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.

What is the Golden Visa?

The Golden Visa is a residence permit granted to non-EU citizens who make a real estate investment in Spain. This permit offers the opportunity to live and work in the country, providing a fast and efficient way to obtain legal residency.

Benefits

• It is the fastest method for obtaining residency.
• It greatly facilitates real estate investment and the ability to start businesses in Spain.
• With the Golden Visa, you can travel within the Schengen Area as easily as European Union citizens.
• The direct relatives of the Golden Visa holder can also obtain residency quickly.
  Requirements for obtaining it
  The conditions for obtaining the Golden Visa vary depending on the type of investment made by the applicant.
  For real estate investments, it is granted to those who purchase property worth 500,000 or more euros.

For capital investments, a minimum of one million euros must be invested in investment funds, venture capital funds, bank deposits, or shares in a Spanish company. The Golden Visa will also be granted to those who undertake business projects that generate employment, have a significant socio-economic impact, or involve scientific advances.
Lastly, those who invest more than two million euros in Spanish government bonds will also be eligible to apply for the Golden Visa.

The acquisition process

The process for obtaining the Golden Visa is simple and easy to follow. and can be completed by following these steps:

1. All necessary documents, such as proof of investment, passport, and criminal record certificate, must be gathered.
2. The application must be submitted to the apporpiate spanish agency.
3. The Spanish authorities will review the provided documentation and, if the requirements are met, grant the Golden Visa.

When will the Golden Visa be eliminated?

The Spanish government believes that foreign investment hinders residents’ access to housing. Therefore, in order to “guarantee the right to decent and affordable housing,” it plans to eliminate the Golden Visa. However, there is currently no set date for this proposal. For this reason, we suggest that those interested in acquiring residency proceed with the application process as soon as possible.

On 12 August, Regulation (EU) 2024/2019 of the European Parliament and of the Council of 11 April 2024 (the “Regulation”) was published in the Official Journal of the European Union, introducing several substantive and/or procedural amendments to Protocol no. 3 on the Statute of the Court of Justice of the European Union (the “Statute” and “Court of Justice”).

Below is a summary of the amendments introduced by the Regulation.

1. Granting of preliminary ruling jurisdiction in specific matters to the General Court

The Regulation introduces Article 50-ter conferring jurisdiction on the General Court of the European Union (the “General Court”) to hear and make references for a preliminary ruling under Article 267 of the TFEU falling within one or more of the following matters:

1. the common system of value added tax;
2. excise duties;
3. the Customs Code;
4. the tariff classification of goods in the Combined Nomenclature;
5. compensation and assistance to passengers in the event of denied boarding or delay or cancellation of transport services; and
6. the greenhouse gas emission allowance trading scheme.

Regarding points (a) to (d), Recital 9 of the Regulation clarifies that “Those area cover, at the time of the adoption of this Regulation, matters such as the determination of the tax base for the assessment of value added tax or the conditions for exemption from payment of that tax; the interpretation of the general arrangements for excise duty and of the framework relating to duties on alcohol, alcoholic beverages, tobacco, energy products and electricity; the elements on the basis of which import or export duties are applied in the context of trade in goods, such as the Common Customs Tariff, the origin and customs value of goods; import and export procedures, including the incurrence, determination and extinction of a customs debt; specific customs arrangements; the system of relief from customs duties as well as the interpretation of specific tariff headings and the criteria for the classification of certain goods in the Combined Nomenclature laid down in Annex I to Council Regulation (EEC) No. 2658/87”.

With reference to point (e), recital 10 of the Regulation clarifies that these matters “cover matters that are at the time of the adoption of this Regulation regulated by Regulations (EC) No. 261/2004 [air transport], (EU) No. 1177/2010 [maritime transport], (EU) No. 181/2011 [bus and coach transport] and (EU) 2021/782 [rail transport] of the European Parliament and of the Council”.

With reference to point (f), recital 10 of the Regulation clarifies that this scheme “at the time of the adoption of this Regulation is regulated by Directive 2003/87/EC of the European Parliament and of the Council and by the acts adopted on the basis of that Directive”.

Notwithstanding the foregoing, pursuant to paragraph 2 of the new Article 50-ter, the Court of Justice will retain jurisdiction to hear and make references for preliminary rulings raising “independent questions concerning the interpretation of primary law, public international law, general principles of law or the Charter of Fundamental Rights of the European Union”.

Furthermore, under paragraph 3 of the new provision, references for preliminary rulings under Article 267 must be made to the Court of Justice. The Court – “as soon as possible” and in accordance with the procedures laid down in its Rules of Procedure – will then determine whether the request falls exclusively within the matters under the General Court’s jurisdiction and, if so, will transfer the case to the General Court.

• Participation in the proceedings by the European Parliament, the Council and the European Central Bank

The Regulation amends Article 23 of the Statute to stipulate that, where a matter is referred for a preliminary ruling, the decision of the national court or tribunal to stay the proceedings must be notified by the Registry of the Court. This notification must be made not only to the parties involved, the Member States, the Commission and the Union institution or body or entity that adopted the act whose validity or interpretation is being challenged, as already provided for in Article 23 – but also to the European Parliament, the Council and the European Central Bank.

Under the newly added paragraph 2, if the European Parliament, the Council and the European Central Bank consider that they have “a particular interest in the questions raised by the reference for a preliminary ruling”, they may submit statements of case or written observations within two months of receiving the notification.

Under the new paragraph 3, pleadings or written observations submitted by an interested party will be published on the website of the Court of Justice “within a reasonable time” after the case is closed, unless that interested party objects to the publication of its pleadings or written observations.

• Election of Advocates General to handle references for preliminary rulings assigned to the General Court

The Regulation introduce Article 49-bis of the Statute, establishing that, in the handling of references for a preliminary ruling, the General Court shall be assisted by one or more Advocates General, elected for a term of 3 years – with the possibility of one renewal - from among the Judges of the General Court.

• Establishment of the Intermediate Chamber of the General Court

The Regulation amends Article 50 of the Statute to introduce, with reference to the composition of the General Court, an intermediate chamber positioned between the chambers composed of five judges and the Grand Chamber.

According to the wording of the new Article 50, the General Court may convene in: (a) chambers of three or five judges; (b) an intermediate chamber; and (c) the grand chamber. In addition, consistent with the existing provisions, the General Court may in some cases make decisions by a single judge.

The new provision provides that, in proceedings relating to a matter referred for a preliminary ruling, the General Court will convene in an intermediate chamber at the request of a Member State or an institution of the Union involved in the case.

• Referral of cases to the Court of Justice or the General Court for preliminary rulings

The Regulation amend Article 50 of the Statute to establish, in line with the provisions regarding the handling of cases:

• if the General Court determines that it lacks jurisdiction to hear a reference for a preliminary ruling, it shall refer the case to the Court of Justice;
• if the Court of Justice finds that it lacks jurisdiction to hear a reference for a preliminary ruling, it must refer the case back to the General Court, which cannot refuse jurisdiction in such instances.

In connection with the above-mentioned referral mechanism, recital 18 of the Rules of Procedure further clarifies that “the General Court may, pursuant to Article 256(3), second subparagraph, TFEU, refer to the Court of Justice a case that falls within its jurisdiction but requires a decision of principle likely to affect the unity or consistency of Union law”.

• Expansion of the procedure for the prior admission of appeals

The Regulation revises Article 58a to broaden the scope of the procedure for prior admission of appeals by the Court of Justice. This expansion includes:

• appeals against a decision of the General Court regarding the decision of an independent Board of Appeals of a body or entity of the Union which, as of 1 May 2019, had such a Board of Appeals but was not expressly covered by the previous version of Article 58a.

These Union bodies/entities include: (a) the European Union Agency for the Cooperation of Energy Regulators; (b) the Single Resolution Board; (c) the European Banking Authority; (d) the European Securities and Markets Authority; (e) the European Insurance and Occupational Pensions Authority; and (f) the European Union Railway Agency; and

• litigation concerning the enforcement of contracts containing an arbitration clause.

• Introduction of the consultation procedure for applications or proposals to amend the Statutes

The Regulation introduces Article 62-quinquies which mandates that before submitting an application or a proposal to amend the Statute, the Court of Justice or, where appropriate, the Commission must first conduct “extensive consultations”.

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The Regulation will enter into force on 1 September 2024 and includes a transitional arrangement as follows:

- any references for preliminary rulings pending before the Court of Justice on 1 October 2024 will in any event continue to be handled by the Court of Justice itself;

- appeals concerning:

(i) decisions of the General Court relating to a decision of a Board of Appeals of one of the bodies/entities of the Union listed in points (a) to (e) of paragraph 6 above; and

(ii) decisions concerning the enforcement of a contract containing an arbitration clause

that are before the Court of Justice on 1 September 2024 shall not be subject to the aforementioned procedure of prior admission of appeals.

EXECUTIVE SUMMARY

The Artificial Intelligence Act (Regulation (EU) 2024/1689 or the “AI Act”) integrates into the European legislative framework with the aim of establishing a harmonized set of rules for the use of artificial intelligence within the European Union. Proposed in 2021 by the European Commission and adopted on May 21, 2024, by the Council of the European Union, the AI Act is a fundamental part of the EU’s digital strategy, aiming to promote innovation and ensure safe and responsible use of AI technologies. It provides, indeed, the EU with the most advanced regulation on Artificial Intelligence (“AI”) among all the major geopolitical players in the world, aiming at ensuring the generalized application to all AI systems throughout the main industries and the development of safe and trustworthy AI systems.

While some countries have set forth rules to deal with specific issues where AI is involved, the AI Act takes an innovative - and more wholesome - approach. It provides a specific definition of AI, which delimits its scope of application. Then, it classifies specific developments of AI systems into four levels of risk (i.e. the risk-based approach), each one imposing specific duty to developers. AI systems classified in the unacceptable risk category (such as governmental social scoring) are prohibited. High risk systems must be closely monitored by the European institutions and must be subject to risk assessment and risk mitigation practices. Limited risk systems must undergo public disclosure of relevant information to enhance their transparency. Lastly, minimal risk AIs (the category that counts most types of AI) remain free to use. The international nature of the AI Act and its all-embracing regulatory ambition aim at influencing positively other international players such as the United States and China.

The AI Act, being fully and directly applicable in all the MSs, interacts with other regulations and provisions such as the General Data Protection Regulation (“GDPR”), the Cybersecurity Act, and the Digital Services Act, creating a coherent and comprehensive regulatory environment covering various aspects of digital technologies and data protection. In addition, few States already have some kind of legislations that directly involve AI, Greece being the most remarkable example. Others have a mix of different legal sources that directly or indirectly influence the development of AI, setting forth provisions that might impact the AI future development. Moreover, some States have already taken action to complement the AI Act’s provisions, introducing a stricter regime for some specific technologies while others like France and Spain, are still considering the need of introduce complementary legislation to avoid risks related to errors in AI-generated decisions, or cybersecurity issues.

While individual countries within the European Union were not directly providing funding specifically earmarked for compliance with the AI Act itself, as it primarily focuses on regulatory frameworks rather than direct funding initiatives, countries like Switzerland, Sweden, France, Germany and Hungary and the EU as a whole have been actively investing in AI-related research, development, and innovation through various programs and funding mechanisms. These initiatives are generally aimed at supporting the broader digital transformation goals of the EU, which includes enhancing AI capabilities and competitiveness.

But what is the future of the concrete application of the AI Act? To answer this question mark, it is needed to dig into the preliminary characteristics of individual States as well as their potential intervention in terms of finance by asking: (i) Do States already regulate AI at national level? (ii) Do they plan to complement, or even enhance, the AI Act’s provisions? (iii) Do they want overall to financially support the development of AI systems?

The following analysis provides a critical overview of the most relevant countries in Europe, namely Albania, Belgium, Bulgaria, Cyprus, France, Germany, Greece, Hungary, Italy, North Macedonia, Portugal, Romania, Serbia, Sweden, Switzerland and Spain.

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Albania

Albania is gradually integrating AI into its digital programs to enhance efficiency and innovation in the public sector. Law 87/2923 ratifies the agreement for the adhesion to the “Digital Europe” program, which focuses on advanced digital skills in general, though specific details on AI are not set forth. Law 43/2023 regulates electronic public services that do not require the physical presence of the applicant, while the Decision of the Council of Ministers No. 370/2022 approves the Intersectoral Strategy “Digital Agenda for Albania”, which promotes AI to improve public services, AI integration in the public sector, and data management. It also established a High-Performance Computing Center. Unfortunately, official information on governmental funding of AI is not yet available.

Belgium

In Belgium there isn’t a specific regulation on AI. However, Collective Bargaining Agreement No. 39 is applicable to these systems. The bargaining requires businesses with more than 50 employees to preemptively inform and consult trade unions, if they invest in technologies that impact on 10% of the personnel, or more. Additionally, the collective labor agreement enacted by the Royal Decree of 21 February 2024 in the banking sector makes it mandatory to train workers in the use of AI. Additionally, acts and resolutions adopted by the Belgian legislative branches regulate the use of AI in sectors such as defense, public administration and automotive (especially relevant is the permission to run tests on automated vehicles). Government funding is split into regional and state levels. The Flemish region allocated 32 million euro for AI Research and Development. It also set forth fiscal incentives for supporting the cost of labor. On the other side, the Walloon region launched the “Application and Research for Trusted Artificial Intelligence” project for the development of AI systems that enhance the competitiveness of Walloon’s businesses and awarded it 32.3 million euro. Brussels also offers many grants and subsidies to businesses in the AI industry. These three regional levels all complement the Federal programs, which mostly invest in defense.

Bulgaria

The Bulgarian Government adopted the “Concept for the Development of Artificial Intelligence in Bulgaria until 2030”, which recommends conducting a detailed analysis for a legislative proposal to be carried out only after the entry into force of the AI Act. No proposals will be forwarded until then. In the meantime, Bulgaria plans to use the European Structural Funds, the “Horizon 2020” programs, the National Recovery and Sustainability Plan, and the state budget to fund projects in the AI sector. Moreover, Bulgaria established the “Institute for Computer, Science, Artificial Intelligence and Technology” (“INSAIT”) and invested 85 million euro in it through the Ministry of Education and Science. The INSAIT is set to be the most advanced research institution in Eastern Europe, as it can rely on world-class partnerships with the most important players in the field, such as Switzerland’s “ETH” in Zurich and “EPFL” in Lausanne (two prestigious technical universities), as well as donations by Google, Amazon Web Services, DeepMind, SiteGround, VMware and other tech entrepreneurs.

Cyprus

Cyprus declared that the AI Act will be the first legislation that directly regulates AI. It presented a Strategic Plan for 2024-2026 which has allocated 282 million euro until 2026 for digitalization in general, including AI. However, much information on the development of AI in the country is lacking.

France

France’s own regulation of AI systems mostly revolves around the GDPR, and the “Loi Informatique et Libertés” of 6 January 1978, which apply to the processing of personal data. However, France is one of those countries that also legislate on more specific applications of AI systems, namely automated decisions. Individuals subject to those decisions have a right to obtain a human review of their personal situation, to express their point of view, to obtain a precise motivation in support for the decision, but also to challenge it (in line with Article 22 of the GDPR). On 12 September 2023, French representatives of the Assemblée Nationale proposed a legislation to regulate copyright-related issues, but the proposal was deemed unfeasible, and it was blocked. In 2021, President Emmanuel Macron launched its France 2030 plan, investing 2,5 billion euro in AI Research and Development. On 19 September 2023, the Government established the “Generative Artificial Intelligence Committee” to provide better guidance to the Cabinet for its decisions in the AI sector.

Greece

In Greece, Law 4961/2022 covers multiple technological developments, including smart contracts, the Internet of Things and AI. Only a few modifications are required for the Law to be fully compatible with the AI Act, which testifies Greece’s ability to legislate carefully in the area. In terms of Government funds, the Ministry of Digital Governance issued between 150 and 200 million euro for the development of AI.

Germany

Germany declared that the AI Act will be the first legislation that directly regulates AI. In 2018, Germany adopted a federal strategy for AI, significantly increasing the invested funds in the sector. Indeed, the Federal Ministry of Education and Research annual budget for technology investment increased by 20 per cent since 2017, reaching 1,6 million euro in the current legislature. These funds will be invested in eleven specific areas, including enhancing research to be a driver of innovation, setting up an agenda to expand the AI infrastructure, building the AI infrastructure, promoting social dialogue with stakeholders to responsibly integrate AI into Germany’s institutional systems, and ultimately drafting and enforcing a more effective, innovative and agile AI regulation, that fosters innovation.

Hungary

In Hungary, Government Decree 1573/2020 sets forth the national strategy on AI. This strategy has been developed by the Artificial Intelligence Coalition, which comprises more than 70 Hungarian and International companies, universities, and research groups. The Coalition’s main goal is to place Hungary as a leading power in AI, and to strengthen national businesses’ competitiveness with it. The strategy focuses on transformative programs in the manufacturing, healthcare, energy and logistics sectors. It aims at enhancing Hungary’s technologies and infrastructures, while also fostering the public comprehension of AI and its applications. The Hungarian government, through the venture capital program “Széchenyi” made funds available to support the development of AI. The funded projects include the “AI Innovation and Competence Centre and Data Asser Management”, which promotes the application of AI systems to Hungarian small and medium enterprises, the development of AI-based technology for various purposes and the establishment of the national “Laboratory for Artificial Intelligence”.

Italy

In Italy, the GDPR and copyright legislation are the main tools used to regulate the application of AI and its functioning. In particular, these are significantly important as far as the training process of AI models is concerned, since training sets may incorporate and process personal data or copyrighted work, triggering legal obligations, prohibitions and sanctions. Additionally, Italy plans to further regulate the topic, complementing the upcoming AI Act. Indeed, the Italian Government recently proposed to the Italian Senate the introduction of a new law (Disegno di legge 1146/2024 - “DDL”), which is currently being discussed by the relevant committees. The announced goal is to strike the right balance between the protection of human rights on the one hand, and the development of innovative and beneficial tools on the other. In other words, the DDL dictates general principles to follow, in order to prevent AIs from negatively impacting on human autonomy, excluding humans from the processes in which AI is employed, and depriving them of their individual decision power. Thus, the DDL safeguards freedom of information and communication, fairness in the use of data, and transparency in the training of models. The DDL also proposes to introduce more sector-specific provisions, authorizing, for example, the use of AI systems in public administration and in intellectual professions only in secondary activities in support of the core one. The Italian Government has allocated 1 billion euro to the acquisition of shares in Italian innovative businesses, including those that develop AI systems. It also plans to facilitate partnerships between the public and the private sector, for the development and the employment of fair and efficient AI systems in the public administration.

North Macedonia

In North Macedonia the main regulation that deals with AI is the national Data Protection Law, which is harmonized with the GDPR, while no other specific proposals targeting AI are planned. In 2023, the Government launched “ADA”, an AI-powered digital assistant, which provides information to citizens and businesses. Moreover, the Governmental “Fund for Innovation and Technology Development” has invested approximately 138 million euro since 2013, to support start-ups and innovative projects in North Macedonia.

Portugal

Portugal plans to align its legislation on AI with the AI Act. Portugal is one of the first countries to have developed a national strategy. In fact, in 2019 it adopted the “National Strategy on AI”, which fosters innovation in healthcare, agriculture and education. In line with the AI Act, the National Strategy too is based on a risk-based approach that aims at developing ethical and human-rights-oriented AI. Importantly, Portugal’s strategy includes the establishment of sandboxes, which are secure environments where AI systems can be tested, under the supervision of public authorities, before getting released to the public, mitigating risks related to privacy and security.

Romania

The Romanian Senate has started public discussions on 19 March 2024 for a new legislative proposal on AI. As of today, the proposal would prohibit the automatization of the flow of human resources, as well as the use of biometric data of natural persons (except for crime prevention and detection purposes). It is worth highlighting that the Romanian approach might conflict with the AI Act, therefore it might me heavily modified to align with it. In February 2024, the Ministry of Investments and European Projects published Order No. 464/2024 for the approval of a state aids scheme, and a scheme of contributions to support entrepreneurs in the development of advanced digital technologies. These schemes allocate 3 million euro in grants to foster the development of advanced technologies, including AI.

Serbia

As of today, Serbia set forth voluntary guidelines and recommendations in the AI sector, such as the “Strategy of Development of Artificial Intelligence in the Republic of Serbia for 2020-2025”, and the “Conclusion on Adoption of Ethical Guidelines for Development, Application and Use of Reliable and Responsible Artificial Intelligence”. Besides providing guidance for the development of safer AI models, these acts also envisage the enactment of new regulations and the amendment of existing laws to better face the risks posed by AI (such as a new Data Protection Law). Serbia is currently developing its 2024-2030 national strategy on AI, which is expected to be adopted by the end of the year. As Serbia is also preparing to become an EU Member, it is also likely that it will transpose and issue a law on AI that parallels the AI Act. The Serbian Government also financed AI-related projects with 1 billion euro per year, in the 2020-2025 period. The Fund for Science currently funds 12 projects under the “Program for Development of Projects in the AI Field”.

Sweden

The Swedish Government is currently collecting information to draft a national law on AI, that is in line with the AI Act. But Sweden’s most important tool to get ahead in the AI race comes in the form of investments in the AI field, and the focus on the training of human capital. In fact, Microsoft announced a 3 billion euro investment in AI-related projects, and the training of 250,000 people, highlighting the attractiveness of Sweden in the industry. In 2023 the Government established a commission on AI to enhance the competitiveness of businesses in the sector, which concluded that the public administration would benefit approximately of 14 billion euro per year thanks to the integration of AI in its processes. Sweden also established “AI Sweden”, a government-funded national center for the application of AI, in partnership with entities in both the public and the private sector, as well as universities.

Switzerland

As of today, Switzerland chose a sector-specific approach to AI regulation, including the federal data protection law of 2020 which disciplines automated decisions, granting enhanced transparency and other individual rights that are similar to those granted under the GDPR. However, the legislation might soon be integrated by a new tool, as the Federal Council started an analysis to develop general legislation on AI, by 2025 (which is set to consider the norms of the EU and of the European Council). The goal is to provide Switzerland with a clear and AI-compatible normative landscape. Additionally, the Swiss Federation supports digitalization and technological development projects, including AI programs, in partnership with universities and research institutions, such as the “ETH” in Zurich, or the “EPFL” in Lausanne. Also, “Digital Administration Switzerland” and “AI Switzerland” promote innovation and training in AI-related fields.

Spain

Spain’s main tool to regulate AI is the “National Strategy for Artificial Intelligence 2024”, in line with the AI Act. The Spanish strategy mainly focuses on cybersecurity, which is an essential element for the digital transformation of the economy. In fact, Spanish institutions are currently discussing a Cybersecurity Law, which is set to enter into force in late 2024, to grant a better protection of digital systems. Additionally, Spain established the “Spanish Agency for Artificial Intelligence Supervision” (“AESIA”), with the purpose of granting ethical and transparent practices in the use of AI. The National Strategy allocates 1,5 billion euro – from the National Recovery and Sustainability Plan – and 600 million euro from the State budget, which have already been mobilized. The plan includes investments in supercomputing, the development of language models in Spanish and other co-official languages, the promotion of talents in the AI field, and the expansion of AI in the public and private sectors, with special attention for small and medium enterprises.

United Kingdom

The United Kingdom heavily relies on the GDPR to regulate AI (which also influences automated decisions). The “Artificial Intelligence Regulation Bill” was a tentative to provide the country with horizontal regulation on AI, although its progress was stopped due to the UK’s early elections. However, the Government has already launched several initiatives in support for AI. The “AI Sector Deal” of 2018 invested 1 billion pounds for Research and Development, training and ethical research on AI. Additionally, the “AI and Data Grand Challenge” provides businesses with 2,6 billion pounds from the public sector, and 3 billion from the private one. The “United Kingdom Research and Innovation” program further invested 300 million pounds for proper computing, 250million pounds for the development of AI in healthcare and zero-emission economy, and 100 million pounds in academic centers for technological talents.