary activities, since these firms do not have to have an exclusive social corporate objective and may engage in other activities. However, incompatibilities and impediments regimes may limit the range of professional activities within a same professional firm. Note that there is no unique and exhaustive list of incompatibilities and impediments for each profession, being spread out over several legislative acts. To restrict multidisciplinary activity in a professional firm is to restrict the association of different professionals, belonging to different professional associations (some may not even belong to a public professional association), who would exercise their professional activities within the same firm and in the pursuit of the firm’s corporate or social objective(s). To rule out multidisciplinary activity in the same professional firm between potentially complementary service providers, harms competition and can be detrimental to consumer welfare. In fact, this restriction does not allow for the full exploration of economies of scope that come with the offer of different services by a same “service delivery unit” that shares infrastructure and human capital . It foregoes specialisation gains and service quality gains resulting from the interaction between a wider range of professionals. This also means foregoing the exploitation of economies of scale and the advantages in branding. It also does not allow for the mitigation of the double marginalisation (or double mark-up) problem that come with multidisciplinary activities which can complement each other, by segmenting the services provided. This means foregoing lower average costs in a multi-product firm, therefore leading to higher fees being charged to clients, while preventing clients from further benefits that could be gained from a more convenient "one-stop shop" for a wider range of professional services. Ruling out multidisciplinary within a professional can reduce the scope for a better risk management between different professional activities within the same professional firm, as they may be subject to non-identical demand volatility or uncertainty - i. e. , reduction in the scope for internal risk spreading to be understood as the ability to transfer resources in response to fluctuations in demand. To offer a wider range of professional services means to be better prepared to face market uncertainties. Furthermore, opening up a professional firm to multidisciplinary activities is likely to ease the introduction of innovative products but also to spur innovation in the delivery of already existing products or range of products.

No recommendation on the legal principle foreseen in this specific provision. However, we recommend that the legislator conducts a technical study to assess the proportionality of incompatibilities and impediments to pursue the exercise of a self-regulated profession that may be preventing the offer of multidisciplinary activities within the same professional firm, taking into consideration the policy objective. In case they are considered not to be proportional, they should be abolished.

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Announcement 10774/2016"Rules, conditions, principles and procedures applicable in the scope of the internship to be undertaken by individuals who want to register in the Professional Association of Customs Brokers"

Para. 1

Academic qualification

Access to the profession of customs broker depends on the candidate holding a university degree: in economics, management or business administration, law, international relations, international trade or logistics and customs.

The academic fields are the ones considered by the professional association as adequate for providing the necessary knowledge to exercise the profession. This is a recent requirement adopted as a response to the challenges brought about by international trade, according to the recital of Bill 291/XII (approved as Law 112/2015). This current list of six admissible university degrees extends the previous list of only three. For those experienced professionals not meeting even the requirements established by the previous Chamber Bylaws, a transitional regime was applied.

The need for candidates to hold a degree in specific academic fields, considered by the professional association as adequate for providing the necessary knowledge to exercise the profession, establishes a requirement that restricts access to the professional title for those who do not have the required academic background. Although a university degree is not something negative to hold, to compulsorily require such an academic qualification excludes other well-qualified professionals who may have the appropriate experience and professional skills to perform the activities in question. Before the introduction of the bylaws in 2015, there was no requirement for a university degree to become a customs broker, and secondary school level (12 years of schooling) was deemed sufficient as an academic qualification. We consider also that the use of the protected title is not indispensable to practice the activity of a customs representative.

We recommend revoking the recently introduced requirement of having a university degree for customs brokers to allow for easier access to the profession to those who may meet all other criteria including moral and financial criteria.

11

Announcement 10774/2016"Rules, conditions, principles and procedures applicable in the scope of the internship to be undertaken by individuals who want to register in the Professional Association of Customs Brokers"

Para. 2; Para. 5; Para. 6

Professional internship

Access to the profession of customs broker depends on the completion of an internship, with a duration of six months, with a theoretical and a practical components. Candidates may or may not be accepted to enrol in the internship. The decision to be accepted to enrol in the internship is taken by a committee headed by the president of the professional association and includes other members of recognised merit who can be external to the professional association. This same committee is responsible for setting and grading the final exams. The internship fee amounts to EUR 3200.

The internship aims to be a professional initiation, implying not only the integration of the knowledge acquired in school education and the experience of its practical application, but also the perception of the ethical, legal, economic, environmental,