On February 27 2012 Parliament approved a further amendment to the Penal Code. Although not yet in force, the scope of its repercussions on Portugal's criminal justice system have made it an important issue.
Once the amendment comes into effect, it will be unlawful to acquire or hold, either directly or through another individual or company, assets that are incompatible with the subject's legitimate income and assets (based on information submitted to the tax authorities), if the origin of such wealth is undetermined. The offence will be punishable by up to three years' imprisonment.
No crime is committed if the sum in question is less that 100 times the minimum national salary (approximately €50,000). However, if the sum exceeds 350 times this amount, the penalty will be imprisonment for between one to five years.
The text of the new amendment refers to 'wealth', which is deemed to cover all assets in Portugal or abroad, including:
- real estate;
- company shares;
- rights in ships, cars and aircraft;
- equities;
- bank account funds and credit rights; and
- any expenses incurred in the purchase of goods or services or relating to donations or gratuities(1) in Portugal or abroad.
Both individuals and companies may be held liable for this criminal offence, as well as public officials and holders of political office, who may receive prison sentences of between one and five years (or up to eight years for aggravated offences).
The amendment may provide a crucial mechanism for preventing corruption. In forcing individuals and companies to provide a full picture of their accounts to the tax authorities, it would surely prove a powerful tool for tax collection. However, the legal status of the amendment has been questioned. Before the amendment is promulgated, the president has referred its provisions to the Constitutional Court, asking it to consider whether the measure is constitutional "so that the criminalisation of illegitimate wealth is undertaken without any doubts regarding possible risks of violation of the people's fundamental rights". The court has announced that the issue has been given priority; it is expected to be decided in April 2012.
The crux of the issue involves the scope of Portugal's criminal law, in which the principle of favouring the accused in case of doubt is the rule. This new crime is based not on fact, but on the mere possibility of an occurrence in the past. The duty to declare and prove the origin of one's wealth has not been created or brought within the framework of the criminal law, when it should, in fact, have preceded the creation of the crime of illegitimate wealth.
For further information on this topic please contact Paulo de Sá e Cunha or Marta Saramago De Almeida at Cuatrecasas Gonçalves Pereira SLP by telephone (+351 21 355 3800), fax (+351 21 355 3800) or email ([email protected] or [email protected]).
Endnotes
(1) The term in the text of the amendment - liberalidades - refers to something given without compensation.