Author: skoumentakis

The New Law On Societes Anonymes

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At Koumentakis & Associates Law Firm we have a deep faith in the values and benefits of preventive law practicing. We are not limited to just good conventional predictions and / or developing the right strategy in our clients’ affairs. We are proceeding with the evaluation of the adverse effects of existing legislation and, consequently, with proposals for legislative interventions to prevent them.

This includes the comments of Stavros Koumentakis, Senior Partner of our firm, on the (unfortunately poor) predictions while implementing the new Law on Sociétés Anonymes regarding its provisions for contracts between their shareholders and their directors.

The risk of abuse of existing legal options by shareholders of the minority acting in bad faith is (more) visible. Our proposed legislative intervention has already been adopted by FINF (Federation of Industries of North Greece) and has been properly processed.

The public debate has opened!

THE NEW LAW ON SOCIETE ANONYMES

The Contracts Of The S.A. With Main Shareholders, Members Of The Board Of The Directors And Related Parties: The Problem With The (Potential) Dramatic Consequences

A. INTRODUCTION: THE VIEW OF THE COMPANY

1. The New Law On Societes Anonymes

With the recent law (L. 4548/2018), a commendable effort to reform the law of Societes Anonymes as well as the replacement of a hundred-year (old) statute were concluded. Changes are, in some sections, sweeping. The (careful) adaptation of the articles of association of Societes Anonymes should take place in 2019. However, the effect of the provisions of this law begins immediately: from 1.1.2019.

2. The Contracts Of The S.A. With Main Shareholders, Members Of The Board Of The Directors And Related Parties

One of the most important issues that the new law is regulating is the conclusion of these contracts.

The matter has already been dealt with by the European Union legislator in Directive 2017/828: thus, this concerns exclusively companies listed on a regulated market. The new law adopts (Articles 97, 99 et seq.) the provisions of this Directive for all companies. Is this right for non-listed?

3. The Options Of The New Law And The (Dramatic) Risks For The Shareholders Of The Majority

Based on the options of the new law it is NOT entitled to participate in the decision-making process in the Board of Directors and the General Assembly the member of the BoD or any shareholder, who derives interest (directly or indirectly) from the particular transaction. It is noteworthy that the final decision belongs to the General Assembly, which is convened on this issue at the request of 5% (only) of the share capital. Only the remaining shareholders – in practice, i.e. ONLY the (usually one) minority shareholder – can vote in this particular General Assembly.

This choice (as it appears) is intended to protect the minority shareholders and the company itself from the unfair influence of the persons entitled to make decisions on its behalf.

Unfortunately, it is expected to lead to exactly the opposite effects to those that the Legislative Committee was looking at: The privilege of 5% minority shareholders to decide unilaterally on the matters relating to the company’s relations, for example, with the shareholder of the majority is expected to lead to abusive (and / or extortionist) behaviors.

The possibility, which tacitly is given to the majority shareholder (even if it owns 95% of the share capital of the SA) to defend himself with (multiannual and costly) legal actions, does not ensure his own interests nor the company’s.

4. The Solution of the “Gordian Knot”

Therefore, there is no doubt that there is a strong need to find a different solution. For example, to return to the former (safer and fairer) “regime” (article 23a of Law 2190/1920): Shareholders who derive interest from a contract are entitled to participate in the General Assembly that will provide the final approval, but the authorization to conclude it will be provided only if it 1/3 of the share capital represented in it does not oppose.

This particular issue poses serious risks to the smooth operation of Sociétés Anonymes.

The solution should be simple and immediate!

Otherwise: The only ones to be happy shall be the malignant shareholders of the minority and their lawyers (and of course, the lawyers of the shareholders of the majority) ….

Β. THE DATA FROM A LEGAL POINT OF VIEW – THE PROPOSED SOLUTION

1. Preamble

1.1 According to the chairman of the legislative committee on the reform of the law of SA Prof. Evangelos Perakis (Evangelos Perrakis “The New Law of the Société Anonyme”, Nomiki Bibliothiki, 2018, p. 59) “two major issues of great difficulty were the subject of the new law … the question of the remuneration of the members of the board of directors … and the issue of related party transactions … of those transactions that are suspected of occurring through the unfair influence (and for the benefit of) persons controlling or managing the company …”

1.2 The Legislative Committee, which has been set up for this purpose, successfully completed the titanium project of the transition from hundred-year (old) statute (L.2190/1920) to a modern statute (Law 4548/2018) that will govern the operation of the Société Anonyme. However, in such a large project it would be impossible to avoid problems; some, indeed, serious.

2. Related Party Transactions Management – Selected Solutions

2.1 The way selected by the Legislative Committee for dealing with the above mentioned (under 1.1) significant problems and finally adopted by Law 4548/2018 is basically reflected in the provisions of Art. 97, 99 & 100 as well as to that of Art. 109.

2.2 The rule in Art. 99, par. 1, L. 4548/2018 provides for the prior authorization by the Board of Directors of the Société Anonyme for the purpose of concluding contracts with related parties (members of the BoD of the company, persons controlling the company, close members of their family, the legal entities controlled by them, General Directors and Managers of the company etc-99 par. 2)

2.3 The rule in Art. 97, par. 3, L. 4548/2018 provides that when there is a conflict of interest between the members of the Board of Directors (or the aforesaid, under 2.2, related persons) and the Société Anonyme, these members are NOT entitled to vote. As a matter of fact, if failure to vote concerns so many members so as not to have a quorum, the issue is referred to the General Assembly. However, even if the number of remaining members is adequate for the decision by the Board of Directors to be taken, a minority shareholder holding 1/20 (i.e. 5%) of the share capital may impose (in any event) the convening of a General Meeting with the subject of the provision of or not of the relevant approval (Article 100 (3)).

2.4 In the event that the person directly or indirectly involved in the conclusion of the contract happens to be a shareholder, the votes corresponding to his shares are not counted either in the quorum formation or in the majority (Article 100 (5)). Equally, however, neither the votes corresponding to the shares of the related parties are counted. Therefore: The minority shareholder of 5%, for example, (whether acting in good faith, or not), and he ALONE is the one who will take the decision concerning the shareholder of the majority – 95%, for example, after taking into consideration his personal view, and of course his personal interest, and not necessarily that of the company.

2.5 The choices of the new law (L. 4548/2018) and especially the abovementioned deprivation of the right to vote are based on the provision of Art. 9c (4) of Directive 2007/36 / EC (inserted by Directive 2017/828).

2.6 [As an aside, it is to be noted that the rule of Art. Article 99 (3) of Law 4548/2018 provides for a series of exceptions to the application of the above formal (and in our view problematic) procedure. From these exceptions, it is, in our view, to be proved more important in practice the exception provided in case (f): from the generally risky and problematic procedure are excluded the contracts of the company concluded with other directly or indirectly controlled ones, which are concluded with the objective of the interests of the company or from which the interests of the company and of the at shareholders of the minority are not jeopardized. This case is expected to be popular in practice, but it is quite vague as to its specific criteria while it concerns only part of the disputed transactions].

2.7 The above mentioned regarding the deprivation of the voting rights in the Board of Directors and the General Assembly, unfortunately also apply when remuneration is to be paid to the members of the Board of Directors in the framework of a special relationship (in the framework, for example, of the most commonly selected contracts of employment, management contracts or mandates – Article 109 (3)): In such cases, the SOLE member to decide is the shareholder of 5% and not the 95% shareholder (if the latter is also the member of the Board of Directors whom concerns the discussion of the fees to be paid).

2.8 Conclusion: In any of the above cases (: conclusion of a contract between the SA and related parties and / or members of the Board of Directors – the contracts for their remunerations included), and of course also in a number of others, is shown the absolute contradiction that the one to whom the power to take a potentially very important decision within a SA, is not the shareholder of 95% but the one of 5%.

3. The Scientific Approach

3.1 On the basis of what Prof. Evang. Perakis mentions (Evang. Perakis, “The New Law of Societe Anonyme”, Nomiki Bibliothiki, 2018, p. 63): “In any case, deprivation of the right to vote may be considered to be an excessive measure because of its possible consequences, as for example the ability of an obstructive minority of 1/20 of the share capital to seek for a General Assembly to convene in order to reject itself the transactions with shareholders – members of the management of the company with whom they have bad relations while the latter will be unable to vote. It must therefore be accepted that the refusal of the minority to grant the license to conclude the contract should also be reviewed under the provision of Article 281 of the Civil Code”.

3.2 The proposed by Professor Evang. Perakis solution (the judicial ascertainment of the abusive refusal of the shareholder holding the 5%) seems to refer the issue in the distant future and at considerable cost to the companies involved and, above all, to uncertainty as to the outcome. Business decisions, however, should not wait for long lasting legal procedures. It is widely known (to all, lawyers, entrepreneurs, “institutions”, etc.) what it means to wait for the issue of a final judgment (first instance proceedings, appeal) and / or an irrevocable decision on any matter; a fortiori, a judgement on the ascertainment (or not) of the abusive exercise of a right.

4. The Ratio of the Regulations of Directive 828/2017

4.1 The ratio of the regulations of Directive 828/2017 (beyond any doubt) is to ensure: (a) the smooth and unhindered operation of the companies whose shares are admitted to trading on a regulated market as well as the adequate management and performance of the company and (b) the encouragement of the long-term active participation of the shareholders and the improvement of the transparency between companies and investors; as it is already apparent from the recitals 2 and 3. The ultimate goal seems to be the smooth functioning of the “markets” in view of the participation of large sections of the population in Europe and of their general effect on the individual national economies. Particularly, in relation to the transactions of these companies with related parties, “adequate protection of the interests of the company and the shareholders who are not related, including minority shareholders” (recitals 42 and 43) is also sought.

4.2 These objectives and, more generally, the provisions of Directive 828/2017 refer explicitly to “listed” companies and do not extend to “non-listed” companies. This choice of the EU legislator is not accidental: If the reasons for the specific arrangements for “listed” companies were at the same or at a similar level as in the case of “unlisted”, it would be obvious that the latter would also be included (even with minor variations) in the regulatory scope of the Directive.

5. The Greek Reality

5.1 The rule of the Directive, as already mentioned, refers ONLY to the listed companies. However, it was consciously chosen by the relevant Legislative Committee to extend to the non-listed, ignoring the harsh Greek reality that has at least two strands:

(α) Until 2007, the creation of a single-member Société Anonyme was not allowed. Until then, we used to set up Sociétés Anonymes by providing a small percentage (for example 5%, and why not!) to a friend of the exclusive shareholder. Obviously, no one was aware that the percentage of 5% would be able to gain power in “life and death” …

(b) The shares of unlisted Sociétés Anonymes usually belong to a narrow circle of persons (members of the same family, close relatives or friends), whereas as a rule one person is the main shareholder and “runs” the company. Shareholders with small shares in the share capital either acquired them by transfer from the main shareholder or participated in the formation of the company (in both cases with or without payment of the corresponding “price”, having full knowledge of who is managing the company) or, finally, due to succession. Vesting them with the same heightened protection that the shareholders of the “listed” companies need due to the wide dispersion of their shares would not only be unjustified but would also turn these shareholders into potential blackmailers of the majority while it would undermine the proper operation of company and could even lead it to complete depreciation.

5.2 In view of this, the extension by Law 4548/2018 of the provisions of Article 9c (4) of the Directive (Articles 99-101 of Law 4548/2018) also to the “unlisted” companies not only is no self-evident but it is also lacking convincing justification. The legitimate weighting of the interests of the regulated entities in every legislation does not seem to justify the extension but, on the contrary, it fails to appreciate or, at the very least, does not adequately assess the reality of the “unlisted” companies mentioned above in 5.1 Thus, the reasons for the specific arrangements for “listed” companies do not apply neither in the same nor to a similar extent for “unlisted” companies”, which makes the Greek legislator’s choice for “expansion” to the latter problematic.

6. The Proposed Solution

The aforementioned leave no doubt that there is a major need to restrict the application of the provision of Art. 100 par. 5 of Law 4548/2018 to the listed companies and to amend it (before the beginning of the implementation of the new law-1.1.2019, with the additions in bold) as follows:

“Article 100 ….. Par.5.

(a) For a company with shares listed on a regulated market, in the case where the transaction concerns a shareholder of the company, that shareholder does not participate in the vote of the general assembly and is not counted for the formation of the quorum and the majority. Similarly, no other shareholders with whom the counterparty is linked by a relationship under Article 99 (2) shall participate in the vote.

(b) For a company with shares not listed on a regulated market, in the case where the transaction concerns a shareholder of the company, that shareholder participates in the vote of the general assembly and is calculated for the formation of the quorum and the majority. Similarly, other shareholders with whom the counterparty is linked by a relationship subject to paragraph 2 of Article 99 shall likewise participate in the vote. In that case, however, the provisions for the quorum and the majority of Articles 130 (3) and 132 (2) shall apply.”

7. Moral

This piece of legislation (Law 4548/2018) seems to be legally in order. It will be tested along the way. It is appreciated successfully.

The Legislative Committee seems to have done a great job. Its President continues to be, for us all, a teacher.

However, despite all these, it is a fact that the aforementioned provision of Art. 100 par. 5 seems (and is) problematic with regard to non-listed companies.

Its amendment is desirable, as above.

Stavros Koumentakis
Senior Partner

P.S. A shorter, Greek version of this article has been published in MAKEDONIA newspaper (November 18, 2018)

November 18, 2018
Companies Vs Investors / Banks: Balance Of Interests

[vc_row][vc_column][vc_column_text] The financial data of the companies, the current circumstances each time, as well as the business plans often create the need to look for funds: more often in the form of a company’s capital strengthening and / or its financing.

The Expectations of The Parties

Business interest leads to the search for “cheap” funds (in the sense of the least possible financial burden). What is important is, on the one hand for no significant commitments and collateral to be, while on the other side for the repayment period (when it comes to lending) to be long.

Investors (most commonly individuals, funds, venture capital, etc.) and, just recently banks, are always looking for

a) the maximum possible return,

b) the earliest possible return of the investment,

c) the maximum possible collateral.

Collateral

Contractual undertakings and securities (guaranties, liens on mortgage, mortgage, pledges) have lost a significant part in the value scale of investors and banks. It is no longer the basic, and certainly not the only, security they are looking for. They often require (and, as a rule, achieve) important commitments from the company – contrary to their own interests and needs. The threatened sanction in the case of breach of these commitments is a kind of penalty (in the case of investors) or the recognition of a relative reason for terminating financing and claiming immediate return (in the case of banks).

Restrictions, Commitments and Obligations

The restrictions, commitments and obligations imposed are, generally, diverse. They may concern the company, its business activities, its management and its shareholders. Access to books and close monitoring of the company’s financial data is the minimum. It is quite indicative that one may (in the view of recent experiences) refer to the need for the investor’s or, as the case may be, the (bank) creditor’s assent in cases such as the following:

(a) Approval of the business plan.

(b) The composition of the Board of Directors (with the ultimate objective of the involvement of investors’ representatives in it).

(c) The major decisions making (e.g. merger, demerger, division, interim dividend and dividend distribution, return of capital, purchase, sale, lease, rental and leasing assets, entering into significant commitments, provision of securities, and so.).

(d) Third party financing either directly (e.g. loans) or indirectly (e.g. guarantees).

(e) Amendment of core provisions of the Articles of Association.

(f) Change in equity [transfers of shares either between shareholders or to third parties, including the provision of shares to executives as incentives, for example stock option (!)].

(g) Insurance of the assets of the company and ban on the transfer of the insurance indemnity, and so on.

The Multi-functional nature of Commitments

The undertaking of obligations and commitments such as those mentioned above, operate on three levels:

(a) The investor (or the Bank, as the case may be) feels the (really necessary for them) security in order to proceed with the useful, and sometimes critical, investment or financing of the company.

(b) The company, its management and its shareholders should be ready to accept control, limitations and / or (worst case) veto rights in their significant business decisions.

(c) The company on the one hand and the investor (or, as the case may be, the Bank), on the other hand, are linked with extremely strong ties throughout their co-operation, which cannot be broken without dramatic or even extreme adverse effects.

The Enforcement of Commitments

The commitments undertaken by the company are likely to prove problematic in a dual way – especially when the terms are imposed by a bank that finances:

(a) The ability to take business decisions is transferred by the company, even partially, to (middle or senior) bankers, who are neither entrepreneurs nor have significant knowledge of the subject. Most important: they never hold a real risk for their choices, they never compromise their own personal property.

(b) The freedom of the company, its management and its shareholders are limited regarding the implementation of its plans. The company binds to the creditor bank. No significant business decision can be taken without the consent of the latter. The bank even has the (normally uncontrolled) option to block or endorse any business move and any other funding. It also has the option to finance the company’s business itself – thus gaining a dominant position among its funding sources.

The Balance of Interests

In the context of a free economy like our country’s economy, nobody is obligated to conclude a contract and / or to accept specific unfavorable contractual provisions.

In the case of searching for funds, the strong party is not, normally, the company: It will be often “drawn” into concluding contracts and to undertaking extremely problematic commitments.

It often seems, logically, utopian to talk about “balance of interests”.

There is only one thing for sure: The company shall not be “heard” when it attempts , in the near or distant future, either to discuss on the “small print” or to reproduce the assurance of its creditor (bank, fund or venture capital): “Come on, do not pay attention: these are typical – we are here for you” …

Stavros Koumentakis
Senior Partner

P.S. This article has been published in MAKEDONIA Newspaper and makthes.gr (October 14, 2018)

October 17, 2018
Company’s Capital Enhancement: Partnership With An Investor

[vc_row][vc_column][vc_column_text] An option to finance a company’s investment plans (either it is a startup or not) is its capital enhancement. When the entrepreneur has funds and chooses to invest and keep his course alone things are, generally, simple. Thus, sometimes he is forced or chooses to partner with an investor looking to his enhancement and support. The investor can be either an individual or a business venture (eg venture capital).

How An Investor “Enters” Into A Company

An investor’s entry into a corporate scheme (let’s limit it to a Société anonyme) can be made in different ways. The purchase of existing shares or the participation in the share capital increase are the most common ones. There is, in addition, the case of a bond loan convertible into shares when the lender exercises its relative right to convert its financial claim into shares.

Investor’s Participation In Capital Enhancement

In each case of an investor’s entry into the share capital of a company, some of the first issues to be clarified are:

(a) if the shareholding shall be a minority shareholding or a majority shareholding,

(b) what will the amount to be paid by him be, and

(c) what will be the percentage of the share capital to which his participation shall correspond.

Please note that some percentages of the share capital are assessed as critical for the operation of a Société anonyme, with the clarification that when we refer to majority shareholding as a mean of participation, we may face the issue of the company’s acquisition. Additionally, the investor will always aim to an increased number of shares, while the entrepreneur to the less possible. From the legal perspective, there are always the appropriate tools to implement the object of the (participation) agreement.

Common Objective And Investor’s Assurance

The main reason for any investment (either of a high or of a low risk) is earning business profits.

The profit (: common objective) is interwoven, among other things, with the successful implementation of the business plan, which has been agreed between the entrepreneur and the investor. It also corresponds to the percentage of the share capital each one of them holds as well as to the policy for the distribution of profits.

The investor always claims, in order to safeguard his interests:

(a) close and multilevel monitoring of the operation of the company (including the legal and financial aspects of the company’s operation),

(b) participation in the administration and formulation of the (company’s) strategy,

(c) a veto right in critical decisions,

(d) shareholders’ commitments (e.g. limitation or prohibition of the transfer of shares) and so on.

Exit strategy

The investor often seeks a binding agreement with regard to earning his profit and to withdrawing from the investment. This agreement (also known as the “exit strategy”) includes, among other things, the time, the conditions and the amount the investor expects to receive at the time of withdrawal.

Contractual Framework

For the success of such a venture, it is necessary to have secure contractual commitments, an extraterrestrial shareholder agreement and / or statutory amendments. A crucial parameter for the success of the whole venture is always the detailed and accurate recording of everything that has been agreed, the rights and obligations of each party. In any case, it is desirable that the parties involved do not appeal to third parties for the interpretation and implementation of the agreements, at any time in the future.

Stavros Koumentakis
Senior Partner

P.S. This article has been published in Greek in MAKEDONIA Newspaper and portal makthes.gr (October 9, 2018)

October 9, 2018
Startups: Financing, Risk and Sustainability

[vc_row][vc_column][vc_column_text] Startups: business ventures (emerging and usually promising) in the early stages of their operation. In Startups the subject of activity is almost always highly original, pioneering but also high risk-high reward.

Startups Financing

A business idea, as innovative, dynamic and promising as it may be, needs capital to be translated into a business venture and profit. Such capital, sometimes less and other times more important, may come from the savings of the “startupper” or from its close environment.

Thus, the case of financing coming from the startupper’s close environment is not the most common one. Alternatively, financing comes from:

(a) Business Angels. “Angel investors” are the ones who, first and above all will believe in the innovative idea and will agree to fund it. Angel investors will undertake high risk, acting individually or organized into an angel fund.

(b) Venture Capitals. It is an organized fund of investors, with high-level professionals. In addition to capital, experience and knowledge in strategic, development, sales, administration, operation, marketing, and other issues, are also provided.

(c) The Crowdfunding platforms. The “crowd” funding will come from the use of an on-line platform. The participants fund the idea with small amounts each. In Greece there is a relevant legislative provision thus with limited implementation to date.

(d) Banks. This is not a common ase in our country, as banks typically look to finance existing businesses long established and with good-standing financial data.

(e) The European Union. These funds are channeled directly or through programs managed at national level.

(f) Business Incubators. Business Incubators usually provide support at a practical level (premises, furniture, equipment, administrative support, contacts) or/ and short – term support and financing.

Risk

It is not reasonable for a young, optimistic and promising entrepreneur to expect the financing and support of an investor (or of a simple lender) without being ready to take the risk. And the specific risk concerns the provision of adequate collateral (personal or real – when available). It also refers, most commonly, to the commitment of an important part of the business and of his business freedom. This can be translated into a transfer to the investor of a part of the company’s share capital, into accepting drastic restrictions on making business decisions etc.

Startups’ Sustainability

The interests of the contributor / investor and the entrepreneur are partly identical and partly conflicting. The sustainability of the start-up is a common goal. The rapid and lucrative exploitation of the business idea as well. What will happen, however, if there are conflicts over the range of powers of each party? How to deal with the investor’s claim for collateral or with the pressure to restrict the business freedom of the startuper who is also the owner of the idea?

In a country where 50% of startups fail within three years, the assistance of appropriate consultants is proving critical. Especially from a legal perspective.

Stavros Koumentakis
Senior Partner

P.S. This article has been published in Greek in MAKEDONIA Newspaper and portal makthes.gr (September 30, 2018)

October 2, 2018
Personal Data Protection And Companies

[vc_row][vc_column][vc_column_text] European requirement the enforcement for Personal Data Protection. New compliance rules (Regulation 2016/679)

Preamble: What Does Non-Compliance Mean

It is true that any new obligation created for a company burdens its operating costs. But could anyone suggest non-compliance with the obligations under this Regulation for Personal Data Protection?

To this case we could not remain indifferent. European Regulation (2016/679) is in force without the need for ratification by the Greek legislator.

Sanctions threatened? Unsustainable! Without going into the details of criminal sanctions, the maximum penalties (fines) amount to € 10.000.000 or € 20.000.000 and at a percentage of 2% or 4% respectively of the infringer’s worldwide turnover (if the above amounts are below the respective percentages on its worldwide turnover!)

Things are NOT simple …

The Existing Institutional Framework

The need to protect individuals from the constantly evolving (due to the rapid developments in technology) exposure of their Personal Data and the creation of a secure modus operandi of the data processors is underlined by the European Regulation 679 of 27 April 2016, which shall be in full effect for all Member States (among which our country, of course) on 25.5.2018.

In accordance with Law 2472/1997 on the Protection of Individuals with regard to the Processing of Personal Data (and its revisions), the Greek legislator has incorporated the European Directive 95/46 / EC “On the protection of individuals with regard to the processing of personal data and the free movement of such data”.

The key foundations for the Protection of Personal Data that had already been set twenty years ago referred to the identification of:

(a) the basic concepts such as “record”, “data subject”, “simple data”, “sensitive data”, “controller”, “processor”

(b) the rights of the Subjects of Processing (each of us)

(c) the obligations of Personal Data Controllers (natural and legal persons, bodies and organizations with whom we are required to have transactions in our daily lives from our employer to the Register of a Taxation); and

(d) the establishment of the Personal Data Protection Authority, which would then function independently, as a supervising body and as an institutional guarantor for verifying compliance with the European requirements.

The Personal Data Protection Authority has been set up and operating since then, it undertakes vigorous action while its decisions have become a serious item in the agenda of not only the legal world bit also of the public opinion, as for example in the case of identifying religion in identities.

The European Parliament chooses in this Regulation a more dynamic position than the previous Directive, since the former is a law of increased formal validity (it raises upward the laws of each member – state) and is (unlike the Directive) directly applicable horizontally (its incorporation by the national legislator is not required).

The Tightening For The Protection Of Personal Data In The Context Of The European Regulation

The Regulation strengthens the protection framework and in particular:

(a) the Controller is required to choose the most secure, organizational and technical measures both at the time when the data collection and processing measures are defined and at the time of processing.

The obligations of the Controller and the Processor expanded (: record-keeping – specifications – processing activities) and acquire specific responsibility to receive and be able to demonstrate that it has taken all necessary measures to ensure that processing is carried out in accordance with the Regulation.

(b) The rights of the Subjects are enhanced, including: (i) the right of access, (ii) the right of correction (or completion) (iii) the right to be forgotten (conditionally, the right to erase data), (iv) the right to object (v) the portability of data.

(c) It is specifically provided for cases of systematic, extensive and large-scale assessment of personal data or systematic monitoring on a large scale of public places, an obligation to carry out an impact assessment of potential risks and consequences for the rights and freedoms of individuals arising from the type, the framework, the scope and the purpose of processing.

(d) the Controller is required to immediately inform the authority of any breach of the system security (within 72 hours as from the moment he becomes aware of such)

(e) the Controller (in cases explicitly mentioned in the Regulation, indicatively large-scale processing of data and / or sensitive data) appoints a Data Protection Officer, an internal supervisor (employee or external partner) (such as a security technician) who will ensure compliance with the regulatory framework (in conjunction with any specific regulation, if any, envisaged by the national legislator in the scope of his discretion) and has direct contact, cooperation with and reporting obligation for any violation to the Personal Data Protection Authority.

(f) There are provided considerably stricter sanctions than the existing administrative and criminal penalties, with fines of between € 10.000.000 or € 20.000.000, and a percentage of the company’s turnover, as the case and the offender may be (if that percentage exceeds the above amounts).

A significant difference with the current legal framework is that no disclosure to the Authority is foreseen, rather than the availability of the material (: processing file) at the direct request of the Authority. However, each national legislator may specify his requirements and request for Disclosures or Licenses, especially in cases related to processing of sensitive personal data. In order to examine the possible adoption of legislative measures for the implementation of the Regulation, a Legislative Committee has been already set up (Government Gazette 1913 / 27.6.2016) whose work we expect to be completed before the implementation of the Regulation.

It is imperative that each Controller reviews (with the appropriate collaborators) the security status of his technical systems and of its organizational structure so that he is ready to comply with the requirements of the Regulation.

However, Is There, Any Time?

As already mentioned, the date the new European Regulation comes into effect is 25.5.2018 – i.e. at first reading, we have enough time to act. Still, is that the case?

Many factors are to be evaluated in order to provide the answer: “Okay, we have a lot of time”.

The kind of business activity, compliance with the current institutional framework, the concentration (and / or handling) of sensitive, apart from simple, personal data, and so on.

Let us not rush to answer that “we do not have sensitive personal data”. Do we ask for criminal records for some of our employees? Do we have a record of the health status of some of them? Do we have security cameras for the security of our company?

Conclusion

While we expect what (also) the national legislator will impose, the institutional framework for the protection of personal data has already become more complex. Threatened sanctions not only are significant but also, in fact, dramatically high.

Preparing the company, most of the time, is neither easy nor quick.

The need for more detailed information, a first assessment and for the first procedural steps, is present.

Today!

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October 1, 2017
The Proper Legal Advisor

[vc_row][vc_column][vc_column_text] Legal Advisor, Attorney, Counsel. How many times have we all been wondering about who is the appropriate? Is it a question of remuneration (: cheap / expensive), promoted by the media (: unknown / famous), studies and experience, age or gender? And me, I’m neither from the Boston Legals nor member of the team of Suits. No such luck nor experiences! I managed to write a simple decalogue, which does not even refer to the level of fees … Who is the appropriate legal advisor and lawyer? Is it yours?

1. Trust, Integrity, Prestige

A constituent element of the client – lawyer relationship is trust. If we do not trust the (potential) lawyer, legal advisor, or if he does not trust you, I shall be dogmatic: We DOT not start a cooperation. But in the case that we have started the cooperation and we already see that mutual trust has been lost, we stop it DIRECTLY! We seek for another lawyer. A lawyer we can trust.

But in order to trust our lawyer, he must have inspired us and still, unfailingly and continuously, inspire us with his integrity, credibility, seriousness and prestige. If, hopefully, he did not succeed with us, how will he succeed in court, clients and colleagues while defending our interests?

2. Strategy And Details

It is usually easy for any lawyer to deal with our affairs. But is that all we need? We must not forget that our legal advisor must develop a strategy for handling each case (small or large). And it is certain he will do well if he can be two steps ahead of others – not just one. But this strategy should be dynamic. At all times, and depending on the developments, its correctness should be assessed and, when necessary, revised. Caution! We are not only interested in the “forest”, we are also interested in the “trees”. No single case was won by strategy alone. It is necessary to look into the details that our counterparts and contractors have not identified. Our Attorney is the right person to deal with them-better not you!

3. Knowledge And Experience

No one would like to (and should not) choose an “illiterate” lawyer or someone (who thinks he) “knows everything”. An appropriate legal advisor is not only he who has the appropriate scientific knowledge and expertise, but also, he who has the courage to accept the limits of his abilities. And for the rest to refer (or he himself to address) to the experts. And if, hopefully, our lawyer, focusing on our pocket or to impress us, makes us believe that “he knows everything and that he can do anything” you should introduce him to me. Because I still believe that there is NO such a lawyer.

4. Consistency, Judgement And Perception

What is more attractive than the spiritual consistency and the satisfactory, at least, judgment and perception? Does anyone imagine a lawyer who not only is he not able to perceive those that happen but is also unable to decode them and use them in his client’s benefit? Does anyone imagine a lawyer without analytical and, at the same time, synthetic thinking? And more over: Does anyone imagine a lawyer whose speech (spoken or written) is not understood or attractive? We must not forget that every lawyer has listeners, judges or co-contractors before him. And if he cannot bring the interest of the listener or reader to what he himself supports or, worse, be understood in the formulation of his thoughts, he probably should not be our legal advisor.

5. Negotiating capacity, Persuasion And Passion

And if I take for granted the judgment and perception of the lawyer we have chosen, I should also take for granted his negotiating capacity in the defense of our affairs and interests. It is precisely in this capacity that our legal advisor must be able to convince the people he is dealing with on our behalf.

But it is a prerequisite that he himself has been convinced. And more over: to defend us and our interests with passion. For if he is not convinced himself, and is confined to the simple, lukewarm, quote or reading of our argument, we must also assume that even the people he has before him will not be convinced.

6. Qualitative And Quantitative Performance. Speed Of Response And Availability

We cannot expect from our lawyer anything less than the best. The best in quality, the most in quantity and at the right (fastest) time. And that because, think of a lawyer who does his job extremely good thus without respect (or commitment) to procedural deadlines or to the client’s business needs. A lawyer that has been just today able to start working on the job he was assigned with a month ago. And to complete it, “God will provide” …

And just to meet our needs, experience has shown that it is not possible for a lawyer to invoke or use a timetable, to divide the days into working and unparalleled, or to systematic lack, for whatever reason, availability and inability to communicate. Availability is required when and wherever needed!

7. Efficiency

We have all met competent people who, however, are unable to focus on the outcome and often to succeed getting one. And it is true that each interested person, by nature, always wants to win (whether he says it or not). However, it is important that our attorney focuses on the best result and does not leave “incomplete” his or her relative effort either by indolence or by indifference or for any other reason. It is important that our lawyer does not leave the case file aside before completing whatever is necessary and possible.

8. Calmness And Sobriety

When someone reaches the point of seeking the advice or assistance of his lawyer, it means that a matter of importance is of concern to him. Sometimes these issues prove to be complex and highly complicated. And some others, are reaching the point of crushing, with their consequences, those concerned. And here is the need for an appropriate legal advisor: not to share (client’s) panic attack (but eventually), to decode the data and put them in their true dimension, to propose the appropriate strategy, but also to implement it, to select and oversee the individual solutions.

Crisis management (whether it refers to smaller or larger or / and really big crises) is, beyond any doubt, an almost daily necessity to which our legal advisor must successfully respond.

9. Self-Confidence And Ability to Collaborate.

We all know what a lack of self-confidence means. And if we refer to children, we can reasonably look forward to strengthening it over time. But if we meet the lack of confidence in our doctor or lawyer, can we have hope? It may be the case if, in order to strengthen it, he will appeal to willing and better than its own colleagues. But if such are not available or are already tired of him? If he tries to “cling” to our own thought and opinion to choose or strengthen his own? He’s probably not the appropriate lawyer.

It also does not seem for our legal counsel to be the right person if he lacks team spirit and of the ability to co-operate with the useful and necessary persons, to recognize their assistance and contribution and the fact that he relies (to any extent) on those. If our lawyer needs a confirmation of his skills by concealing the necessity of collaborations and of his associates, we should probably start to doubt both his abilities and him.

And something more: Our legal advisor should have leadership skills, he must be able to set up a team and manage it for the best result but also to “take upon himself” our case. But, in particular: to be in a position to remove the burden that our case, personally, and fair, creates.

10. Does He “Lay Down A Part Of His Life” For Your Cases?

And if we identified the appropriate lawyer who has “everything in the world” -and more and even more, there is one last question: Do we feel that our lawyer deals with our affairs, simply as a good professional or that, in addition, he lays down a part of his life for them? If the second ALSO happens I think we should not leave him.

He is the one who will do what is humanly possible for us and for our interests, the one who will “turn night into day” and who will “upset everything” for us. It is he who is honestly happy with our joy and who does not “give up” in our dead ends. He is the one who will continue to fight until victory or up to the end. He is the one who deserves to be OUR LAWYER!!!

So, is your lawyer the proper lawyer, legal advisor and counsel? I guess you have, already, concluded…

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July 3, 2017

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