- about us
Secured lending CEE
With more and more players active in the corporate lending and secured finance markets across the CEE region, and multi-jurisdictional CEE transactions happening on a regular basis, counsels are challenged to navigate their clients through fragmented legal frameworks in various jurisdictions often with different sets of secured lending rules and must-knows.
cee overview - business to consumer protection
Consumer protection as a strategic goal of the EU
cee overview - compliance & criminal defence / corporate investigations & crisis management
The fight against corruption and white collar crime in CEE is intensifying
At the beginning of 2019, Transparency International painted a bleak picture of anticorruption efforts in Central and Eastern Europe.
Crisis Management – Schoenherr's innovative tools for companies
Crisis management is an essential part of each company's compliance system. In particular where possible criminal behaviour is suspected within the company, the management must react quickly, but also wisely.
cee overview - insolvency & restructuring
Increased Need for Restructurings on the Horizon?
Economic growth was relatively stable this past year in the CEE region. Despite global economic uncertainties caused by Brexit and trade disputes, businesses still benefited from high consumption and the availability of low-interest loans.
Auction-based Subsidies in the Renewable Energy Sector: Time to Forget the Safe Space of Guaranteed Tariffs
Subsidies for power generation from renewable energy sources (RES) are undergoing material structural changes in the CEE region.
cee overview - insurance
Insurance in Austria and CEE: An overview of key insurance law issues
In response to the growing need for legal advice in insurance and regulatory matters, Schoenherr focused on insurance law advice since 2006 and set up its own insurance practice group only a few years later to combine know-how and focus on industry-related advice in matters of interest for the whole European Economic Area.
Making things easier for issuers on capital markets: Turning points in prospectus rules
To facilitate company access to financial markets, the European Commission completed its action plan for a gradual building of the capital markets union in 2019. Most actions focused on breaking down barriers blocking cross-border investments. As part of these measures, starting mid-2019, new rules governing prospectus drafting became effective. Among others, the new paradigm lays the groundwork for easier access for issuers and improved investor protection.
Sustainable Finance – a trend to stay
With sustainable investment picking up globally, environmental, social and governance (ESG) considerations are gaining increasing importance in decision making and practices. Driven by the EU's need to close the approx. EUR 180bln per annum funding gap to achieve its climate and energy goals by 2030, sustainable finance has consistently risen in the policy agenda since 2018+.
Exchanging views on current trends in Legal Tech and financing transactions
Legal Tech is currently on everyone's mind and has also become a central topic in the context of financing transactions. While marketable applications for buzzwords such as "automated document generation" or "artificial intelligence" are often still in their infancy in the field of legal transactional advice, such applications can already make a significant contribution to the success of a transaction in the field of efficient process management, e.g. in connection with the satisfaction of conditions precedents under loan agreements.
(Anti)Corruption, the Romanian Way
Romania has made international headlines in recent years with arguments and street protests generated by the controversial justice reforms that the government has tried to push through. Seen as a threat to the rule of law, the reforms and personnel changes in the criminal justice system were eventually dropped following a referendum held last year.
Royalty Financing: A New Source of Capital in Mining, Tech and Beyond
Royalty financing is a type of alternative finance where the financier, often called the royalty holder, advances a one-off up-front fixed cash amount to a company, a royalty payor, which in return promises to pay a percentage of its future revenues or profits to the royalty holder. This type of financing is used to develop an asset or a business when traditional debt or equity financing options are limited. It is a true alternative to traditional debt finance, since there is no fixed repayment plan and payments depend on the performance of the underlying business or asset. Also, unlike equity financing, the ownership and control in the royalty payor is not diluted, since it is not giving away its equity stake.
Not every corporate story ends with "happily ever after"
"Once upon a time" is a promising beginning for any story. Even for corporate ones. But statistics show that unhappy endings are all too common. In Romania, for every four new legal entities incorporated each year, one existing company is wound up.
Legal Finance in Practice
Legal finance – also called litigation funding – has firmly touched down in Central and Eastern Europe. Last year, we ran a chapter on what legal finance is. This year, we explain how legal finance works in practice. How we secure the best result for our clients. By working together.
Stay or go, your investments ARE Protected
You are an intra-EU investor. You run your business in one EU state and invest in another. Or perhaps you are an international company, outside the EU, but with a corporate structure that includes intra-EU investment. You never questioned that your foreign investment will be protected under the applicable intra-EU bilateral investment treaty (BIT). And you had no reason to.
New Arbitrability of Shareholder Resolutions in the Amended Polish Civil Procedures Code
Arbitration is on the rise in Poland. A major amendment to the Polish Civil Procedures Code became effective on 8 September 2019, increasing the list of arbitrable cases to include those on the invalidity or annulment of resolutions of general meetings of limited liability or joint-stock companies.
Unfair trade practices in the food retail sector in Hungary: Will the new UTP Directive bring substantial changes?
The legislation on unfair trade practices is a classic interplay between competition law and trade law. The close and complementary relationship between trade and competition policies can be derived from the similarity of their objectives: fostering fair and effective competition while at the same time protecting vulnerable market players from abusive conduct by those with stronger negotiating power.
Romania: Trends in competition and data protection investigations l Consumer welfare. Industry focus
Public enforcement is likely to become increasingly focused on consumer welfare. While this trend is obvious at the EU level, consumer welfare is still a rather blurry concept for national authorities, but clearly a focus for them as well.
cee overview - healthcare & life sciences
Austria: New unified cancellation right for Austrian insurance contracts brings legal certainty
Under Article 186 of the EU Solvency II Directive (2009/138/EC), EU Member States must grant life insurance policyholders a 14- to 30-day period to cancel their contract from the time when the policyholders were informed that the contract was concluded.
How fast can you get a trademark in Central & Eastern Europe?
When deciding to register a trademark, it is important to remember that the registration does not occur instantaneously. Since a registered trademark grants the holder an exclusive right to use it for the listed goods and/or services, providing the respective trademark office a certain amount of time to check the trademark is understandable.
The winner takes it all? - Enforcement of EUIPO cost decisions
Imagine you won. You were defending your trademark or design before the European Union Intellectual Property Office (EUIPO) and won an opposition or cancellation proceeding against another intellectual property right holder. Not only has the office decided on the merits in your favour, it also awarded you costs. How can you get that cost reimbursement if the losing party does not voluntarily pay?
The Digital Copyright Directive: Landmark or missed opportunity?
This April, the relevant EU institutions finalised the controversial Directive on Copyright in the Digital Single Market (the "Directive")1, which came into force on 7 June 2019. The draft of this legislation has been sitting on the EU's desk for several years and – unlike most other EU law – has also caught the attention of the general public. If you want to know why the Directive is likely relevant for you too, continue reading.
Redundancy/restructuring in CEE
When planning restructuring or redundancy measures, employers need to consider whether the intended measures qualify as a mass redundancy. To assess this, the timeframe of the redundancies, the number of employees to be made redundant and the total headcount needs to be considered. Though some procedural aspects of mass redundancies are harmonized in European law, local implementations and their interpretations may differ significantly. In the table which follows, we aim to summarize the triggers for a mass redundancy and certain procedural aspects of such process throughout CEE in an easily comprehensible format.
Reduced limitations on trade in agricultural properties in Poland
The Polish legislator has reduced restrictions on the trade in agricultural properties implemented in April 2016. The amended regulations make it easier for companies owning small agricultural properties to operate and clarify some doubts concerning trade in agricultural properties, which may also impact commercial trade.
A power player hiding in the Hungarian construction industry: the construction trustee
To deal with the aftermath of the global financial crisis starting in 2008, Hungary introduced the unique institution of the "construction trustee", whose primary aim was to break the chain of debts among contractors and subcontractors in the construction sector.
Croatia's New Land Register Act
After years of criticism of the land register system, the Croatian parliament adopted a new Land Register Act aimed at creating a modern and completely electronic land registry system that provides legal certainty in the real estate business and protection of property and other real estate rights.
Pre-contractual liability for failure to conclude a contract
Sections 1728 and 1729 of the Civil Code expressly stipulate the obligation to compensate damage caused by negotiating a contract without the intention to conclude it and by terminating contractual negotiations without just cause. This article examines how the courts currently interpret these provisions.
Electromobility on the rise
As part of the EU's efforts to achieve carbon neutrality, Regulation (EU) 2019/631 of the European Parliament and of the Council of 17 April 2019 (effective from January 2020) laying down CO2 emission performance standards for new automobiles and new light commercial vehicles (the "Regulation") was issued. Under the Regulation, individual manufacturers (or associations of manufacturers under Article 6 of the Regulation) will be obliged, inter alia, to reduce emissions from new automobiles by 37.5 % by 2030 (compared to the 2021 target of 95 g CO2/km).
Together on the blockchain: Finding consensus in a decentralised network
An essential element of the blockchain and the technology behind it is the validation of transactions, i.e. confirmation that data in the blockchain ledger is entered rightfully1. But how, exactly, can data entered in a decentralised ledger be validated? Who does the validating? These questions arise once you look deeper into the workings and structure of transactions on the blockchain.
How to manage complex IT projects
Gone are the days when purchasing new software was mainly the job of procurement departments and driven by economic considerations. Nowadays, IT projects are incredibly complex and require the seamless interaction of many different stakeholders.
What is AI and why should lawyers care?
Artificial intelligence (AI) and machine learning are familiar buzzwords when it comes to future technology and fundamental societal shifts. But what is it really all about and why is it so difficult to apply common legal concepts to these developments?
A new reality for ridesharing apps in Poland
The battle between traditional taxi drivers as well as their supporters and those advocating a more digitalised approach focused on ridesharing applications such as Uber, Lyft or Bolt began a few years ago and is being waged in almost every country. In Poland, Uber started back in 2014 as the first mobile taxi application on the Polish market. Taxi drivers began protesting the app almost immediately after it became clear that consumers preferred Uber's efficiency and prices to those of traditional taxis. Criticism from traditional taxi drivers about the safety of Uber and the qualifications of its drivers led to the need for legal changes. A first draft amendment of the Polish Act on Road Transport was submitted to the Council of Ministers in July 2017 (the "Amendment").
Romania: How to start-up an army of cyber guardians
This year, Romania's first tech unicorn reached a USD 7bln valuation. This has stirred things up, expanding the horizons for many Romanian entrepreneurs. While still far from being a major start-up ecosystem, the country is showing its potential, mostly due to high-quality tech talent available at still manageable costs.
Austria: New Digital Services Tax
In September 2019, the Austrian parliament passed the new Digital Services Tax Act, which will enter into force on 1 January 2020. The main goal is to achieve "fair taxation" by taxing online advertising services provided in Austria. But in fact it is aimed at multinational tech companies.
Austria's implementation of the DAC 6-directive: The EU Reporting Act
Following the approval on 25 May 2018 of the European DAC 6-directive, which obligates taxpayers and tax intermediaries to report certain aggressive cross-border arrangements to the tax authorities, the Austrian parliament approved the EU Reporting Act (EU-Meldepflichtgesetz) on 20 September 2019, which implements the aforementioned directive into Austrian domestic law. This publication will highlight the most important takeaways and developments of this new act in comparison to the directive, which was already discussed in Roadmap 2018.
Throwback: Implementation of CFC rules in Austria
One of the Anti-Tax Avoidance Directive (ATAD) measures involves the reallocation of income of Controlled Foreign Companies (CFC) in low-tax jurisdictions to the parent company. The new Austrian CFC rules came into force on 1 January 2019. On 25 January 2019, the Austrian government published a Regulation on the application of these CFC rules. This article provides a practical overview of the Austrian CFC rules.
Monitor your trademarks – the Czech IP Office has stopped doing it for you!
Trademark owners need to be aware of the recent amendment to the Czech Trademarks Act, which implements EU Trademark Directive 2015/2436. The new amendment enables registration of trademarks that are identical to an earlier trademark. This will prove upsetting for careless trademark owners.
individually – together
Amending debt terms in CEE/SEE – one region, different regimes
Bulgaria: Welcome to Miami?
"My parents didn't want to move to Florida, but they turned sixty and that's the law," Jerry Seinfeld once said. Now imagine replacing Florida with Bulgaria! Sounds weird? Maybe, for now,...
... but there are a few reasons why this could start to sound logical: the aging of the European population, the good natural, climatic conditions, and the trends on the Bulgarian real estate market.
Telemedicine – A trend in the fast lane
The health care sector continues to see competition from traditional and non-traditional industry participants. At the same time, patients want continuously available, affordable and better health care and increasingly view medical treatment like any other (professional) service. Patients therefore are demanding cost-efficiency, high quality, ease of access and 24/7 availability.
A glimpse into the future...
Connectivity, algorithms, artificial intelligence… more and more digitalisation becomes part of our daily lives. What does this mean from a legal perspective - blessing or curse? Data protection expert Günther Leissler asks Univ Prof Dr. Nikolaus Forgó, Head of the Department of Innovation and Digitalisation in Law, University of Vienna, for his skilled view on the subject.
The fall of Agrokor - a partial history
Like any good crime novel, the fall of Agrokor had it all: the fallen hero turned villain, a looming public crisis, political intrigue and a packed storyline with many twists and turns. We have compiled a timeline with some of the most crucial events from this financial thriller.
The Interest Limitation Rule under the Anti-Tax Avoidance Directive
ATAD and BEPS:
In 2016, the European Union adopted the Anti-Tax Avoidance Directive ("ATAD") to combat "aggressive tax planning" as part of the Anti-Tax Avoidance Package. Article 4 of the ATAD includes an Interest Limitation Rule ("ILR") based on the recommendations set forth in Action 4 of the OECD's Base Erosion and Profit Shifting ("BEPS") project.
Cryptocurrency in Romania. A go or a no-go?
In Romania, authorities are yet to create the legal framework that would regulate the taxation of activities related to cryptocurrency. This legislative gap leaves plenty of room for tax avoidance, as even the most well-intentioned taxpayers lack the tools to understand what taxes they need to pay in relation to their cryptocurrency trading.
Tax intermediaries to disclose potentially aggressive tax arrangements to tax authorities
On 25 May 2018, the Council adopted a directive forcing tax intermediaries or taxpayers to report aggressive cross-border tax planning schemes to the tax authorities, which may exchange such information with other tax authorities within the EU. The Directive is to be implemented by 31 December 2019 and is applicable from 1 January 2020.
Comparison of the main features of non-compete agreements in CEE
Concluding non-compete agreements or including non-compete clauses in employment agreements is common practice in all jurisdictions in CEE. However, as these covenants are not subject to EU-wide regulations, the rules governing and the jurisprudence surrounding them differ in the various jurisdictions.
Cancellation of non-compete agreements – evolving court practice
Post-termination non-compete clauses are a common feature of employment contracts in Hungary. As the obligations prescribed by such clauses become effective only upon termination of employment, the parties' interests linked to the enforceability of the clauses may be completely different.
Start-up acquisitions & exits - where expectations meet reality
A typical start-up is usually founded by three or four individuals as a limited liability company or a joint stock company focused on IT or online businesses. As the start-up grows, a number of investors (ten or more) come on board (venture capital funds and angel investors) by acquiring convertible loan instruments, newly issued or existing shares. The start-up company is focused on building up and investing in its team of specialists, which is often its main asset. This explains why employee share option plans are so common. Gradually, the client network expands and the brand is established. And then, a strategic company comes along with a lucrative offer to acquire the start-up.
Legal hiccups in start-up financing
From pre-seed to exit, start-ups are chronically in need of money to ensure their steady growth. Due to lack of access to bank financing, start-ups are typically financed by their shareholders via equity finance or debt. But there are also hybrid instruments that can be used to bridge the gaps between financing rounds or to overcome valuation issues.
What industries do investors in start-ups currently prefer?
From pre-seed to exit, start-ups are chronically in need of money to ensure their steady growth. Due to lack of access to bank financing start-ups are typically financed by their shareholders via equity finance or debt. But there are also hybrid instruments that can be used to bridge the gaps between financing g rounds or to overcome valuation issues. We interviewed Ivaylo Gospodinov, one of the managing partners of the investment fund BlackPeak Capital.
Third-party funding in international arbitration
In recent years, third-party funding has seen a tremendous rise in popularity in investment arbitration and in international commercial arbitration alike. The numbers are constantly increasing: more third-party funders are active in the market, law firms are beginning to cooperate with third-party funders, and an increasing number of cases involve issues relating to third-party funding.
Statutory restrictions on investing in strategic sectors in Poland
The Act on Control of Certain Investments (the "Act") entered into force in October 2015, introducing restrictions on m&a transactions in Poland. The Act created an exception to EU freedom of capital movement, as it empowered the prime minister or minister of energy to object to transactions in which Polish companies operating in sectors deemed strategic for the national economy are involved.
How litigation financing works
As third-party funding continues to make headway, close cooperation between law firms and funders becomes ever more important. Schoenherr's Leon Kopecky and Victoria Pernt sat down with Philipp Leibfried of Burford Capital. With over USD 3 billion committed in the legal market, Burford is the best-capitalised provider of legal financing in the world.
Process funding in litigation – business with justice
Process funding has reached Europe and is on its way to becoming an integral part of national legal practice. Even more restrictive jurisdictions are seeing the advantages that process funding can offer, marking the start of a flourishing European legal market.
Disclosure obligations and conflict of interest
Third-party funding has become a common feature of international arbitration. Yet, despite the upsurge, it still raises many controversial legal questions. The most prominent is whether and to what extent the existence of third-party funding and the identity of the third-party funder must be disclosed to the other party, the arbitrators and the arbitral institution.
Multilingual jurisprudence for a territory bigger than half a billion football fields
An impressive building on the Kirchberg plateau in Luxembourg characterised by the colours gold and black is home to the Court of Justice of the European Union (CJEU), the sole judicial body of the EU, which ensures compliance with the treaties and secondary EU legislation (Art 19(1) TEU). It consists of two separate courts: the Court of Justice (ECJ) and the General Court (GC).
FDIs in Hungary - "sensitive industries" under scrutiny
In October 2018, the Hungarian Parliament accepted legislation with a rather ominous title. The "Act on Controlling Investments Detrimental to the Security Interests of Hungary" (the "Act") is illustrative of the government's protectionist approach. It seeks to establish further control over EU/EEA-external investments in Hungary. The Act enters into force on 1 January 2019 and introduces significant burdens for investors in industries considered "sensitive".
Mandatory registration of beneficial owners introduced for all Czech entities
As of 1 January 2018, all legal entities registered in the Czech commercial register must submit and register information about their beneficial owner(s) in the beneficial ownership register.
Compulsory disclosure of beneficial owners when doing business with a state in Slovakia
From early 2017, legal entities doing business with a state or holding specific licences have had to register information about their beneficial owner(s) in a publicly available registry.
Statutory secrecy obligations related to employee inventions in Austria and Romania
Secrecy plays a pivotal role in the area of patent law. The disclosure of an invention before a patent application has been filed can destroy novelty and therefore patentability, even if the disclosure is made without the inventor's consent. Accordingly, patent laws often provide specific rules on non-disclosure, in particular within the context of inventions made by employees.
This article provides an overview of these rules in Austrian and Romanian patent law.
Big Brother is watching you: Developments in employment law
The pervasive use of e-mail and the internet in the workplace has given rise to increased security issues, including data theft or misuse. But it has also given employers new ways to monitor employees, which leads to some interesting questions.
Disclosure in Austrian civil proceedings
Evidentiary proceedings are at the heart of all litigation and form the basis of any judgment. Sometimes the evidence is not in the possession of the party wishing to rely on it. In common law jurisdictions, parties may base their cases on their own documents as well as those in the possession of their opponent, and may force their opponents to produce all relevant documents in a pretrial discovery procedure.
Is trademark a celebrity's best friend?
Many celebrities are choosing to register their names as a trademark in order to prevent other people from exploiting it for profit (ie advertising products carrying their names). One could argue this basically means that they seek for privacy through trademark registration, which is rooted in the idea that everyone should have the right to be left alone and have control over the commercialisation of their persona, including celebrities, who have invested a lot of work in building their recognition in the world of fame.
There's no place like home until the neighbour interferes
Unfortunately, the Austrian Supreme Court ("OGH") doesn't think so. The Austrian Civil Code (ABGB) entitles property owners to prohibit all emissions that exceed the local norm and have a substantial effect on the customary use of their property.
Confidentiality in restructuring
Successful restructurings typically depend on a smooth and swift process. All information relevant for the restructuring must be available to the creditors, and must be kept confidential. In addition, legal duties of secrecy must be considered. Finally, the effective restructuring of a debtor's business needs to receive as little attention as possible from third parties (eg customers, the market, suppliers).
What I always wanted to ask a lawyer… "recording" (Austrian law perspective)
Bamboozled again! The good old handshake agreements of the old days apparently died. Next time I'll wear a wire and record everything to bust these people. But is this legal? Maybe I should ask my lawyer first…
A "private sphere" for entrepreneurs – are you ready for the new Trade Secrets Directive?
While companies generally do not have a right of privacy (at least under Austrian law), the protection of trade secrets has a somewhat similar objective: to grant leeway for development, which others must respect.
How to surprise the market: The secret trademark application
Plans to introduce a new product or service are often kept secret for a number of reasons. The later one's competitors become aware of an entirely new product or service, the longer one will enjoy the benefit of being the natural leader in that newly created market. In addition, famous companies in particular try to generate hype by creating an aura of mystery and focusing the public's attention on the big upcoming launch.
Commercial mediation – confidentiality matters
International commercial mediation has become increasingly important in international dispute resolution. Commercial contracts now regularly contain business-friendly mediation clauses and the number of cases is on the rise.
Romanian m&a on trial: Translation of international standards into local m&a transactions
Romanian private m&a has constantly sought to align itself to the international standards of transaction documentation, with some distinctions in terms of scope and interpretations of traditional m&a concepts still to be considered.
Criminal procedural law vs individual privacy / liberty
Privacy is a very delicate issue from the perspective of criminal (procedural) law. For their investigative activities, state authorities are granted various rights which interfere with the privacy of the individual.
Banking secrecy in CEE - one region, different rules
Do video cameras compromise privacy?
In an increasingly digitalised world, privacy is playing an ever more important role in property law. Thanks to security cameras, drones and other new technologies, each of us may be recorded or photographed without our knowledge. The jurisprudence has therefore had to address the question of whether installing video cameras or photographing neighbours or tenants in a residential complex infringes on their privacy.
Do our smart devices have the right to remain silent?
On 20 July 2017, a burglar sneaked into a family's flat in Hungary, grabbed whatever valuables he could find, and disappeared without a trace. At least that's what he thought. Unfortunately for the burglar, his crime was recorded by the family's baby monitor.
How to obtain formal design protection for your catwalk designs and still keep them secret
A so-called deferment of publication allows design owners seeking protection through registered Community designs to request that their registered design be published up to 30 months after the filing date.
Supervisory Board: Disclosure of conflicts of interest and confidential information
Prior to their election to the supervisory board of an Austrian stock corporation or, in case of a two-tier governance system, societas europaea candidates have to disclose to the shareholders their qualifications, profession and other functions as well as all circumstances that may create the appearance of a conflict of interest.