On 11 September 2024, the European Commission published the State of the Energy Union report which describes how the EU has managed unprecedented challenges in the energy policy landscape during this Commission's mandate, equipping the EU with a regulatory framework for pursuing the clean energy transition and laying the foundations for renewed economic growth and competitiveness.

Key legislative updates in the EU energy sector

The European Union has recently taken significant steps in its energy legislation to support its climate neutrality objectives for 2050 and emission reduction targets for 2030. The following legislative measures have been introduced or entered into force:

Renewable Energy Directive (RED): Enhancements to the RED focus on increasing the share of renewable energy sources, streamlining permitting processes, and integrating renewables into the EU energy grid Energy Efficiency Directive (EED): Stricter requirements for energy consumption reduction across member states, promoting sustainable practices and efficient use of energy. Energy Performance of Buildings Directive (EPBD): Mandates to improve energy efficiency in the building sector, with targets for new constructions and renovations. Hydrogen and Decarbonised Gas Markets Package: Comprehensive regulations to facilitate the adoption of hydrogen and other low-carbon gases. Methane Emissions Regulation: A groundbreaking regulation to monitor and reduce methane emissions in the energy sector. Electricity Market Design Reform (in detail on pages 6-7): Aims to create a more resilient and consumer friendly energy market while ensuring security of supply.

Extension of the Emissions Trading System (ETS): Inclusion of new sectors and tightened caps to strengthen the EU’s carbon pricing mechanism.

Achievements in 2024:

Record Renewable Installations: In 2023, the EU installed 56 GW of new solar capacity, with renewables accounting for 50% of electricity generation in the first half of 2024. Reduced Dependency on Russian Energy: Imports of Russian gas have fallen from 45% of total EU imports in 2021 to 18% by mid-2024. Similar reductions have been achieved for coal and oil imports. Progress in Energy Security: Gas storage reached a record 90% capacity by mid-August 2024, ensuring resilience for winter energy demands.

Key Achievements Under the Fit-for-55 and REPowerEU Plans:

Energy Efficiency Gains: Primary energy consumption has declined, moving closer to the 2030 targets. Decarbonisation Milestones: The EU’s greenhouse gas emissions are 32.5% lower than 1990 levels, and the Emissions Trading System (ETS) has expanded to include maritime transport. Renewable Energy Expansion: Wind and solar energy installations have surged, with wind surpassing gas generation as the second largest electricity source after nuclear. Diversification of Energy Imports: Norway and the U.S. have become the EU’s largest suppliers of pipeline and LNG gas, respectively, replacing Russian imports. Support for Clean Energy Technologies: Initiatives like the European Solar PV Industry Alliance and the European Industrial Alliance on Small Modular Reactors (SMRs) have been launched to strengthen the clean energy sector.

Economic and Employment Benefits

Job Creation: REPowerEU targets are projected to create over 3.5 million jobs by 2030, emphasizing the economic opportunities in the energy transition. Competitiveness: The Net-Zero Industry Act and Critical Raw Materials Act aim to ensure resilient supply chains and support for European manufacturers in the global clean energy market.

Challenges and Future Steps

Addressing Ambition Gaps: More robust measures are required to meet the 2030 renewable energy and efficiency targets. Energy Poverty: Tackling high energy costs remains a priority, with targeted interventions to shield vulnerable populations. Grid Modernization: The Grids Action Plan addresses challenges in expanding and digitalizing electricity infrastructure across the EU.

EU Initiatives to Watch

European Hydrogen Bank: Supporting hydrogen investments and market development with new auctions and funding mechanisms. Aggregate EU Platform: A permanent tool for joint purchasing of natural gas and strategic commodities, enhancing energy security. European Net-Zero Academies: Providing workforce training in renewable energy, hydrogen, and other key sectors. Expansion of LNG Infrastructure: New terminals and expansion projects have increased the EU’s LNG import capacity, improving energy security. European Renewable Energy Auctions Platform: A new platform to consolidate information on planned renewable energy auctions across the EU, streamlining investments in the sector.

17 January was the deadline for EU member states to transpose the new electricity market design rules into national law. These rules have been created to tackle rising energy prices. They aim to make energy prices more stable and predictable for consumers and less dependent on the price of fossil fuels.

Member States were required to take national measures to:

Energy costs which are more reflective of (cheaper) renewable energy and also more predictable. Wider choice of consumer contracts and clearer information before signing contracts. Option to lock in secure, long-term prices.  Dynamic pricing contracts, if needed, to take advantage of price variability to use electricity when it is cheaper. Protection from being without electricity through the establishment of suppliers of last resort.  Protection from disconnection for those who are vulnerable or energy poor. More opportunities for energy sharing, for example, tenants will be able to share surplus rooftop solar power with a neighbour.

According to EUR-Lex, the vast majority of EU member states have failed to transpose the New Market Design Directive into national law.

On 23 January during the World economic forum in Davos a new Global Energy transition Forum was launched by European Commission President Ursula von der Leyen along with international partners with the objective of reaching for ambitious climate targets at world level and supporting countries for whom the clean transition is more challenging.

The forum aims to: Maintain momentum on global energy agreements and integrate these targets into new Nationally Determined Contributions (NDCs) ahead of the COP. Transform these targets into concrete projects that benefit people, such as bringing power to underserved communities and scaling up clean energy globally. Unlock more investment through smart finance, de-risking tools, blended finance, and other creative solutions to attract private capital. President von der Leyen highlighted the unprecedented levels of world spending on clean energy. “Last year alone, global spending on clean energy hit a record USD 2 trillion. For every dollar invested in fossil fuels, you had two dollars invested in renewable energy. In the power sector, clean energy investments outnumber fossil fuels ten to one. This is a shift we have been working towards for years,” she remarked. Challenges: Despite progress, regions like Africa still struggle to benefit from the clean energy transition, receiving only 2% of clean energy investment despite having 60% of the world’s best solar resources. Scaling Up Manufacturing: The forum also focuses on scaling up manufacturing to improve grids and storage capacity, requiring massive investment that no single company or country can undertake alone. The President concluded saying: “I want to be very clear with my message: Europe stays the course and we stand ready to work with all global actors to accelerate the transition to clean energy.”

The European Commission has published a new study that provides an in-depth look at the state of net-zero technology manufacturing across the EU. The study highlights advancements in key sectors such as wind, solar, batteries, carbon capture, and heat pumps. It aims to fill data gaps and offer a reliable assessment of the manufacturing capacities for these technologies in all 27 EU countries.

Key findings include:

1. Manufacturing Capacity: A detailed mapping of the current manufacturing capabilities for net-zero technologies in each EU country. 2. Policies and Incentives: Analysis of the national policies and incentives that support the growth of manufacturing capacities. This includes regulatory frameworks, investment incentives, and skills development programs. 3. Challenges and Opportunities: Identification of bottlenecks in the manufacturing process and potential opportunities to increase production capacity. The study also highlights best practices in policy frameworks and notes that nearly three-quarters of EU countries have introduced incentive programs to boost investments in net-zero technology manufacturing. At the EU level, the Net-Zero Industry Act aims to enhance manufacturing capacity by addressing barriers to scaling up production in Europe. The report and its summary can be found here: The net-zero manufacturing industry landscape across the Member States European Commission.

The European Commission recognizes the importance of involving young people in policymaking processes and ensuring they are well-informed and actively participating in the energy transition.

Youth Involvement: The European Commission aims to enhance youth participation in energy policy discussions, recognizing that 67% of young people see EU actions impacting their daily lives. Employment and Skills: The renewable energy sector is growing, with significant job opportunities expected. By 2030, 3.5 million new jobs will be needed, particularly in wind and photovoltaic sectors. Education and Awareness: The Commission is stepping up its efforts to provide information and tools for young people to get involved in the energy sector and to remove barriers such as lack of information and relevant curricula. Young Energy Ambassadors: Launched in 2023, this program selects 30 young people annually to promote engagement and awareness about EU energy policies. Educational Initiatives: The ‘Back to School’ initiative and e-learning content on the EU Academy website aim to educate students about energy, climate, and environment issues.

The Commission, the EU Agency for the Cooperation of Energy Regulators (ACER) and the Renewables Grid Initiative (RGI) have launched a survey on enhancing regulatory environments for stakeholder engagement in electricity infrastructure projects in the EU, under the EU’s Pact for Engagement.  The survey will be open for 4 weeks, i.e. until 23 February 2025.

Purpose: To understand practices, opportunities, challenges, and enabling conditions related to regulatory and legal frameworks of stakeholder engagement. Target Audience: Grid operators across Europe (TSOs and DSOs) and National Regulatory Authorities (NRAs). Outcome: Results will contribute to enhanced regulatory environments and will be presented at the 11th Energy Infrastructure Forum in June 2025 and at the Pact for Engagement Stakeholder Meetings. Survey link: EUSurvey – Survey.

European Commission Recommendation EU 2025/63 urges Member States to monitor outbound Investments in Critical Technology Sectors, essential for the EU ‘economic security.

On January 15, 2025, the European Commission adopted Recommendation (EU) 2025/63, a fundamental document aimed at strengthening the economic security of the European Union through careful monitoring and thorough evaluation of outbound investments in critical technology sectors. This initiative is part of the European strategy for economic security, which aims to protect the EU from threats arising from economic flows and activities that could compromise its security (“Recommendation (EU) 2025/63”).

The Recommendation (EU) 2025/63 arises from the growing awareness of the risks associated with the leakage of advanced technologies to third countries. Such technologies could be used for military or intelligence purposes, undermining international peace and security. The Commission established a group of experts to assess these risks and identified ten critical technology sectors, including advanced semiconductors, artificial intelligence, and quantum technologies.

Recommendation (EU) 2025/63 fits into a broader context of European Union policies aimed at protecting foreign investments. The EU has developed a comprehensive strategy to ensure that investments, both inbound and outbound, do not compromise the Union's economic and technological security. This strategy includes:

Foreign Subsidies Regulation (FSR): Entered into force on July 12, 2023, the FSR allows the Commission to address distortions caused by foreign subsidies, ensuring a level playing field for all companies operating in the single market. The FSR aims to prevent foreign subsidies from distorting market conditions, preventing subsidized companies from acquiring businesses or obtaining public contracts in the EU. Regulation (EU) 2019/452: This regulation establishes a framework for the control of foreign direct investments (FDI) in the Union, with the aim of protecting security and public order. The regulation allows Member States and the Commission to examine foreign investments that could affect the security or public order of the EU. European Strategy for Economic Security: This strategy, adopted by the Commission and the High Representative, aims to implement a comprehensive strategic approach to economic security, addressing challenges arising from geopolitical tensions and deeper global economic integration.

According to the Raccomendation (EU) 2025/63, Member States are invited to review outbound investments related to:

Semiconductors: This sector includes technologies for the design, manufacture, and assembly of integrated circuits and other semiconductors. The recommendation specifies various areas, such as the design of integrated circuits, software for electronic design automation, the initial and final manufacture of semiconductors, and the materials used in their production. Artificial Intelligence (AI): The recommendation focuses on generative AI systems, especially those trained on biological/genomic data or used in biotechnological, space, or defense contexts. These systems are designed to operate with varying levels of autonomy and can influence physical or virtual environments through predictions, content, recommendations, or decisions. Quantum Technologies: This sector includes quantum computing, quantum communications, and quantum sensing. These technologies have the potential to revolutionize various fields, from cryptography to the simulation of complex chemical processes.

Specifically, the Recommendation (EU) 2025/63 requires Member States to review outbound investments made by natural or legal persons resident or established in the Union ("EU Investors") to conduct economic activities in a third country related to one of the technology sectors defined above, such as (i) acquisition and or merger process, (ii) transfer of tangible (or intangible) assets (including specific intellectual property or know-how necessary for the start or continuation of an economic activity and constituting an identifiable part of a company's business operations, excluding the transfer of individual products or dual-use software subject to Regulation (EU) 2021/821 of the European Parliament); (iii) the establishment of a new business, subsidiary, or branch and joint venture.

The review should exclude minority investments whose objective is limited to seeking a return on invested capital. The review should also cover indirect investments by an EU investor, such as those made through a third-country entity used as an investment vehicle, through an existing subsidiary, or in the context of an existing joint venture with a third-country company or located there. This includes the gradual transfer of assets over time but occurring during the review period, and investments aimed at violating or circumventing existing security controls on trade and investments (and targeted individual measures), including Union restrictive measures under Article 215 of the Treaty on the Functioning of the European Union.

The review should cover new and ongoing operations and those concluded from January 1, 2021, but may also cover activities prior to that date where Member States identify operations of particular concern. Member States must assess whether such operations create or exacerbate risks to economic security by collecting detailed information on the participants in the operation, the type of investment, the approximate value, the products and technologies involved, and other relevant aspects.

Recommendation (EU) 2025/63 represents a significant step towards protecting the economic security of the European Union. Through careful monitoring and rigorous evaluation of outbound investments, the EU aims to prevent the leakage of critical technologies and maintain its position as a global technological leader. This integrated and collaborative approach between Member States and the European Commission, along with national tools such as the Golden Power, will help strengthen the Union's resilience in the face of future geopolitical and economic challenges.

Raccomandazione sul riesame degli investimenti in uscita in settori tecnologici critici per la sicurezza economica dell'UnioneDownload

Energy and Petroleum

The Presidency of the Republic modified the name of the Ministry of the Popular Power for Petroleum, which is now called Ministry of the Popular Power for Hydrocarbons. (Official Gazette of 12/17/2024. Decree No. 5.061. Entry into force: Upon publication in the Official Gazette).

Tax

The National Integrated Service of Customs and Tax Administration (Servicio Nacional Integrado de Administración Aduanera y Tributaria - SENIAT) established the rate applicable to the calculation of late payment interest accrued during August, September, and October 2024. It was established that the weighted average interest rates for loans of the six (6) principal commercial and universal banks of the country with the highest volume of deposits, excluding portfolios with prime rates, set by the Venezuelan Central Bank (VCB) for August, September, and October 2024 are: 59.26%, 59.23% and 59.30%, respectively, which rates are to be increased 1.2 times for the calculation of late payment interest accrued during the aforesaid months. (Official Gazette of 12/06/2024 and 12/19/2024. Administrative Rulings Nos. SNAT/2024/000108, SNAT/2020/000109, and SNAT/2020/000123).

A Presidential Decree extended until 06/09/2025 the validity of Decree No. 4.525 (Decree of Optimization and Revitalization of Exportation Processes) published in Official Gazette of 06/09/2021. Therefore, the exemptions from the exportation legal regimes indicated in said Decree No. 4.525 continue to be in force. (Official Gazette of 12/16/2024. Decree No. 5.058. Entry into force: As from 12/09/2024). The SENIAT established the schedule of Special Taxpayers and Withholding Agents for the obligations to be performed in year 2025. (Official Gazette of 12/18/2024. Administrative Ruling No. SNAT/2024/000118. Entry into force: Upon publication in the Official Gazette). The SENIAT established the schedule of Taxpayers not Categorized as Special Taxpayers for activities of games of chance to be performed in year 2025. (Official Gazette of 12/18/2024. Administrative Ruling No. SNAT/2024/000119. Entry into force: As from the date of publication in the Official Gazette).

The SENIAT issued an Administrative Ruling that regulates the use of digital media for the issue of invoices and other fiscal documents. For purposes of said Ruling, other documents refer to debit notes, credit notes, delivery orders or waybills and withholding certificates. The taxpayers subject to the obligation to use digital media for the issue of invoices and other documents must perform said obligation as from the first day of the third calendar month after the entry into force of the aforesaid Administrative Ruling. The provisions of said Administrative Ruling will not be applicable to the invoicing by telephony services intermediaries as established in Administrative Ruling No. 0474, published in Official Gazette of 10/01/2004. Administrative Ruling No. SNAT/2014/0032, published in Official Gazette of 09/02/2014, which rules the use of different media for the issue of invoices and other documents by suppliers of mass services, was repealed. The authorizations granted under the validity of said Administrative Ruling No. SNAT/2014/0032 continue to be in effect. (Official Gazette of 12/19/2024. Administrative Ruling No. SNAT/2024/000102. Entry into force: Upon publication in the Official Gazette).

The SENIAT issued an Administrative Ruling that regulates the conditions and requirements to be met by the providers of information technology systems used for the issuance of invoices and other fiscal documents, in order to be homologated and authorized by the National Integrated Service of Customs and Tax Administration (Servicio Nacional Integrado de Administración Aduanera y Tributaria - SENIAT). (Official Gazette of 12/19/2024. Administrative Ruling No. SNAT/2024/000121. Entry into force: Upon publication in the Official Gazette).

The SENIAT established the schedule for declaration and payment of the special contribution for protection of social security pensions in the face of the imperialist blockade to be performed in year 2025. (Official Gazette of 12/19/2024. Administrative Ruling No. SNAT/2024/000120. Entry into force: As from the date of publication in the Official Gazette).

Presidential Decree No. 5.071 established as follows: (i) an exemption of ninety percent (90%) from import duties and from value added tax is established for the final importation of new or used corporeal personal property, made by entities of the National Public Administration and by natural or legal persons with their own resources, classified in the schedules of customs duties indicated in Appendix 1 to Decree No. 5071. This benefit operates by reason of law only; (ii) an exemption from import duties and value added tax is established for the final importation of corporeal personal property, made by entities of the National Public Administration and by natural or legal persons with their own resources, classified in the schedules of customs duties indicated in Appendix II to Decree No. 5.071.

This exemption is subject to the Certificate of No National Production or Insufficient National Production (Certificado de No Producción Nacional o Producción Nacional Insuficiente (CON or CPNI); (iii) an exemption from import duties and value added tax is established for the final importation of corporeal personal property, made exclusively by the Ministry of the Popular Power for Mining Ecological Development or the entities assigned to it and that made exclusively by the Corporación Venezolana de Guayana (CVG) or the companies assigned to it, classified in the schedule of customs duties indicated in Appendix III to Decree No. 5.071; (iv) an exemption from import duties and value added tax is established for the final importation of corporeal personal property, made exclusively by the Ministry of the Popular Power for Attention to Waters or the entities assigned to it, classified in the schedule of customs duties indicated in Appendix IV to Decree No. 5.071; (v) an exemption from import duties and value added tax is established for the final importation of corporeal personal property, made exclusively by the Ministry of the Popular Power for Electric Energy or the entities assigned to it, classified in the schedule of customs duties indicated in Appendix V to Decree No. 5.071; (vi) an exemption from import duties and value added tax is established for the final importation of corporeal personal property, made exclusively by Corporación Socialista del Cemento (CSC) and the companies assigned to it, classified in the schedule of customs duties indicated in the Decree; (vii) an exemption from import duties and value added tax is established for the final importation of corporeal personal property made exclusively by Corporación Venezolana de Comercio Exterior (CORPOVEX), classified in the schedule of customs duties indicated in the Decree. The exemption benefit will apply as of the date of recording of the relevant Customs Declaration for importation. The exemption benefits established in the Decree will apply from 01/01/2025 to 03/31/2025. (Official Gazette No. 6.869 Extraordinary of 12/27/2024. Decree No.5.071. Entry into force: Upon publication in the Official Gazette).

Labor

A Presidential Decree established a fire freeze in favor of the workers of the public and private sectors from 01/01/2025 up to and including 12/31/2026. As a result of the foregoing, the workers protected by the fire freeze may not be dismissed or transferred, nor may their employment conditions be worsened, without a justified cause approved by the Labor Inspector. The fire freeze will apply to the workers referred to in article 87 of the Organic Law of Labor and Workers. Workers of direction and casual or temporary workers are exempted from this Decree. (Official Gazette No. 6.868 Extraordinary of 12/27/2024. Decree No. 5.070. Entry into force: As from 01/01/2025).

TELECOMMUNICATIONS The National Telecommunications Commission determined the portions of the radio spectrum that will be submitted to the public offering procedure, in accordance with the provisions of the Organic Telecommunications Law and other applicable provisions. The National Telecommunications Commission may only assign through the public offering procedure the portions of the radio spectrum that the Administrative Ruling indicates in accordance with the attribution established in the National Chart of Frequency Band Attribution. Administrative Ruling No. 011, published in Official Gazette of 04/27/2016, was repealed. (Official Gazette of 12/03/2024. Administrative Ruling No. 113. Entry into force: Upon publication in the Official Gazette. It will have the character of annex to the National Telecommunications Plan).

Miscellaneous

The Ministry of the Popular Power for National Trade declared the following standard as Venezuelan COVENIN Standard of national character: Standard 2257-1:2024 “Installations of ionizing radiations. Part 1: Classification, delimitation, and demarcation of work environments. Requirements. (2nd. Review).” The content of said Standard will be published in the institutional site of the Deconcentrated Service of Standardization, Quality, Metrology, and Technical Regulations (Servicio Desconcentrado de Normalización, Calidad, Metrología y Reglamentos Técnicos - SENCAMER) (www.sencamer.gob.ve). (Official Gazette of 12/16/2024. Resolution No.091/2024. Entry into force: Upon publication in the Official Gazette).

Opening of the application window for the so-called Mini Development Contracts starting February 5, 2025

Support for medium-scale financial investments related to STEP critical technologies

The so-called Mini Development Contract is an incentive promoted by the Ministry of Enterprises and Made in Italy, managed by Invitalia, to support investments aimed at the development or production of critical technologies identified by the European STEP Regulation (EU Regulation 2024/795): digital and deep-tech technologies, clean and resource-efficient technologies, and biotechnologies.

Pursuant to the directorial decree issued on December 20, 2024, by the Department for Enterprise Policies (Directorate-General for Business Incentives), detailed provisions have been established to ensure the effective implementation of the measure, supporting investments ranging from €5 million to €20 million in the above-mentioned critical technology sectors.

The Mini Development Contract provides funding for projects between €5 million and €20 million, targeting enterprises of all sizes for investment initiatives to be carried out in the regions of Basilicata, Calabria, Campania, Molise, Puglia, Sardinia, and Sicily. These investments must focus on the development and/or production of critical technologies outlined in the STEP Regulation or on strengthening their value chain to enhance supply chain security, resilience, and system productivity.

A total budget of €300 million has been allocated, sourced from the 2021–2027 National Research, Innovation, and Competitiveness Program, and distributed as follows:

€100 million under Policy Objective 1 of the PN RIC 2021–2027, designated for SME investments €200 million under the STEP Policy Objective of the PN RIC 2021–2027, available for investments by SMEs and large enterprises

Eligible investments must pertain to a single production site within the following sectors:

Digital technologies and deep-tech innovation Clean and resource-efficient technologies, including net-zero emission technologies Biotechnologies, including medicines listed in the Union's critical medicines inventory

The funding is provided as non-repayable grants, subject to the maximum aid intensities specified in the Regional State Aid Guidelines. Eligible expenses will be covered at the following rates:

55% for small enterprises 45% for medium enterprises 35% for large enterprises

Applications will be ranked based on an evaluation process that considers the following criteria:

Financial independence Contribution of core business operations to revenue generation Environmental sustainability Level of innovation Employment impact

Applications may be submitted exclusively online via Invitalia’s web platform from 12:00 p.m. on February 5, 2025, until 12:00 p.m. on April 8, 2025.

Uruguay  Business opportunity

Green Hydrogen from offshore wind farms

The Uruguayan Government has just announced that it would offer maritime areas for the installation of offshore wind farms aimed at the production and export of green hydrogen and its derivatives. The State-owned oil company (so-called “ANCAP”) plans to issue an international call for interested companies. This would be the first open round in the world for the production of green hydrogen in offshore areas.

Through this process, four (4) dates will be set for companies to submit their bids for four (4) different maritime areas.

An Executive Branch decree issued a few days ago, authorized ANCAP to enter into contracts with third parties in order to conduct feasibility studies for the evaluation and potential production of green hydrogen and/or derivatives from renewable energy.

Such areas would be located approximately 42 kilometers from the coast and will have an average surface area of approximately 270 square miles, with an energy production potential of 3 GW and a green hydrogen production potential of 200,000 tons per year.

The format proposed for the above contracts would contemplate evaluation periods which would range between two (2) and ten (10) years.

This newsletter provides a selection of regulatory news and comments from our SPANISH legal experts on interesting policy developments, recent case law, and new regulatory directions of major industry practices. The aim is to provide an up-to-date tool for quick and easy consultation on the most current and important topics at a SPANISH level.

1. Legal news on foreign investments

On September 1, 2023, Royal Decree 571/2023, of July 4, concerning foreign investments (the "Royal Decree"), came into effect, repealing Royal Decree 664/1999 and further developing the provisions of Law 19/2003, of July 4, on the legal framework for capital movements and economic transactions with foreign countries (the "Law 19/2003").

The Royal Decree establishes mechanisms for controlling foreign investments. Articles 14 to 17 of the Royal Decree introduce a prior administrative authorization regime for certain foreign investments, particularly in strategic sectors of Spain. This control is grounded in Article 7 bis of Law 19/2003.

The Royal Decree also introduces new provisions regarding intragroup financing. This refers to loans or capital injections between companies within the same corporate group when one of the parties is foreign.

1.1 Requirements and obligations

The concept of investment has been expanded as follows:

Foreign investments in Spain: When a foreign company finances a Spanish entity or branch. Spanish investments abroad: When a Spanish company finances a nonresident company within the same group.

Declaration Requirements:

Amount exceeding €1,000,000. Amortization period exceeding one calendar year.

Declaration Obligation:

Intragroup financing transactions meeting the aforementioned criteria must be declared to the Investment Registry of the Ministry of Economy, Trade, and Industry.

Who is responsible for the declaration?

The non-resident company if it finances a Spanish entity. The resident company if it finances a foreign entity.

2. New technical and functional specifications for electronic billing systems

Order HAC/1177/2024, published in the Official State Gazette (BOE), sets forth the technical, functional, and content specifications that electronic and computer systems used for billing by entrepreneurs and professionals must comply with. Its primary objective is to ensure that these systems adhere to the security and transparency standards established in Royal Decree 1007/2023 and Royal Decree 1619/2012.

2.1 Main objective of the Order

The goal is to prevent electronic systems from enabling the manipulation or concealment of accounting, billing, or management data, ensuring that records are:

Intact: Without unauthorized modifications. Preserved: Accessible for consultation. Readable: In standard formats that can be interpreted by the Administration. Traceable: With the ability to track the history of each record. Unaltered: Free from interpolations or undocumented omissions.

2.2 New tax obligations and legal context

The electronic systems must guarantee these characteristics and be duly certified. Invoices generated will include a QR code and, in some cases, a phrase identifying their validity.

This order is based on the new formal tax obligation set forth in Article 29.2.j) of the General Tax Law, which requires manufacturers, marketers, and users of these systems to comply with the necessary security and functionality requirements.

In summary, this order regulates and standardizes billing systems to prevent tax fraud and improve data control by the Administration.

Corporate law

Paris Court of Economic Affairs (Tribunal des affaires économiques de Paris): entry into force of a new protocol for disputes on the merits

On 19 December 2024, the Bar, the Clerk's Office (greffe) and the Paris Commercial Court signed a new protocol relating to the introduction and scheduling of disputes on the merits, with the aim of reducing the average time taken to process these cases.

The protocol concerns the settlement of disputes on the merits (and not summary proceedings, claims and injunctions to pay) and will apply to new cases filed after its implementation, which is scheduled to take place in stages from 1 January 2025. Firstly, it aims to improve the organisation of the filing of cases by introducing a procedure for the scheduling of dates. As soon as this function is operational on the ‘digital court’, the date will be scheduled on the commercial court platform.

The case will then be placed at the clerk's office by electronic transmission (Word or PDF text format) or, if this is not possible, by filing the copy of the summons with the reservation number at the clerk's office.

The protocol also changes the way in which cases are instructed, where representation by a lawyer is mandatory, based on the provisions of articles 446-1 to 446-4 of the French Code of Civil Procedure. As soon as the case is introduced, the parties will be proposed an amicable way of resolving the dispute. In the absence of conciliation, the court will exempt the parties from attending subsequent pre-trial hearings and, after obtaining the opinion of the parties, it will set a calendar for exchanges depending on the complexity of the case. Subject to certain exceptions, the exchanges will have to take place electronically.

Corporate law

New provisions on amicable liquidation proceedings and transfer of company assets (TUP)

Amicable liquidation and universal transfer of assets (TUP) procedures are sometimes misused by fraudulent companies facing tax and social security reassessments, which they seek to elude.

To prevent such misuse, the decree of 7th July 2024 makes it compulsory to publish the dissolution giving rise to a TUP procedure in the “Bulletin officiel des annonces civiles et commerciales” (BODACC) and to produce certificates of social security and tax compliance when closing the amicable liquidation procedure.

As a result, article 8 of decree no. 78-704 is amended to make it compulsory to publish the dissolution giving rise to a TUP procedure only in the BODACC and no longer in a legal gazette, in order to enhance the publicity given to the procedure and the information provided to creditors.

The text also amends article 10 of the same decree and article R. 237-7 of the French Commercial Code (for commercial companies) to make it compulsory to produce a certificate of social regularity and a tax certificate attesting that the accounts are fully updated when the amicable liquidation is closed, as part of this procedure, which takes place without the intervention of a judge. Although the company must not have any debts and must have enough assets to pay all its liabilities, there is no obligation to certify that, a situation that the decree seeks to correct with this new obligation.

These provisions will come into force on 1st October 2024.

Corporate law

Conditions under which former members of a civil company (société civile) are held liable for the company's debts.

In a recent decision, the French Supreme Court (Cour de cassation) ruled that shareholders in a civil partnership who have transferred their shares may be held liable for the company's debts that became due and payable before the date of the transfer, without any need to justify unsuccessful legal proceedings against the company prior to that date.

Corporate law

General Meeting of a Société Anonyme: the failure to establish a quorum is not equivalent to a lack of quorum

The Extraordinary General Meeting of a Société Anonyme is deemed valid only if the shareholders present or represented hold at least one-quarter of the shares with voting rights on first call and one-fifth on second call (French Commercial Code, art. L. 225-96, para. 2). Resolutions adopted in breach of this rule are null and void (French Commercial Code, art. L. 225-96, para. 1).

The shareholders of a Société Anonyme requested the nullity of an Extraordinary General Meeting, arguing that the meeting officers had failed to ensure that a quorum was met.

Their claim has been rejected: only the adoption of resolutions by the Extraordinary General Meeting without respecting the quorum can lead to nullity; however, the plaintiffs did not argue that the quorum had not been met, but only that the officers of the meeting had failed to ascertain its presence.  

Corporate law

Alternative arbitration clause and attribution of jurisdiction: the court may be seized

In a recent decision, the Paris Court of Appeal stated that, in the event of an alternative clause providing for recourse to arbitration to settle disputes arising from the contract, while reserving the parties the option of submitting their dispute to the national court in the event of disagreement, the court may be seized to establish the existence of such disagreement.

Corporate law

Commercial agents unable to continue working for health reasons are entitled to indemnification

The In a recent decision, the French Supreme Court (Cour de cassation) ruled that in the event that a commercial agent terminates his contract for health reasons, he retains his entitlement to the contract termination indemnity, even if he is not completely unable to carry out any activity, as long as he can no longer reasonably pursue his activity as an agent.

Tax

Research tax credit (“crédit d'impôt recherche - CIR”): sub-contracted expenses can only be taken into account if they have been paid during the financial year

According to the Toulouse Administrative Court of Appeal, sub-contracted expenses can only be taken into account in calculating the research tax credit (“crédit d'impôt recherche – CIR”) in respect of a given financial year if they are actually paid in that same year.

Tax

Denial of tax exemption to non-residents is subject to the contradictory procedure

When non-resident contributors claim an exemption on the basis of a bilateral tax treaty in a letter attached to their wealth tax (“Impôt de Solidarité sur la Fortune – ISF”) declaration, the contradictory rectification procedure must be implemented (French Supreme Court 18-9-2024 no. 23-10.515 F-D).

Employment law

The duration of fixed-term contracts, even if discontinuous, is deducted from the trial period provided for in any permanent contract subsequently entered into.

In a recent decision, the French Supreme Court (Cour de cassation) has reiterated the conditions for the implementation of the trial period in the event of a succession of previous contracts, confirming its case law in this matter.

In particular, on expiry of one or more fixed-term employment contracts (CDD), the employee may be hired, without any delay, on a permanent contract (CDI) by the company in which he or she was working. In this case, the duration of the fixed-term contract(s) has to be deducted from any trial period provided for in the new employment contract (French Labor Code, art. L 1243-11, para. 3), even if the various contracts are separated by short periods of interruption. The deduction of the duration of previous fixed-term contracts from the trial period of the new contract is even more applicable in the event of new recruitment on a fixed-term contract following immediately successive fixed-term contracts. However, except in cases of fraud, the employer does not have to reduce the trial period if the new contract is for a different position requiring the employee to have different qualifications and skills.

Employment law

A recording made without the employer's awareness can be used to prove a work-related accident

The plenary session of the French Supreme Court (Cour de cassation) recently ruled that, in civil proceedings, the unlawfulness of obtaining or producing evidence does not necessarily mean that it should be excluded from the proceedings. The court must, when requested to do so, assess whether such evidence undermines the fairness of the proceedings as a whole, by balancing the right to evidence against the conflicting rights involved. The right to evidence may justify the production of evidence that undermines other rights, provided that such production is essential to the exercise of that right and that the violation is strictly proportionate to the aim pursued.

In a judgment of 6 June 2024, the Second Civil Chamber of the French Supreme Court applied this solution for the first time to disputes concerning work-related accidents. It approved the Court of Appeal's (Cour d’appel) ruling that an employee could produce an audio recording made without the knowledge of the director of the company with whom he had had an altercation, in order to obtain recognition both of the work-related nature of the accident resulting from this altercation and of the employer's inexcusable fault, after observing that the court had carefully balanced the director's right to respect for his private life and the victim's right to evidence.

Employment law

Repeated sexist comments by an employee are culpable and justify dismissal

An employee who repeatedly insults colleagues using mildly sexist language is guilty of misconduct justifying dismissal, regardless of the employer's past tolerance.

Employment law

No compensation for notice for an employee who refuses a change in working conditions

An employee who refuses a simple change in working conditions may be dismissed for misconduct. In this case, the employer may require that the notice period, if any, be performed under the new working conditions. An employee who refuses loses all entitlement to compensation for notice (French Supreme Court, Labour Division, 23-10-2024 no. 22-22.917 F-D, Association Essor c/ E).

Real estate law

Consequences of an ancient promise to sell: revocation and invalidity of the price

It is impossible for the promisor to withdraw from the unilateral undertaking to sell unless otherwise stipulated in the contract. Whether the price is too low is determined at the date of the unilateral undertaking to sell and not, as in matters of lesion, at the date of exercise of the option.

Real estate law

The seller's right to occupancy compensation is not conditional on absence of fault on his part

While the seller's bad faith does not deprive him of his right to restitution in respect of the occupation of the property sold after the invalidation of the sale, a purchaser acting in good faith only has to pay this value from the date of the claim (French Supreme Court 3rd Civil Division 5-12-2024 no. 23-16.270 FS-B).

Real estate law

Legal standing for a non-professional creditor in a compulsory sale of the principal residence of a debtor in compulsory liquidation

A creditor with a charge over real property, to whom the declaration of unseizability of a property belonging to a debtor in compulsory liquidation cannot be set up against, may proceed with its sale on seizure. The non-professional creditor's right to bring an action is recognised because it is not an action to order the debtor to pay a sum of money prohibited by article L. 622-21 of the French Commercial Code (French Supreme Court, Commercial Division, 20 November 2024, F-B, no. 23-19.924).

Consequences and Remedies for Italian and European Companies

January 13, 2025 - Prepared by Melchionna PLLC Law Firm, New York

Is there a tangible risk for Italian and European companies exporting goods and services to the U.S., starting January 20, 2025, with the inauguration of the new Trump administration? This question concerns businesses operating in various sectors, including raw materials, manufacturing, fashion, food, beverages and alcohol, mechanics and components, and chemicals, to name just a few.

The Scenario

During his election campaign, Trump stated his intention to target China and Europe and to implement measures similar to those taken during his first administration. At that time, steel and aluminum, for example, were subject to tariffs of 25% and 10%, respectively. This time, however, Trump has pledged to impose generalized protectionist tariffs ranging from 10% to 20%. It is worth noting that Europe has already been threatened with new tariffs if it refuses to import U.S. energy products (coal, oil, and gas). Trump has also declared his intention to introduce 100% tariffs against the “BRIC” bloc (Brazil, India, China, South Africa, Egypt, Ethiopia, Iran, and UAE) if they decide to adopt a currency competing with the dollar.

1. Economic Forecasts in the Event of New Tariffs for Europe

Initially, new tariffs on goods and services imported into the U.S. would make these products more expensive for American consumers (an aspect that—according to many observers—could politically harm Trump in the long term), thus driving inflation higher.

Regarding the European economy, forecasts indicate that tariffs would further burden an already stagnant economy. According to economists at Citi Bank, undifferentiated 10% tariffs could reduce the GDP of the European area by 0.3% over two years. The value of European companies could decrease by 1% or 2% per share. Both institutional and individual investors have already shown signs of disinvesting from the European area and productive sectors most likely to be affected by tariffs, leading to a further tightening of credit availability. Occasional tariff exemptions would undoubtedly have a political justification.

Germany’s Economic Institute (IW) has calculated that Trump’s new tariffs would cost Germany approximately €180 billion over four years. For the French Center for International Economic Studies (CEPII), Italy is expected to suffer a GDP contraction of 1.20%.

These are the direct impacts. Indirect effects appear even more problematic: Trump’s promise to impose tariffs of up to 60% on Chinese goods could lead Asian companies to divert products initially destined for the U.S. market to Europe, resulting in lower prices for European end consumers and reduced profit margins for many European companies (notably, Chinese electric vehicles currently face a 100% tariff in the U.S.).

The prospect of retaliation is challenging and unlikely, as 25% of goods the EU imports from the U.S. consist of oil, coal, and natural gas—products unlikely to be subjected to new tariffs. The same applies to pharmaceutical products. Europe might consider commercial retaliation against China (as it has in the past), although some goods are already subject to high tariffs (for example, Chinese electric vehicles enter Europe with a 35.3% tariff).

2. What is the Political Scenario?

In U.S. law, only tariffs exist (unlike in Italian law, where both tariffs and duties are distinguished). According to many observers, Trump’s statements on new tariffs, both during and after his campaign, aim to force foreign companies and governments to renegotiate their positions. Tariffs, as is well known, have a political basis. Trump and his team have promoted tariffs through an extensive communication campaign via traditional and digital media, as well as social media. In doing so, they have sought to convince American consumers of the significant domestic benefits that tariffs will bring. However, most experts in economics and economic history do not agree with this prediction.

While Trump currently sees tariffs as an expression of "patriotic protectionism" and, above all, as a powerful tool for geopolitical purposes, it will ultimately be end consumers who decide on the efficacy of this policy. What matters for Italian companies exporting their products to the U.S. is to pay attention to short-term policies and recalibrate their commercial operations based on a clear understanding of the available options to maintain stability and continuity.

3. What Are the Legal Grounds?

Article I, Section 8 of the U.S. Constitution grants Congress exclusive authority to legislate on tariffs. However, over time, Congress has delegated this power to the President in certain circumstances. The President could invoke Section 301 of the Trade Act (1974) (as was done for new tariffs on Chinese goods); Section 232 of the Trade Expansion Act (1962) (as was the case for steel and aluminum imports); or Section 203 of the International Emergency Economic Powers Act (IEEPA), which is even faster since it does not require an investigation by federal agencies if the President concurrently declares a national emergency under the National Emergency Act (NEA).

The regulatory framework becomes even more complex when considering the provisions related to tariffs, including exemptions and appeals, sanctions, actions by CFIUS (the U.S. committee overseeing the admissibility of foreign investments), changes to nearshoring rules, and the renegotiation of current bi- or multilateral agreements (especially those with Canada and Mexico).

4. What Are the Impacts and Solutions to Best Prepare?

A significant number of Italian and European companies operating in the U.S. will likely need to assess whether their products and services will be subject to new tariffs. If so, they must quickly decide how to respond. Since the new Trump administration will select goods and services for new tariffs arbitrarily and unpredictably, the response time of affected companies will be crucial for competitiveness and success in the U.S. market. Companies that prepare a response plan today will be able to implement it and successfully navigate the next four years.

Diversified, well-tested, and tailor-made solutions are available.

For further information, please contact Melchionna PLLC Law Firm in New York.

DECREE ON LABOR IMMOBILITY 2025–2026

Published in Official Gazette No. 6,868 (Extraordinary) on December 27, 2024, Decree No. 5,070 (the “Decree”) establishes labor immobility for workers in both the public and private sectors from January 1, 2025, to December 31, 2026. Accordingly, workers protected under this labor immobility cannot be dismissed, downgraded, or transferred without just cause, which must be previously qualified by the Labor Inspector of their jurisdiction.

Beneficiaries of the Decree:(i) Workers hired under indefinite-term contracts starting from the first month of service to their employer.(ii) Workers hired under fixed-term contracts for the duration specified in the contract.(iii) Workers hired for a specific project, as long as their obligation remains unfulfilled.

Exceptions:The Decree does not apply to management-level employees or seasonal and occasional workers. The stability of public officials is governed by the protective provisions of the Public Service Statute Act.

Non-compliance:Failure to adhere to the labor immobility provisions established in the Decree grants the worker the right to request reinstatement, payment of wages and other unpaid benefits, or the restoration of the violated legal situation. Such claims must be filed within thirty (30) consecutive days following dismissal, downgrading, or transfer. These requests will be processed with priority over any other procedure by the Labor Inspectors, in accordance with the Decree with Rank, Value, and Force of Organic Law of Labor and Workers (“LOTTT”).

Employers who obstruct or fail to comply with reinstatement orders or the restoration of the violated legal situation, or those who breach labor immobility provisions, will be subject to sanctions under the Decree and the LOTTT.

Effective Date:The Decree will come into effect on January 1, 2025.

For access to the full Decree, click here.